It has become exceedingly easy to amass overwhelming amounts of debt. In fact, the average American has over $15,000 just in credit card debt alone. As long as you are paying your monthly payments on time, it can be simple and even exciting to be approved for new credit.
Eventually, though, many people find themselves living in the vicious cycle of taking out new credit cards to pay for their daily living so that they can afford to make their minimum monthly payments.
This type of debt is stressful and if you’re in it, you may feel like there is no end in sight. But the good news is that you are not alone. Due to the preponderance of people who have wound up over their heads in debt, there are many legal debt relief solutions available to help you out of it.
Most of these solutions are real and are used by millions of people to get out of the painful quicksand that debt can be. The problem is knowing which debt relief programs are real and which ones to avoid.
Here are 7 things you should look for when choosing your debt relief company so that you, too, can be on your way to financial freedom.
7 Critical Steps to Finding a Good Debt Relief Program
Not all debt programs are created equally. Some will say they are non-profit, but this just means that their profits are distributed differently.
What you need to know before jumping head first into a debt relief program is that it is not a magic wand that will eliminate your debt and let you start over immediately. No matter which program you choose, there are some drawbacks.
You will have to give up taking out new credit cards and loans. Your credit score will likely drop at first (see #5 below for details). Your creditors probably will not receive their first payment for two to three months, so you will still get those pesky phone calls.
But a reputable debt relief company can get you out of this spiral quickly and have your debt paid off on a regular schedule in one payment. You will be saving the hassle of juggling multiple monthly bills and interest rates and your overall pile of debt will go down much faster.
- Find a program focuses on saving you money. Some programs will work with your creditor to get them paid, but they put the effort in to get you the best deals. You need to choose a program that will negotiate with your creditors to reduce your interest rates or lower the balance that you owe so that your debt is easier to tackle.
- Check the program for predominantly five-star customer reviews. Do your research thoroughly. No matter which company you are checking into, remember that it’s common to see occasional bad reviews, but you should see many five-star reviews on sites like Yelp, Google Reviews, and Consumer Affairs. If there are satisfied customers across the board, you are likely dealing with a reputable business.
- Verify the fees that the program will charge. Obviously, your goal is to get out of debt as quickly as possible. When you are paying extra fees for a service to do this, you end up in debt longer. Instead, find a fair price for the service. It is normal to see fees in the range of 20% or less or a flat fee. Anything higher and you need to consider whether it’s worth the additional cost.
- Ensure that the program you choose is accredited nationwide. Each state has different laws when it comes to regulation of debt settlement. It’s important that you find a program that understands the laws in your state as well as how your debt resolution will affect you federally.
- Contact the debt relief program to have them explain how they handle the restoration of your credit and dealing with your creditors. Working with these types of programs will have an impact on your credit score. Most likely, it will go down in the beginning. Debt relief companies know this and good ones will work with you to help you improve your ratings as soon as possible.
Because the beginning of your debt relief relationship with your company will be based on ensuring that you both are doing your part, the first month or two of payments will not be going to your creditors. These will cover your fees and likely be placed in a type of escrow while your agent is working with your creditors to come to an agreement on your debt.
During this time, you will still be receiving phone calls. A good program has a system in place for this so that you can deflect those calls to an agent instead. You can find more details at NationalDebtReliefReviews.com.
- Find out how they set up their monthly payments. You can expect that, due to the type of business you are dealing with, you will have to pay through direct withdrawals each month. However, some companies make this easier for you by having two smaller payments scheduled, while others prefer one lump sum each month. No matter what, your payment should be smaller than what you are currently paying as your total minimum amount due.
- Check the fine print. How the company handles your paperwork says a lot about their reputability. Before you sign on the dotted line, review everything from how they handle your processing to what the documents say. You should feel comfortable with the professionalism involved.
Choose the Debt Relief Program That’s Right For You
You don’t have to settle with the first one that comes your way. There are many programs out there to help you.
Do your research and talk to people at the company you are considering working with. When you feel confident that they have your best interests in mind and know what they are doing, you can sign up with them to get on the fast track to financial freedom!