Credit Debt Relief - How to Become Debt Free In Less Than 3 Years

Credit Debt Relief - How to Become Debt Free In Less Than 3 Years

Finding credit relief for mounting debt has now become a priority for a great many American consumers. It is estimated that there are now over 1000 companies that specialize in working with approximately 500,000 people throughout the United States who find that their debt has become unmanageable and are now seeking relief in one form or another.

If you are one of these people facing financial difficulties, you may not know what options are available to you and may, in fact, feel there aren't any. But credit counseling and debt consolidation are very good resources available to every consumer. The following information may help you find the right solution for your particular situation as you look for debt relief.

A person who seeks credit counseling and debt consolidation will find a company who can negotiate with creditors on their behalf. In doing so they may be able to get the creditor to lower the interest rate on the balance owed. This helps to keep monthly payments more manageable and prevents the debt from growing more rapidly than the individual can manage. The credit counseling agency often sets up a payment plan as well so that the individual can make one monthly payment rather than multiple.

It may take up to five years to pay off a debt in this fashion, but it is viewed more positively by credit reporting agencies than bankruptcy. Your credit report will be affected for a short time but not nearly as long other options. It is clear to the credit reporting agencies that you are willing to work with your creditors in a responsible, consistent manner and this works in your favor.

Debt settlement however, works in a completely different manner. With debt settlement the borrower agrees to pay a percentage of the total amount that is owed to the lender and the remainder of the amount is forgiven. So for instance, if you owe $30,000 to a creditor that you can no longer afford to repay it is possible to negotiate that amount down to $20,000.

This may sound like an incredible arrangement but it is better for the creditor to receive some of the money rather than none of the money should you opt for bankruptcy proceedings instead. It will adversely affect your credit rating for some time but it is a solution that can help you avoid bankruptcy and all that entails.

There is no doubt that a debt solution can be found for every situation. When seeking financial advice, be sure and locate a company with a solid reputation. You may wish to begin your search on the internet but once you have located a company that seems to suit your needs, verify their credentials. Ask lots of questions and take notes as you do. A reliable company will not withhold information and will be happy to address all of your concerns.

You will then want to inquire with the Better Business Bureau (BBB) and other consumer protection organizations to make sure that the company has no outstanding complaints against it and that it is indeed a reputable organization. Credit relief is within your reach so by all means become proactive and seek out the best solutions available to you to help you become debt free.

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