When faced with what seems to be an insurmountable debt, many people turn to debt-relief companies and methods to help eliminate it. If you are considering getting help from a debt-relief company, you may be confused about exactly what it offers. You may be interested in some answers to common debt relief questions at this point.
What is Debt Relief?
One of the most basic questions that people have deals with what debt relief is exactly. The term "debt relief" is commonly used by companies that promise to provide help from debt. This is a generic term and can encompass one of many different techniques that a company uses to help you get out of debt. Some companies use this term synonymously with debt settlement, while others offer a debt management plan to help you pay off your debt over time.
How Do Debt-relief Strategies Work?
If the company that you work with uses debt settlement, it will negotiate part of your debt away. It will talk to your creditor and get the creditor to forgive part of the debt if you are willing to make a one-time payment. If the company utilizes a debt-management plan, the debt-relief company will negotiate a lower interest rate with your creditors. Then you will make one payment each month to the company and it will pay all of your creditors.
Can They Help With Debt Collectors?
When you owe a large amount of money to a creditor, it is not uncommon to start receiving debt collection calls and letters. At this point, you may be tired of all of the communication that you are receiving. The only way that a debt relief agency can help you is if it is a law firm. If you hire a lawyer to represent you, debt collectors have to contact the lawyer instead of you.
Are Debt-relief Companies Legit?
Not all debt-relief companies are legitimate and many of them are only out to take your money. If a company approaches you about debt relief services and asks for a large upfront payment, you should feel very hesitant to work with it. You should only work with the well-known, reputable companies that are in this industry. You can research companies using consumer resources, such as the Better Business Bureau, to find out their credentials.
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