If debt is growing and you always find yourself falling short every month, it may be time to search out debt relief. A big part of selecting the best path to get rid of your debt is to know when it’s time to ask for help. Debt consolidation and debt settlement programs are both great ways to help get out of debt quickly, but are these methods right for you? There are no programs for people who are simply tired of paying their bills, but they are perfect for anyone who is late with payments, have bills in collections or have had a sudden drop in their income.
There are numerous non-profits offering debt management services, which include both debt consolidation and debt settlement. Some companies offer both, while others only do one or the other. To be eligible for either of these programs, you must be able to show that you don’t have enough income to pay your bills. If this is your situation, debt relief may be just a phone call away.
Debt Management Companies Can Help
If you are getting calls from collections, speak with them openly and honestly about your situation. When you have signed up with a debt management company, give your creditor(s) the contact information of the company. Generally, this will stop the calls while the creditor verifies the information. Explaining that you are working with a company who will be submitting a proposal on your behalf, most creditors will accept this information as your proactive movement to repay your debt. As the telephone stops ringing, you will gain some relief from the stress from being constantly reminded of your financial woes.
When the debt management company sends estimated new monthly payments, interest rates and/or debt settlement offers, the creditor(s) will either accept or deny the offer. It can take up to 60 days to hear back from them, at that time you will be informed of their decision and will have the ability to call the debt management company to get updated with creditor’s answers. After a few months of on time payments made through the debt agency, most creditors will begin to list your account as current with the major credit agencies.
You Have To Watch Your Credit Score
It is recommended that consumers look at their credit report fairly often in order to ensure the accuracy of the score and to catch any inaccuracies immediately. You are entitled to receive a free annual copy of your credit report from each of the three credit reporting agencies, including Equifax, TransUnion and Experian. If you enroll in a debt program, it’s a good idea to check your credit report prior to enrollment and then again after six months. When you compare the two timeframes, you will likely see a great improvement as creditors begin to receive their payments and update your credit reports accordingly. If any of the information is inaccurate, you can file a dispute with the credit reporting agency and get the corrected version updated in a short amount of time.
Dealing with debt is not an easy task. In fact, it can be a very exhausting experience. Once you have faced your finances and made an important step toward eliminating your debt, your life will begin to improve right along with your credit score.