What You Need to Know About Your Debt Relief Options

 

Debt is an unfortunate reality for many people in the United States. It has been estimated that the typical American household has about $15,355 of credit card debt and at least $129,579 in other kinds of debt. At least 20% of all Americans say they are experiencing “debt hardship.” Many people are living paycheck to paycheck. An estimated 42% of people say they do not have enough money to live for three months if something happened to their job. As a consequence, the debt collection industry has grown. There are more than 4,500 debt collection companies in the nation. Many people who owe a lot of money are not sure what their debt relief options even are.

WREXandnbsp;has now compiled a list of criteria people can use to determine if they are a good candidate to use debt negotiation services. People who are considering using one of these services should take a look at the debt they have to determine what their best debt relief options may be.

1. How much of the debt is unsecured? Unsecured debt is any that is not connected to something specific that can be used as collateral for the debt. Secured debt would be a mortgage on a home or other real estate property or a car loan. Most debt management firms work wit people who have unsecured debt, that is debt that is not tied to tangible assets. If your debt is from credit cards, that is considered to be unsecured debt. There are some kinds of unsecured debts that debt management programs cannot help such as alimony, back taxes and student loans.
2. How much debt do you have? The debt relief options that you have available to you are often determined by how much debt you have. People with more than $10,000 in debt who need debt consolidation management are typically eligible for these kinds of services. If you have less debt than that, you may need to find other ways to deal with it.
3. Never pay fees first. If you need help paying off your debt, you should know that reputable firms cannot charge you fees up front. In fact, in 2011, the Federal Trade Commission put out rules and regulations on debt relief options. They state that a debt management firm cannot charge fees before the debt itself has been dealt with. As soon as you have received the services and the help that you need from the company, you will be expected to pay them whatever you agreed to pay but not before.
4. Make sure you are clear on the terms and the process. When you deal with a debt consolidation company, you need to be totally clear on what will happen and why. This can be a complicated process. If the company you are talking to about your situation is not willing or able to answer your questions, you need to go to aa different company. It is best to find a company that can stay with you for the entire process. If there is an instance where you need to go to court, for instance, you will be in a better situation if you have your debt consolidation service by your side.
5. Make sure you are clear on the fees. Sometimes people think that credit counseling will cost them less than debt consolidation but that is often not the case. Make sure you really understand what each of your options when it comes to your debt relief options will end up costing.
6. Know what will happen if you miss payments. When most people go through the debt negotiation process, it is almost inevitable that they will miss at least one payment. Most people will miss more than one. This can cause set backs and hurt their credit score, at least in the short term. Before you start the process, it is important to understand all of the tradeoffs and problems that you may have to deal with as you work with the debt relief companies and process.

If you have a lot of debt, there are debt relief options. Learning as much as you can about them is one of the best things you can do.