Debt Relief Options – When Does It Make Financial Sense To Use A Debt Relief Program?

Debt Relief Options When Does It Make Financial Sense To Use A Debt Relief Program

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We will now discuss how hiring a debt relief company affects your efforts at credit repair and if you should even use a debt relief company at all in that instance.

The choice to use or not use the services of a debt settlement company is sometimes a very thin line. There are different variables involved that affect the correct decision.

Let's start with an easy one:

If you are not in a debt crisis, you are only trying to get some negative items removed from your otherwise decent credit report, then you do not need a company like this. Even if you have a lot of debt, as long as it's manageable, do not hire a debt relief company.

If, on the other hand, you have a lot of debt, are behind on your payments with no chance of catching up, have rotten credit all around, then by all means, hire one.

Those two examples are extreme. But what about the cases in between. Truthfully, there are so many different variables involved, that it would take pages and pages of "what if" scenarios to cover this.

All I can offer you are a couple of general guidelines to steer you towards the right decision.

If you are in over your head in debt Hire a Debt Relief company

If you have a lot of debt, but it's financially manageable a this point, don't use one.

Simple as that. However, as far as repairing your credit, it becomes more complicated. It would seem that if using a debt relief company will lower your score even temporarily, won't that counteract your credit repair efforts? Hmm.

Well, look at it this way. Not paying your bills hurts your credit. Negotiating to settle or make arrangements through a debt relief company to pay off your creditors will indeed still cause the creditor to report you as late. BUT, eventually the bills get paid off, balances reduce, and credit scores WILL rise.

In addition, while you are paying off your current creditors through the debt relief company, you can focus for the time being on getting older, "dormant" negative accounts removed, and then as you pay off your creditors one by one, you can eventually get those negative listings removed. It is your federal right to challenge those items as well.

One caveat though. Done the wrong way, your credit repair efforts can prove futile. Especially in a situation like utilizing both a debt relief company and credit repair simultaneously. In all honesty, it's best to get a professional to do it.

I know I keep on about using professionals, but let me say this. I may hurt your feelings here, but again, I like to keep things real. For those of you who got into a mess with your debt load because of an unfortunate or series of unfortunate incidents not of your doing (medical bills, etc), disregard my next statement, as it does not pertain to you.

All others: If you are in a mess, with the exception of the above reason, you are here because you have made bad financial decisions in your life. Maybe you did not know the right decisions. My point is, you need to use a professional, because you have already proven that maybe good financial decision making is not your area of expertise and you need help.

Sorry if that angers you, but I pull no punches. Sometimes, tough love is needed.

I love consumer advocacy, as I consider myself a very passionate consumer advocate. However, your run of the mill mainstream advocate gives BAD advice sometimes, although they mean well. They assume that consumers with debt and credit problems can fix it all themselves. If they could do that, they probably would not be in this mess to begin with. Right?

Ok. Just had to vent for a moment.

So, use both types of companies if you are having problems with both debt and credit as it could get complicated. But, you need to choose carefully. Picking the wrong company at either end could screw the whole thing up even worse!

As a side note, but very important, please ensure that the company (ies) you hire, offers free consultations (unlimited is best). In that way, the counselor can listen to your own unique situation and devise a plan as to the best course of action. You should also tell each company about the efforts of the other, as they may change the whole game plan and they can tailor the correct plan for you.

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