Here Is How Debt Relief Programs Can Change Your Life  

Here Is How Debt Relief Programs Can Change Your Life  

Being a debtor isn’t the end of the world, regardless of the size of your debt, there is always a way out.

You can always leverage the various debt relief programs to get out of your sticky situation.

When it comes to debt relief programs, we are referring to any program that can help you solve your debt problems once it has been established that you can’t pay off your debts.

You are only eligible for this program if you can’t meet up with your monthly payments or perhaps, your monthly payment cannot cover your debt.

Let’s take a look at how debt relief programs work

The national debt relief programs work in different ways depending on your unique situation. Here, we will check out some of these methods.

The first two methods are the two most commonly applied debt relief programs and they are debt consolidation and debt settlement.

Debt Consolidation

This is the process of consolidating multiple debts (multiple monthly payments) with a high-interest rate into one monthly payment with a low-interest rate.

Debt consolidation is all about taking out new loans to offset your old debts then focusing on repaying the new loan.

You can set up a debt consolidation program by leveraging the services of a debt relief firm.

Debt Settlement

The debt settlement program is different from the debt consolidation program. Here, you will need a third-party (debt relief firm) to help you negotiate with your creditors so they can let you get off for less than what you owe.

Your debt relief agency will convince your creditors to receive a settlement offer that is lower than what you owe which will allow you to become financially free from debt.

One of the consequences of this is that it can negatively affect your credit score.

Here are other types of debt relief programs

Forbearance

With forbearance, you can suspend the monthly payments that you are paying your creditors and extend them to a stipulated time frame.

What this means is that you will contact your creditors and make them understand that you are incapable of making your payments.

Forbearance allows you to request that they reduce your payments or suspend your repayment for the time being to a specific date that you both can agree upon.

Once this is done, you can now proceed to get back on your feet without missing any of your debt payments.

Refinancing (Interest rate negotiation)

This type of debt relief is relative to credit card debts. In a situation where your credit card debts have overwhelmed you, you can seek help from your creditors.

You’ll negotiate with them so they can lower the interest rate on your credit card debt.

Once your creditors agree to reduce the accrued monthly interest on your debt, you can now focus on settling the principal which is the actual debt that you owe.

It is important to note the following so you don’t make mistakes;

Whenever you reduce the interest rate on a credit card debt, it is called interest rate negotiation but if the reduction is done on an interest rate of a loan you took, then it is called refinancing.

Now that you have seen the various debt relief programs available, you may be asking which one is right for you?

Get in touch with Debt Relief Association for a Free Debt Review and be rest assured that there are No Up-front Fees.

We will listen to you and create a unique path to financial freedom based on your situation.

The Bottom Line

Getting yourself into a huge pile of debt isn’t the end of the world, there is always a way out.