What is the best debt relief company?
Debt relief companies, sometimes called debt settlement companies, are one option for those struggling with credit card debt, tax debt, personal loan debt, and other types of unsecured debt. These companies can help you manage certain types of debt, but they won't be the right solution for everyone.
| Company | Forbes Advisor Rating | Learn more CTA below text |
|---|---|---|
| National Debt Relief | 4.5 | On Nationaldebtrelief.com's Website |
| Pacific Debt Relief | 4.1 | |
| Accredited Debt Relief | 4.0 | On Accredited Debt Relief's Website |
| Money Management International | 4.0 | Read Our Full Review |
Debt relief companies, sometimes called debt settlement companies, are one option for those struggling with credit card debt, tax debt, personal loan debt, and other types of unsecured debt. These companies can help you manage certain types of debt, but they won't be the right solution for everyone.
Debt relief will also often give you a fixed payment plan and a set payoff date, which can also make it worth considering — as streamlining your payments can make it easier to manage while helping you save money on interest. "One of the biggest advantages of going through a debt relief program is the savings.
While there isn't a government debt relief program that targets credit cards or personal loans directly, there are some government programs that could help with other types of debt. And there are government programs that help with housing, utility bills, and medical care that could free up funds to pay off debt.
Cons of debt settlement
Creditors are not legally required to settle for less than you owe. Stopping payments on your bills (as most debt relief companies suggest) will damage your credit score. Debt settlement companies can charge fees. If over $600 is settled, the IRS will view this debt as a taxable income.
Or you may find a debt consolidation loan with a lower interest rate than you're paying now. Those options won't hurt your credit; as long as you make the payments, your credit score should rebound. If you go this route, however, it's important to have a plan to avoid adding more credit card debt.
To pay off credit card debt without a loan, you could consider enrolling in a debt management plan, or utilize a repayment strategy like the debt snowball or avalanche methods. You could also try negotiating with your creditors to try and land a lower monthly payment or more favorable terms.
Consolidating credit cards means you move all of your debt to one account, which resets your credit limits. Once your credit card balance is zero, you can still use it as long as you don't close the account. But if having it open will tempt you to rack up more charges, then closing it may be beneficial.
Whether it's missed payments or charge-offs, they'll stay on your credit reports for seven years. Fortunately, settling debt does not mean your credit will be in the gutter during those seven years. Negative information has less impact on your credit score over time.
How long does debt relief stay on your credit report?
A settled account remains on your credit report for seven years from its original delinquency date. If you settled the debt five years ago, there's almost certainly some time remaining before the seven-year period is reached.
Bankruptcy is your best option for getting rid of debt without paying.
Yes, you can buy a home after debt settlement. You'll just have to meet the lender's requirements to qualify for a mortgage. Unfortunately, that could be harder after you settle debt.
If you get approved for the card, the creditor will not require you to close your other cards. And even with a debt consolidation loan, you may only face an account closure restriction in some cases.
- Take advantage of debt relief programs.
- Use a home equity loan to cut the cost of interest.
- Use a 401k loan.
- Take advantage of balance transfer credit cards with promotional interest rates.
Freedom Debt Relief is accredited by the Better Business Bureau and has an A+ rating. according to the organization. Based on customer reviews, the company earns 4.3 out of 5 stars. There were 359 total customer complaints lodged in the past three years, with 105 complaints closed in the last 12 months.
Debt settlement companies often charge expensive fees. Debt settlement companies typically encourage you to stop paying your credit card bills. If you stop paying your bills, you will usually incur late fees, penalty interest and other charges, and creditors will likely step up their collection efforts against you.
While consolidating debt can temporarily impact your credit score due to a credit inquiry and the new account, it generally has a less severe and shorter-lived impact than debt settlement. Your credit history remains intact, and as you make on-time payments on the consolidated loan, your score will improve over time.
Is it better to settle debt or pay in full? Paying debt in full is almost always the better option when possible. Research debt payment strategies — debt consolidation could be a good option — and consider getting financial counseling.
In addition, to protect the most vulnerable borrowers from the worst consequences of missed payments following the payment restart, the Department is instituting a 12-month “on-ramp” to repayment, running from October 1, 2023 to September 30, 2024, so that financially vulnerable borrowers who miss monthly payments ...
Is American debt relief legitimate?
American Debt Relief is a reputable firm that uses a process known as debt settlement to help consumers negotiate and settle credit card debt. This company boasts excellent user reviews and can help you get started with a free debt assessment.
National Debt Relief is a debt settlement company that negotiates on behalf of consumers to lower their debt amounts with creditors. Consumers who complete its debt settlement program reduce their enrolled debt by an average of 23% after its fees, according to the company.
- Create a budget that includes debt payments.
- Pay more than the minimum payment each month.
- Use cash when possible.
- Find a debt settlement company.
It will take 47 months to pay off $50,000 with payments of $1,500 per month, assuming the average credit card APR of around 18%. The time it takes to repay a balance depends on how often you make payments, how big your payments are and what the interest rate charged by the lender is.
- Make a list of all your credit card debts.
- Make a budget.
- Create a strategy to pay down debt.
- Pay more than your minimum payment whenever possible.
- Set goals and timeline for repayment.
- Consolidate your debt.
- Implement a debt management plan.
