When it comes to anything regarding debt help, you want to be sure you’re aware of all of the ins and outs. You don’t want to sign an agreement and then find hidden fees or a loophole that will cost you extra money down the line.
Any debt help or debt counseling service that promises fantastic results in a short amount of time or seems “too good to be true” is usually a scam. Some debt help and debt counseling services are out to benefit themselves by using your unfortunate debt situation, so be sure you do your homework. Also, you need to know the repercussions of entering a debt help program. Some plans, such as debt settlement, can tarnish your credit score for years to come; ultimately leaving you worse off than you were before.
- Debt Settlement: When you are offered a debt settlement by one of your creditors, it may seem like an easy form of debt help. A debt settlement is an agreement that states you will only have to pay off a portion of your debt, sometimes as little as half, in large monthly installments. The remainder of your debt will be forgiven as long as you honor the agreements in your debt settlement. Unfortunately, in order to qualify for a debt settlement you usually have to be around six months in default of your loan or credit card and your credit has already suffered. Also, a debt settlement will appear on your credit score for seven years, which can tarnish your creditworthiness. If you aren’t seeking debt help and you just wish to pay off all of your defaulted debts, then debt settlement may be right for you. Debt settlement does give you an opportunity to save a lot of money on a line of credit you have been putting off, but the repercussions of debt settlement will haunt your credit score for years to come. If you happen to be concerned with the future of your credit, then a debt counseling service may be your answer, but make sure you can separate the helpful from the deceitful.
- Debt Counseling Service - Most debt counseling services are designed to advise you on ways to skillfully get out of debt without damaging your credit score. It may seem like a sincere form of debt help, but some debt counseling services are only out to take advantage of your lack of knowledge and vulnerability. If you are at the point of seeking debt help, chances are you’ve dug yourself a hole and you need the guidance of a debt counseling service. An honest debt counseling service will explain to you exactly what they’re doing before they make any decisions. By doing so, they’ll lay everything out for you and repeatedly ask you if you have any questions about debt help. A debt counseling service is exactly that; a “counseling” service. They shouldn’t be pitching you offers right away and trying to get you to agree to anything. The main focus of a debt counseling service should be to instruct you, not to persuade you.
Debt help can be a confusing venture, for you don’t know who is truly out for your best interests. They should know the link bewtween your credit report and your credit. Certain creditors may pressure and manipulate you into debt settlement, but know what you’re getting into first. Debt counseling services should really be more of a knowledgeable friend than a salesman, so if you’re feeling bullied into anything seek another service immediately. There are many forms of debt help out there, and you have total control of which avenue you take.
