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Did You Know: Professional Help Can Be the Fastest Way to Complete Resolution of Your Debts

Posted By:  |  March 26, 2014  |  0 Comment(s)

It’s not perfect reasoning… but you wouldn’t get a loan without getting some professional advice, and yet, when it comes to paying off that debt, so many people choose to go it alone. Engaging a professional debt consultant can be easy and affordable, and, best of all, can help you resolve your debts faster and easier than you ever could on your own.

While we don’t recommend using a professional consultant as your very first option in every case, we do think that in situations where you can’t do it alone that it can be incredibly helpful. And as mentioned above, it can speed up the process and get you out of debt more quickly.

Here’s how a professional debt consultant can help you get out of debt faster.

What to Do When You’re Drowning in Debt

When you are facing a deluge of seemingly unmanageable debts, admitting that you don’t have all the answers isn’t an admission of failure. Getting professional debt relief help to consolidate, and resolve, your bad credit may be the most responsible, and effective, move you can make.

“Let’s be honest, people are financially disorganized,” says Gail Cunningham, Vice President of Membership and Public Relations at the National Foundation for Credit Counseling (NFCC). (1) Still, Cunningham doesn’t blame delinquent lenders who may be struggling to make ends meet in recessionary times. “The persistently high rate of unemployment coupled with the long duration of unemployment are still very real challenges many people are facing.”(2)

Act Now to Save Big

“The most common mistake people make is not addressing things that are driving down their credit score. Someone with missed payments should tackle fixing their credit with different strategies than people who have to pay off credit card debt,” says Cunningham.(1) Knowing which strategy is best for you is the purview of financial experts, known as professional debt counselors.

A professional debt counselor will help you to develop, and stick to, a timeline and a strategy that can make an overwhelming and paralyzing debt situation seem manageable. A Debt Management Plan (DMP) will allow you to regain control of your life through limiting your access to credit, and consolidating your payments into one monthly amount.

Settle for Less: Pay off Your Whole Debt for Less Than it’s Worth

Another option is debt settlement. Unlike DMPs, this option will leave a permanent mark on your credit rating. The idea is that, with help from a professional firm, you make a lump sum offer to creditors that is a portion of the amount owing. As with any private financial service, in debt settlement there are the good, the bad, and the ugly among firms. Do your research and ask questions, such as how the final payment will appear on your credit report, and what steps the service provider takes to ensure you will not be sued.

The speed at which you proceed to eliminate your debt will depend on which path you decide to go down. Obviously your budget is going to require review, but with some sacrifices it is entirely feasible that you can be making the same payments you are today, but, thanks to the strategic approach of your debt-management plan, actually be paying more on principal amounts and less in interest — thereby resolving your debts faster.

Knowing which way to turn can be challenging. Before you start, contact a non-profit credit counseling service to review your options and read the reviews on our site! If you are in debt crisis, the most important thing to know is that the sooner you act to remedy your situation, the better. No debt situation is impossible to correct, but if you want to avoid spiraling interest charges and rebuild your credit rating, you must tackle the problem head-on.

(1) http://www.theguardian.com/money/2013/nov/17/the-complete-guide-to-fixing-your-credit-score

(2) http://www.prweb.com/releases/2013/11/prweb11297779.htm

Poll

  • How important is it to you for a debt consolidation company to offer financial education resources?
  • Takes your existing debt and try to settle with your creditors for a lower amount. If you pay off the settled amount, your debt will be considered paid in full.
  • Negotiates with your creditors on your behalf.
  • Fee based on a percentage of your total starting debt or a percentage of the debt they save you.
  • Most settlement companies have you create a separate "escrow" account where you will make monthly contributions over a certain amount of time to contribute to your settlement. Once there is a substantial amount of funds to show your creditors, the settlement company will try to negotiate a lower amount of debt.
  • Combines all your debts and creditors into one monthly payment.
  • Allows you to pay one monthly payment to the consolidation company, instead of multiple payments to different creditors.
  • You no longer owe your original creditors; instead you pay one monthly payment to your consolidation company.
  • Consolidation companies can help negotiate lower interest rates on your debts and help lower your total debt payment in the long run. A lower interest rate will lower the amount you owe in the end.
  • Allows you to consolidate all your different debts into one personal loan that can be paid off over time.
  • Can offer borrowers a lower interest rate with a longer payback term (compared to high-interest credit cards or medical bills). This will lower the amount of money required to pay off the loan over time.
  • Personal loan debt consolidation can be an effective way to raise your credit score quickly (within 3-6 months).
  • Borrowers can receive funds from their loan within only a few days.

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