Paying off your credit card debt might seem like an impossible task at first, especially when you’re short on income. It’s understandable how the whole process can become overwhelming if you don’t know where to start, and aren’t sure where the best place to find help is when it comes to clearing yourself from debt.
However, there are actually plenty of options out there to help you, so there’s no need to become too stressed about it. Here are some options of where to get help with debt worth considering when working to pay off your credit card debt.
Debt Relief Companies
Debt relief programs are available. They’re generally offered by for-profit organizations and involve them coming to an agreement with your credit card company about how to settle your debt. The settlement generally involves a large sum paid but doesn’t cover the full debt you owe.
In order to be able to provide the large sum, the company requests that you deposit money into a monthly savings account and transfer it into a temporary holding account. This will allow you to eventually save enough money over time to pay off your debts. It also involves advising the debtor to freeze any payments being made to the credit card company.
Freedom Debt Relief provides the four phases generally involved in a credit card debt relief program: build, negotiate, settle, freedom.
The account you deposit your cash into every month is an FDIC dedicated account controlled by yourself. As your cash builds, the debt relief company creates a plan to help you repay your debt.
When there is enough cash built up in your account, the relief program negotiates with your credit card company to settle the debts for a lower payment than you owe.
Those negotiating discuss with your credit company to try and get you the most savings off what you owe. Authorization is always sought from the debtor every time a debt is settled to ensure you’re will is always upheld.
When all debts are cleared, you no longer owe any money. You are free from your credit card debt.
As well as for-profit debt relief companies, you can also seek help from non-profit debt relief companies (although there aren’t as many of them). They can provide you with a free consultation in the beginning and help you with setting budgets and helping you pay off your debts.
Points To Consider
It’s also necessary for you to understand some of the important points of consideration when settling your debts with a debt relief company before signing up:
- They often require you to deposit money in the savings account for a minimum of 36 months before your debts are cleared. Make sure to review your budget before getting involved with a program.
- Make sure the debt relief company you choose can settle all of your debts. Understanding any interest fees involved that are set by the company will be important to note first.
- Make sure and understand the effect signing up with the company might have on your credit score. You might be asked to stop sending payments to your credit card company. Late fees can lead to further debt. Creditors may also chase up payments with calls. these are points to consider to make sure you’re protected from further falling into debt.
It’s always going to be important that you consider all of your options of where to get help with debt. One great option is to sign up for a credit card debt relief program.
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