Debt Relief - How To Find Reputable Debt Management Companies

Debt Relief - How To Find Reputable Debt Management Companies

There are thousands of companies offering debt programs in both the US and the UK, but how can you tell which ones are going to get the best results? More importantly, how can you make sure you avoid those companies that have no interest in getting you out of debt, but just want to sign you up for a debt program that involves paying them a lot of money?

This article will arm you with the information you need in order to not only find the most reputable debt management companies, but find the ones that are going to provide the best results for the situation you are in. The first thing you need in order to do this is a good knowledge of what it is that you will be asking a debt management company to do for you.

The best debt program for most people with quite a lot of debt will be a debt management plan. These are also known as debt payment plans and the process of using this kind of program is sometimes referred to as debt consolidation. While the process does involve consolidating your debts into a single payment, this is not done through a new loan, which is another way that the term debt consolidation is sometimes used.

When you use a debt program, the debt management company will negotiate with all your creditors with view to coming up with more favourable terms for paying off your outstanding debts. This will tend to involve agreeing to reduce the interest charges you are paying and can often include waiving or reducing any penalty charges too. These new terms are used to consolidate your old debts into one, more affordable, monthly payment that you make to the debt company.

The result of such a program is that you only have one payment to think about and it is for an amount that you can afford. It also gives you a timescale for becoming debt free and stops you being hounded for money by your creditors. To be offered this kind of debt program by a debt management company, you will need to have a substantial amount of debt which does not include secured debts such as mortgages. You will also need enough regular income to leave you some spare money each month that you can put towards your debt program payments.

If your situation is such that you would struggle to have enough money to pay the monthly amount for a debt management plan, there may be another type of debt program available which is still far better than facing bankruptcy. Debt settlement is a different process, which is suitable for people whose debts are even more serious. It involves a debt settlement company negotiating with your creditors to actually reduce the amount of your debt.

What they do is get each creditor to agree to write off a large proportion of the debt in exchange for paying off the rest in a lump sum. Instead of paying your creditors you put a monthly amount into a new account, where it is saved up and used to pay off the creditors as each now arrangement is agreed. Debt settlement is used a lot in the US, but not in the UK, because of an alternative scheme that they have there called an IVA. This is an individual voluntary agreement and it achieves a similar result to debt settlement in that you have a fixed monthly payment and a large part of your debts can be written off.

Once you understand what the options are, you are better placed to know what the best debt program for you might be. You now need to find a suitable company to provide it for you. Your main concerns should be to avoid the downright disreputable companies and to ensure that you get an offer that is right for you and which provides you with good value. You can do this by approaching several reputable companies and comparing what they offer you.

The safest companies are ones that have been around for some time and which can demonstrate that they have successfully taken many other people out of debt already. The easiest way to find such companies is to follow recommendations, to arrive at a list of organisations that you know are safe, and then apply to a few of these to compare the proposals that they make to you.

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