Debt affects more than financial situations — it also tends to encroach on borrowers’ mental states, sometimes even going as far as to affect their physical wellbeing. It’s no wonder so many Americans are looking for a solution to their growing debt woes. Household debt surpassed $14 trillion in the first quarter of 2020, exceeding the record amount of debt held during the financial crisis by $1.6 trillion.
When you’re searching for a way to escape serious debt — but want to avoid filing for bankruptcy protection — debt relief is a sound strategy. At this point, it’s only natural to wonder: Do debt relief programs really work?
The short answer is they can work, but their success depends on choosing a reputable program, knowing what to expect and sticking with the plan for as long as it takes.
The Importance of Choosing a Reputable Program
Before taking advantage of any debt relief program options, including those offered by reputable resources such as freedomdebtrelief.com, do some digging online. One of the major factors of debt relief success is choosing a reputable partner with which to work right off the bat.
Check out the website to make sure it’s professional, legitimate, secure and informative.
Look for honest reviews left by past and current clients — these will give you a better idea of how a program operates and how customers feel about their experience. While you’re at it, look for third-party reviews vouching for any program you’re considering.
Above all, reputable programs will provide you with all the information you need ahead of time to help you decide whether or not to proceed. This includes the possible benefits of debt relief as well as the possible drawbacks. On that note, beware of any companies trying to sweep the risks under the rug.
What to Expect from a Debt Relief Program
In looking at whether or not debt relief programs really work, it’s helpful to understand how they work.
The central idea behind debt relief — also called debt settlement — hinges on negotiating with creditors. If the possible alternative is a borrower defaulting on their debt, many creditors are willing to accept a lesser amount to resolve the debt at hand. Think of it this way: Most credit card issuers would rather get something than nothing, and settlement is a possible avenue to reach a compromise if the borrower cannot pay what they owe in full.
If you enroll in a debt settlement program, you’ll be responsible for making a monthly deposit into a designated account — which will eventually serve as your “bargaining chip” when it’s time for negotiators to work with your creditors.
Because it takes some time to amass the funds necessary to negotiate, debt settlement often takes at least two to four years to complete. How much you need to save and how long it takes before negotiations can begin depends primarily on how much you owe and across how many accounts.
Why There Are No Guarantees in Debt Relief
Always keep in mind there are no guarantees in debt relief. Case in point: You can follow every instruction to the letter and still find a certain creditor declines to negotiate. There is always some degree of chance present in the process. All you can do is everything in your power to maximize your chances of success.
Legitimate companies will tell you this, whereas crooked companies will promise outcomes they can’t reasonably — or legally — guarantee. Steer clear of any offers that sound too good to be true, as they probably are.
Debt relief can work and has worked for tens of thousands of Americans. But, as with any financial decision, there are risks and consequences of which to be aware before proceeding. Having realistic expectations before enrolling will help you do everything you can to make it work.