If you need help with your debts and creditors are harassing you, debt relief may seem like a good idea. Debt relief can help you get a fresh financial start. You can put your debts in order and once again enjoy peace of mind.
Debt relief refers to a number of different strategies that help in managing your debt. As always, some strategies may work better on one person and fail on another. And, some people may not qualify for relief at all.
Still, the approach does have the potential for delivering success — if you meet certain parameters. So, before we determine whether or not debt relief is a good idea, let’s take a look at what’s involved.
When Should You Seek or Not Seek Debt Relief
Sometimes, debt relief works differently for individuals. It may work better for you and fail on another person. You should consider the debt relief if you meet the following factors:
- You have tried to manage your debt and failed.
- You are months behind on credit card payments and other loans.
- You might otherwise have to file for bankruptcy protection.
Keep in mind though; debt relief will fail if you meet the following conditions:
- You don’t intend to make any long-term commitment to pay for your outstanding debts.
- You continue to add new debt to the existing one.
You’ll find more detailed information about this at https://www.freedomdebtrelief.com.
What are the Benefits of Debt Relief?
Benefits you will enjoy from relief of debt programs include:
1. A Viable Way Get Out of Debt: Negotiating with creditors for one-time payments in full to settle a debt for a lesser amount than you owe is the key benefit of debt settlement. If you can accrue the cash to fund these agreements you’ll see your bills go away.
2. Help You Save Money: You can settle your debts and get yourself some breathing room financially. If you pay just the minimum due each month, chances are you will stay in debt for a long time before becoming free from it.
3. Help You Avoid Filing for Bankruptcy: If you need to file for bankruptcy, the process is time-consuming and complicated. It requires a lot of paperwork and attorney fees as well. Also, once the court accepts your bankruptcy petition, your credit rating will be damaged and it may take years before you get a loan or credit card.
Issues associated with Debt Relief
You will find so many reasons encouraging you to consider debt relief but you should also be aware of some things. Availing yourself of debt relief can make it take longer to pay off your debt. You should always be aware of that before you make up your mind to get the plan. There can also be tax considerations, as the IRS sometimes considers forgiven debt a form of income.
The Effect On Your Credit Score
Yes, the debt relief process can lower your credit score. Given this approach only makes sense when you’re pretty far behind, your credit score has already been affected, so that isn’t as much of a concern as it might seem at first glance.
Wrapping It Up
So, is debt relief a good idea? It absolutely can be when your situation is such that your only other option will be filing for bankruptcy protection. Working out a settlement agreement with creditors, while not ideal, is still better than just walking away from your debts altogether. The consequences of doing so are much more severe than those of debt settlement.