While getting into debt is relatively easy to do, getting back out of it isn’t. It often involves a change in habits, lifestyle, or other sacrifices that many struggle to make. Ultimately, many Americans end up staying in the vicious cycle of debt year after year. Fortunately, there are options available to help you, even if you don’t have the discipline to budget well and slash your expenses. The three most popular and widely used resources for getting out of debt are debt negotiation, debt counseling, and debt negotiation. Freedom Debt Relief explains what each of these programs involves.
Debt negotiation is generally performed through a debt negotiation company, such as Freedom Debt Relief. If you enter this type of program, you will stop making payments to your creditors and instead save money in a dedicated account. The debt negotiation company will contact your creditors to settle the debt, typically for much less than what you owe. The process generally takes between two and four years to complete. The benefit of this is that you could reduce the amount owed and pay it off within a few years. The downside is that until each balance is settled, creditors could still call you or even pursue legal action until the debt is settled. Additionally, this program could have a negative impact on your credit. However, it does not impact it as negatively as a bankruptcy would. And if you are already struggling to make minimum payments, or have fallen behind on your bills, then this could be a good option for you.
A credit counseling company could help you set a schedule for paying down your debt. The credit counseling agency uses a debt management plan (DMP) to help reduce the monthly payment. They often do this through prearranged plans with the credit card companies. The way this program works is that you would deposit money each month with the agency and they would, in turn, use it to pay your creditors at a lower concession interest rate. Ultimately, you would pay off your debt in full to each of your creditors plus interest at the lower, concession rate. The benefit of this program is that collectors will stop calling you and you will have one, lower monthly payment each month. The downside to this program is the amount of money you’ll end up paying. This amount includes 100 percent of your debt that is owed, plus interest, plus a monthly fee of around $10 to $15 to the credit counseling agency. So, while the payment will be lower, it could still be significantly higher than what you would pay in a debt negotiation program such as Freedom Debt Relief.
With a debt consolidation program, all of the debt that you choose to consolidate would be grouped together into the amount of one loan and one monthly payment. Sometimes people do this with a balance-transfer program through their credit card. Others may take out a personal or home equity loan. And some people work with debt consolidation companies. The sister company of Freedom Debt Relief, Consolidation Plus, offers debt consolidation services. The benefit of this type of program is that it allows you to make one monthly payment at a lower interest rate in a specific amount of time. The downside to this program is that if you have poor credit, you may not be able to qualify.
Different people need different solutions for their debt issues. Freedom Financial offers a variety of debt reduction solutions that could help you eliminate your debt. In addition to the Freedom Debt Relief Program, we also have programs for unsecured loans and debt consolidation. Contact us to find out more about our programs.