While getting into debt can seem devastating, there are options available to help you through the difficult times. Although there are legitimate companies that will assist you in getting out of debt, there are also bogus businesses trying to make money from your misfortune. Being cautious when dealing with any company is in your best interest.
Fees
When it comes to finding a way to get relief from your debt, it's important to do your homework. There are unscrupulous businesses out there willing to take advantage of desperate people who are caught up in the debt cycle. Before getting involved with any business or individual that makes promises to get you out of debt, check references, do an Internet search to make sure the business is legitimate and get any promises or guarantees in writing. If there is an up-front fee required from you to get out of debt, consider that a red flag. In fact, as of October 27, 2010, telemarketers working at for-profit businesses selling their services for debt relief over the phone are no longer legally allowed to charge a fee prior to the company successfully renegotiating the debt of the consumer and a written contract being signed by both the debt relief company and the debtor.
Loan Repayment
Depending upon the kind of debt you have, you might qualify for enrollment in a loan repayment assistance program. For example, if you took out a loan to get your law degree, some states have loan repayment assistance programs that will allow you to do community work in exchange for having a portion of your loan forgiven. States participating include Arizona, Florida, Iowa, Kentucky, Maine, Indiana, Louisiana and several others. In addition, there are loan repayment assistance programs for doctors and teachers, as well.
Snowball Effect
One common practice that you can use to help reduce debt on your own is to use the snowball effect on your bills. For this to work, you need to pay the minimum balance on all of your credit cards --- except for one. On that card, you're going to want to pay off more than the minimum. Most times, you should use the card that you can pay off the quickest. Once that card is paid off, you'll take the next quickest to pay off that credit card and apply the money that you would have paid off with the first card to this card. This accelerates the paying off process.
Negotiations
It's important to realize that you have the ability to negotiate with creditors on your own behalf. You don't need a company to intervene. In fact, since companies have to pay a fee to work out reductions through a debt relief company, those businesses might prefer dealing directly with you to get a reduction in either interest rates or the loan payment schedule.
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