Getting Out of Credit Card Debt - Will Debt Relief Help You Pay Off Debts Faster? Get Your Free Debt Analysis and Savings Estimate
If you are like many residents in Florida struggling with unmanageable credit card debts, or unsecured debts like medical bills, department store charges, or utilities, you might be interested in how you may be able to get rid of debt or pay off debt at an accelerated rate, and save a substantial amount of money through a debt relief program such as debt consolidation. Debt consolidation may allow you to combine, or consolidate, multiple credit card debts into a single, more manageable, and more structured monthly payment made to a credit counseling agency.
Debt consolidation is actually just one of several debt relief options available to consumers who need relief. Another option that may be appropriate is debt settlement, where consumers hope to settle or negotiate with their creditors for significantly less than what they owe. These days, many Americans have made debt consolidation and debt settlement popular alternatives to personal bankruptcy, which has a longer lasting impact on your finances and ability to secure future credit. To explore your debt relief options, answer a few, simple questions to get a free debt relief analysis and savings estimate.
What You Need to Know About Your Debt Relief Options
When you are experiencing financial distress and are uncertain about how you can meet your credit card debt payments, it's important to know that, other than bankruptcy, you have several debt relief options available - including debt consolidation or a debt management plan (DMP) . Facilitated by credit counseling agencies, debt consolidation may allow you to combine, or "consolidate," your unsecured debts into one, more predictable, and more manageable monthly payment plan. When you enroll in a debt consolidation program, credit counselors assess your outstanding financial obligations and develop a strategy that may result in reduced interest rates, and a waiver of late fees and other penalties. The goal of debt consolidation is to help you pay your debts not only at an accelerated pace, but at a pace that you can comfortably manage. With debt consolidation, or debt management, it is important to understand that you are still paying back what you owe -- just at a pace that you can afford.
Another viable option may be debt settlement, a process where the goal is not to pay back all that you owe, but to hopefully settle for significantly less than the full amount. When consumers fall months behind on their credit card payments, credit card companies often decide to sell off what's considered "bad debt" to a third-party collection agency for as little as 10 cents on the dollar. That's why many credit card companies, understanding your financial situation, may agree to a reasonable settlement offer that you have made.
However, like other debt relief options, debt settlement has potential drawbacks. When you enroll in a debt settlement program, for instance, you will be typically advised to stop paying your credit cards and start saving up funds over a certain period of time that you can later use to make a reasonable settlement offer. In many cases, when you stop paying credit card companies, you run the risk of being sued for, essentially, defaulting on the terms of your credit card agreements. In addition, when consumers settle with a credit card company, those that generally had good credit prior to settling will likely see their credit scores decline. However, in spite of the risks to their credit score, the impact of debt settlement is still not as severe or long lasting as bankruptcy.
How to Choose a Debt Relief Company
When you are ready to take the next step in finding debt relief, it may be a smart move to explore your many debt relief options and their potential benefits. Keep in mind that with debt consolidation, you are paying the entire amount of your debts - just at reduced interest rates and hopefully with a waiver of late fees and other penalties. On the other hand, debt settlement may allow you to settle by negotiating with creditors for substantially less than what you owe.
Regardless of the debt relief option, make sure that you do your due diligence when choosing potential companies. One way is to review a company's Better Business Bureau (BBB) rating, which is generally a good indicator of their customer service record and business practices. The bottom line is, if you are overwhelmed with unsecured debts, debt relief may give you the help you need to regain control of your finances. Regardless of the debt option you choose, it is important to understand that debt relief does not make debts magically go away. With a debt consolidation or debt management program, it is your responsibility to remain disciplined and allocate funds necessary each month to make your one consolidated payment. With a debt settlement program, it is your responsibility to set-aside funds each month that can later be used to extend a reasonable settlement offer. If you are interested in exploring how debt relief may be able to help you, you can request a free debt relief analysis and savings estimate - at no obligation to you.