Debt relief is a proven strategy for pulling consumers like you from that deep financial morass and setting you back on solid ground. But there are so many companies out there, how do you know where to turn? Well, U.S. News has identified the best debt relief programs. Let’s check out what it says.
What is Debt Relief?
First things, first. Also called debt settlement, debt relief is basically a way to get out from under stifling debt by shelling out a portion of what you owe. Yes, you read that right. Creditors regularly agree to it because they understand that if they don’t, you’ll likely file bankruptcy, which would likely leave them holding the bag.
How Does it Work?
You’ll hire a company like Freedom Debt Relief, the nation’s largest such company and No. 1 in multiple areas, including accreditation, as cited by U.S. News. After an initial consultation, in which your situation is assessed, the company will draw up a plan just for you.
Rather than pay your creditors directly, you’ll be asked to deposit funds each month into an escrow-like account that you control. That account will ultimately be used as leverage in negotiations with the companies you owe. Once you’ve saved enough cash – the amount is determined by your income and debt load – your company will pursue settlements with each creditor. Once each settlement is approved by you, the creditor will be paid from your account.
Won’t That Hurt My Credit?
The process of debt relief will cause a temporary credit downturn, due to the roundabout way creditors are paid. However, the emphasis is on “temporary,” since once your settlements are done and you begin rebuilding your credit, your credit scores will rebound, and then some.
Remember, too, that your scores haven’t been the greatest in some time. And by way of consolation, it’s that fact that motivates creditors to work with you due to the possibility of bankruptcy.
How Long Does Debt Relief Take?
Anywhere from two to four years – not long at all considering your long slide into debt and the time it would take to pay your bills off by yourself (read: years, and perhaps decades).
The Best Debt Relief Programs
About that Freedom Debt Relief accreditation, which U.S. News points out, and which makes Freedom one of the best credit card debt relief programs. Such accreditation is crucial these days since so many scam companies abound. You do want a credible, legit company to handle your debt relief needs. As it turns out, California-based Freedom is a founding member of the American Fair Credit Council and is also a Platinum member of the International Association of Professional Debt Arbitrators.
Can You Tell Me More About Freedom Debt Relief?
Since 2002, the company has helped more than 650,000 consumers and resolved more than $10 billion in delinquencies. It mostly handles credit card and other forms of unsecured debt, and medical bills. You’ll need at least $7,500 worth of outstanding debt.
How Much Does Freedom Charge for its Services?
Between 15% and 25% of settled debt. That means, as required by law, although some bad actors try it anyway, it doesn’t bill you a dime until there’s a settlement. You do want a company that’s upfront with its fee structure.
Yes, U.S. News has identified the best debt relief programs, and you can see why Freedom Debt Relief leads the pack. It’s an established, reputable, credible debt relief company that you can trust.