Published On: Wed, May 13th, 2015

3 Debt Relief Programs That Will Guarantee You Freedom from Debts

Debt relief companies offer a host of useful services that have served to get many people out of debt. Such people usually go on to build successful financial lives.

When struggling with debt, you might not know where to start. You might even have tried out self-help methods, but your efforts failed. This should not dishearten you. Debt relief services such as credit counseling, DMPs and debt settlement will help you deal with mounting debt.

Before you sign a contract with a debt relief company, you should first do your homework. You should make sure the company is licensed to provide debt relief services and that you are not being scammed.

Also, find out about costs and the ability of the company to deliver results. It is recommended to work with a reputable debt relief company, such as national debt relief – http://www.nationaldebtrelief.com/, in order to guarantee you will get a workable plan through which you can repay all your debts.

Below are some debt relief services that debt relief companies offer:

  1. Credit Counseling

Credit counseling involves sitting with an advisor who will give you the necessary guidance for money and debt management. A counselor will:

  • Help you to create a budget.
  • Recommend further reading to educate you on financial matters.
  • Arrange workshops aimed at training you on money management habits.

The credentials of your credit counselor matter. Insist on working with a counselor who is certified in dealing with consumer credit, money management and personal finance planning.

A good counselor will do an in-depth analysis of your financial situation and then create a personalized approach for handling your debt. Depending on how dire your situation is, you might need a number of sessions with your credit counselor.

To make your counseling sessions a success, you should give the utmost cooperation to your credit counselor and stick to the plan that has been adapted to your needs.

  1. Debt Management Plan (DMP)

Your credit counselor will assess your financial situation and may deem it necessary for you to enroll for a debt management plan.

A DMP will require you to deposit some money on a monthly basis with the debt relief company. This amount will be used to repay your unsecured debts based on a schedule that your counselor negotiates with your creditors. Some or all of your creditors could also review your interest rate and waive fees.

For your DMP to succeed, you have to make payments regularly. Your credit counselor might also advise you not to apply for new credit facilities while on a DMP in order to speed up your debt repayment process.

  1. Debt Settlement

A third option that a debt relief company could use to get you debt relief is debt settlement. This involves a negotiation between the debt relief company and your creditors with the outcome being that your debt is reduced to an amount that is more manageable for you to pay.

The reduced amount has to be paid in lump sum. To raise the lump sum, you will have to deposit some money in escrow every month.