If you’re struggling to pay off your debts, any offer that promises “guaranteed” debt relief may sound very appealing. Who wouldn’t need some help with his monthly payments?
However, can a debt relief program really lower your interest rates and reduce the amount of money you owe? If so, what’s the catch? It’s smart to ask these questions before enrolling in such a program.
Debt is a problem that you’ve probably spent years creating, so don’t go looking for a quick fix! A legitimate debt relief company will never falsely promise to resolve your debt in less than a year – a monthly payment plan should be offered instead. A realistic debt relief program should be designed – just for you and your specific situation.
According to the non-profit National Association of Consumer Bankruptcy Attorneys, only one in ten debtors participating in these programs actually ends up debt-free in the promised period of time. Find a legitimate company that can deliver on its promises! And remember that a road to being debt-free is rarely smooth, or short.
Beware of companies that claim that they can negotiate one-time settlement with all of your creditors. That will dramatically reduce your principal, they say, and your monthly payments will drop like a stone. What these companies promise is a fairy-tale: a beautiful and highly appealing, but impossible dream. It would have been great if it was true, though.
Inform yourself in advance about the fees you are expected to be paying. You shouldn’t be paying any fees until you actually get debt relief.
To qualify for a program, your debt must exceed a certain amount, and you have to prove that you cannot make the minimum payment required. If you pay your monthly installments on time, your creditors may refuse to negotiate any debt settlement with you – why would they?
Enrolling into any debt relief program will therefore force you to default. That certainly comes with its own set of problems! Your credit rating will be damaged, probably severely.
Obviously, if your credit is already damaged, that is one problem you don’t need to worry about. So, should you try to settle your debts this way? The decision is easier to make for those debtors who are only a step away from filing for bankruptcy. No matter how things get desperate financially, take time to find a reputable debt relief company that doesn’t over-charge or over-promise.