The debt conditions have overwhelmed many Americans who are now falling behind their weekly or monthly payments of bills and are disappearing deeper into debt. People now seek a way out of debt with the help of debt relief agencies who offer solutions for managing the finances according to the expenses and pending bill payments.
Professional debt relief firms see that you do not have to face the horrifying calls from the creditors and prevent the debt to become greater than your income.
Types of Debt relief options:
People rely on their debt relief programs to function as their financial rehabilitation program, which would encounter the debt payments. Such relief programs shape a highly structured management plan with the help of a counselor who estimates the person’s financial conditions to create an effective repayment program.
There are several debt relief options, adopted according to the debt and financial stature of a person. These are:
- Credit counseling
- Debt consolidation
- Debt settlement
- Debt management
Some of these debt relief services are beneficial for low debt payments, while others deal with huge debt concerns. You can select the services according to your requirements. Be aware of the fraudulent debt relief programs by con artists, who rip you off.
The Importance of Debt Relief Services to Get Out Of Debt:
Both Non-profit and for-profit organizations offer Debts relief services that make your debts manageable again. The ultimate outcome of the services is to provide people with a set amount of time, a financially stable plan, and negotiation with the creditors that are right for them. Depending on your personal financial situation, below are some ways through which debt relief services get you out of debt:
- Managing the debt:
Repayment of debt is the primary focus in debt relief services. The management plan is highly structured, which is made with the help of a credited counselor who can help the people to encounter the debt payments.
- Educating about Financial Management:
Additional benefit of any debt relief option is that it offers learning process for proper financial management that continues throughout the debt relief process. The debtors learn valuable tips to handle finances in the future to curtail future debt crisis.
- Personal Financial Picture
Debt management plan or credit counseling, constructed by the debt relief service providers, is helpful in providing a clear picture of the person’s finances from the very start. This helps the individuals to evaluate their spending habits and forces them to take a suitable course of action to pay off the debt.
- Gaining Control Over Finances:
Not only do the credit relief options offer a financial portrait, but also gives you time to regain control over your finances and offer you great deal of monetary relief, once you are finished with your plan successfully.
- Calculation Of Expenses
The credit counselor will offer objective scenario of your finances, by calculating your expenses and your income and will come up with an affordable plan for the debt repayments, which will help to deal with letting go of debt successfully.
- Lowered Interest Rates On Debts:
Another basic advantage of such debt relief services is not only to manage finances to get rid of debt, but also to lower down the interest rates on the debts, to make the payments easier. However, bankruptcy cannot help to reduce the interest rates on the loans.
Debt Relief Services and the Federal Trade Commission Rules:
Unfortunately, a number of debt relief services cost you more money, by attacking your finances the other way. Such shady services are out to profit on your debts. They actively solicit debtors and usually charge hefty upfront and ongoing fees on their services. Federal Trade Commission provides some rules and regulations to limit such deceitful relief services.
FTC rule that defines the term debt relief services:
“FTC prohibits any entity from requesting or receiving payment for debt relief services until such services have been fully performed, accepted, and documented to the consumer.” Here are few highlights of the FTC rules regarding the functioning of Debt Relief agencies:
- According to the FTC’s Telemarketing Sales Rule for debt relief services, any kind of “substantial assistance” to another company is illegal, if it is violating the rules.
- FTC also established strict parameters regarding “dedicated accounts.” The development of these accounts is to provide funds to pay off the settlement company fees.
- FTC strictly implemented the provision of any form of substantiation or evidence for the relief services before making certain marketing claims.
- Another rule, enforced by FTC, will cause the debt relief providers to adapt to new business models and to develop compliance programs that reflect strict advertising and marketing requirements.
In short, legitimate debt relief services that abide by the FTC rules for debt relief services, are ideal financial solutions to help overcome the debt concerns and are essential to manage your financial conditions and bank balances.