Can’t keep up paying the minimums anymore and looking for a way to start fresh? Exploring debt relief options is worthwhile for anyone struggling to keep pace with their debt. However, starting the process can feel a bit like opening Pandora’s box. Many debt relief customer reviews and objective lists exist online, but so do the warnings from government departments and blog posts telling you all debt relief programs are scams. Earlier this year there was even a lawsuit against Freedom Debt Relief, one of the nation’s largest debt relief providers with an 87 percent positive review track record on the Better Business Bureau (BBB).
To cut through the confusion, this article will address how consumers should perceive debt relief, so they can decide if it’s a viable strategy for them.
Debt Is Personal
The mass confusion surrounding debt relief companies probably stems from the fact that debt is personal and thus no two situations are completely the same. That’s why reviews are important but should also be taken with a grain of salt. Different people owe different amounts, have different creditors, and have different expectations on the process. After gaining a general idea of what’s acceptable and what isn’t in the debt relief world, drown out the noise and focus on your specific situation. Can a debt relief company help?
Accreditations Matter
Objective marketplaces that monitor the performance and reputation of businesses like the BBB are essential in sifting through the mixed reputation of debt relief companies. Legitimate companies should be accredited with the BBB and have a lot of reviews. You can’t expect them all to be positive, but the vast majority (at least 70-80 percent) of them should be. Other important accreditations for debt relief companies to hold are with the American Fair Credit Council (AFCC) and the International Association of Professional Debt Arbitrators (IAPDA).
Red Flags and Scams Are Common
We hear of all sorts of red flags when it comes to shady debt relief companies. Maybe they try to charge fees before settling your debt, try to keep your money in an isolated account you don’t have access to, or force you to stop communicating with your creditors. They might even go as far as to guarantee the success of their service or tell you everything will be resolved in a few months. It’s these companies that will leave you high and dry. Do the research into what reputable companies advertise and then stick to that criteria.
Debt Relief Has Disadvantages
If debt relief didn’t have any disadvantages it would be a scam. You know, those things that are always too good to be true. If a company is promising to have a substantial portion of your debt forgiven, and they say it won’t have any negative consequences whatsoever, you have to ask yourself if that makes sense. If you’re pursuing a less serious avenue of debt relief, such as debt management or consolidation, then there might not be any adverse effects. However, if you’re looking to debt settlement or bankruptcy, those things will leave a serious mark on your credit. The caveat is that if you’re eligible for debt settlement in the first place, meaning you owe a lot and haven’t been making payments, then your credit has likely suffered a lot already.
The debt relief world is a confusing one, and it’s made all the more maddening when top companies get sued, and people with improper expectations shout scam from the rooftops. As long as you keep in mind that both legitimate and illegitimate debt relief companies exist and the details that separate them aren’t that hard to spot, you’ll be better positioned to seek out a company that cares about helping your situation, and not just their bottom line.
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