Most Americans are carrying some form of debt, whether it is medical, student loan, legal, or credit card debt. In fact, American consumers owe a staggering $11.13 billion in debt. As such, many Americans are eager to regain control of their finances and plan their financial future by seeking debt help or debt counseling. Many choose to use a debt relief agency, or enroll in a debt relief program in order to get help with debt and financial planning advice. However, as with shopping for any kind of good or service, it pays to do some research before diving in head first.
A debt relief agency offers several kinds of flexible debt relief options based on your current financial situation and future financial goals. Typically, three common debt relief services are debt consolidation, debt management and debt settlement.
Debt consolidation works by combining all of your outstanding debt into one single, monthly payment, which is then disbursed to your creditors and debtors. This allows you to obtain a lower interest rate, and simplifies your life by allowing you to make one monthly payment for all of your debt. Debt management introduces a third party, such as a debt counselor, to negotiate lower interest rates and payments on your outstanding debt. On the other hand, debt settlement allows a third part to negotiate a lower principal balance on your current debt.
While each financial situation is unique and it may be difficult to determine which option is best for you before going to a debt relief agency, it’s important to become familiar with what each option entails.
When searching for an experienced and reputable agency, consult the Better Business Bureau (BBB) in order to find out of if any complaints have been filed against the agency you have in mind. In addition, see if the company you have in mind is registered with The National Foundation of Credit Counseling or the Association of Independent Credit Counseling Agencies, both of which can provide invaluable insight. Or consider non-profit agencies.
There are several ways to get out of debt. It pays to take the time to do a little research before deciding which route to take.
