Almost ½ of all American have credit card or unsecured debt and each of them averages $5,700 in credit card debt. The amount of revolving debt – unpaid monthly balances- is increasing each year. Paying off even as small as debt as $5000 can be impossible.
The credit card companies design it that way because interest and fees are how they make money. If you are one of the millions of Americans with credit card debt, you can find a debt relief plan that will help you consolidate your debt and help you pay it off.
What is a Debt Relief Plan?
Debt relief is a simply a way to get out of debt. You can do it yourself, if you have enough discipline and like negotiating, or you can look into different companies that will work with you. The debt relief company will negotiate with creditors holding unsecured notes – like credit cards – to lower payments, interest rates, and fees. While they are doing that, you set aside a certain amount of money each month into an escrow account. As that account grows, you will pay off your debts. A good company will help you learn to manage your money in the future.
What are the Pros and Cons?
On the bright side, you often end up paying off less than you owe. On the negative side, it does take between two and five years to get debt free. Your credit rating will take a hit, but since you are probably either barely keeping up or are falling behind anyway, that probably doesn’t matter at this point. Once you are out of debt settlement and are not behind on payments, your credit score will improve.
Why Would A Creditor Settle?
The creditor, or often, the collection company wants to get paid. If they get even a percentage of what you owe, they will be content. By making your debt manageable, you will be more likely to pay off your debt. Working with you is a win-win situation.
Not all companies will negotiate, but most will, and a good debt relief company knows which are the easiest to work with.
How to Pick a Debt Relief Company
There are some shady debt relief companies, so do some homework. Go through the accreditation and ratings to make certain that they are respected in the business community. Check out ratings from third party reviewers. Read review by actual consumers. Read the fine print carefully. If you don’t understand it, ask. Understand what fees you will pay and how your bills will be repaid. Look for longevity – experts recommend a business history of more than 16 years. Make certain that the company can operate in your state.
How to Get Started?
Getting out of debt is a possibility, but only if you take the first step. And that first step is to start with an internet search for debt relief companies. What are you waiting for? Start your search now.