Consumer Credit & Debt Help Services – CreditAssociates

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Do Debt Help Services Really Work?   Before you
ask how they work or if they truly work, its
important to understand how a debt help service
company operates. In a nutshell, debt help or
debt relief services offer you assistance to get
out of debt through various means, which include,
but are not limited to, credit counseling, debt
consolidation, and debt negotiation.   If youre
struggling to pay monthly dues for your loans and
other debts, and your stress is mounting from
creditors and collectors persistently calling to
follow up on payments, then debt relief services
might be a valid option for you. Its just a
matter of finding the kind of service you need
based on the kind of debts you have, the minimum
amount you can commit to pay every month, and the
amount of time you are willing to commit to pay
the debts.
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Going back to the question of whether these
services really work, the answer is yes but
only if you do your part. This means coming to
grips with the fact that you have a financial
problem that needs to be resolved with the right
kind of information, discipline and
sacrifice.   The first step in making debt relief
services work for you is choosing the right kind
of service for your situation. Heres a list of
the debt relief services you can readily find and
what it will take to succeed on a partnership
with them
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Credit Counseling   This service can work for
people who are trying to lower their interest
rates while staying away from new liabilities.
Credit counseling involves helping people in debt
face the reality of their situation and lay down
the facts on how to start paying off debt in a
sustainable way.   Credit counseling agencies
help their clients repay debts on a fixed
schedule. These firms set up whats called a debt
management plan or DMP, which helps reduce
monthly payment obligations through negotiation
and managed disbursement.   With a DMP, the
customer deposits money to the credit counseling
agency every month, who then makes the payment to
the creditor/s. The process will continue until
the debt has been paid back 100 percent, plus
interest. The monthly payments are made at a
reduced interest rate, which has been agreed upon
by the debt relief agency and credit card company
through pre-arranged agreements.   Once youre on
track with your DMP, the collectors will stop
with their regular calls for follow ups. However,
depending on the total amount of your debt, the
process of repayment can take anywhere from two
to five years.
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Debt Settlement This can work if youre
struggling to make the minimum payments on your
debts but youre willing to commit to seeing the
process through a specified amount of
time.   Debt settlement, or debt negotiation, is
when companies negotiate (or settle) directly
with creditors to resolve your unsecured debts
through an escrow account set up specifically to
settle the debt you have officially declared
cannot be paid in full based on the initial
terms.   Once you enter the negotiation program,
you deposit savings into a dedicated savings
account. Only when the debt negotiators finalize
the settlement terms do you pay your creditor
using the funds in the savings account.
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  4. Practice restraint.   Self-discipline is a
critical factor in getting out of debt. If you
have the habit of visiting the store every
weekend to buy new clothes, you may want to
rethink this habit and adjust. Better yet,
develop a new one try going for a walk in the
park instead and get some exercise. You can also
use the spare time to earn extra cash from
part-time work.   If something is on sale in the
store and youre tempted to make a purchase, make
a careful, honest evaluation of your financial
status and state of need. Do you need a fancy new
TV? Can it wait? Stop, think, and drive away that
impulse to buy. Most especially, never ever dip
into your fixed expenses funds to cater to a
whim.  
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 Through debt settlement, your balances could be
reduced by up to half or more of what was owed,
though this does not consider the fees of the
debt negotiation company. Often, the required
monthly deposits are lower than standard minimum
debt payments.   Take note that for any forgiven
debt, you might have to pay income tax based on
the amount that you didnt have to pay.     The
question of whether debt help services work or
not largely depends on your working relationship
with the agency you choose and how strictly you
follow the plans youve set up together.
Self-discipline is an important factor, as well
as your commitment to seeing the process through.
    If you like this article use this search
term DebtReliefNow or click on this link to
discover other articles on this similar topic.  
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