Debt relief companies: Things to know before seeking help from them

| March 2, 2012
Debt relief is the way of getting partial or total relief from outstanding debts. Millions of Americans have incurred debts after the economic downturn in the country. Several people are facing financial crisis due to overwhelming medical bills, unemployment or anything else. These people are enrolling into the debt relief programs for unloading their debt burden.
Why do people opt for debt relief programs?
There is no problem about getting a loan. The problems arise when it comes to paying back the debts. Most of the debts are high interest debts, which the debtors can hardly pay off. This is why, the need for debt relief programs such as credit counseling, debt settlement or debt consolidation arises.
Debt relief companies – Are they legitimate?
This is a trillion dollar question. The legitimacy of the debt relief companies should be the primary concern for a person, who wants to get rid of debt with the help of such companies. Most debt relief programs require debtors to pay the companies, instead of the creditors. Under such circumstances, debtors are likely to pay, whatever they suppose to pay, to the companies. The debt relief companies won’t handle the delinquent accounts of the debtors without receiving payments from them. Since the debtors are about to pay the debt relief companies, not the creditors, they must be careful about their legitimacy.
If you are looking for a good debt relief company, you can ask your friends or relatives for recommendation. Nevertheless, before choosing any company, you must check its affiliation and fee structure.
Do all the creditors agree to work with debt relief companies?
Keep it in mind that not all creditors accept interference of the debt relief companies. Therefore, even if you want the company to negotiate with the creditor on your behalf, your creditor may not like this. Moreover, as you stop paying the creditor, he is likely to report non-payment to the credit bureau. It may affect your credit score badly.
You may find many ways to get rid of delinquent debts. However, the best way to avoid debts is to avoid using credit card. Don’t use your credit card, unless there is an emergency.

Category: Debt

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