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How Long Does Debt Relief Take

You’ve had it up to here with your credit card debt and you need professional help. You’ve settled on debt relief as a financial strategy but are unclear on the particulars, including how long debt relief takes. Well, we’ve got you. Here is info on that and more.

What is Debt Relief?

Debt relief, also called debt settlement, is when you pay a company such as Freedom Debt Relief to negotiate with your creditors to allow you to shell out less than what you owe to satisfy your unsecured debts, meaning those that aren’t attached to collateral. That includes debt from credit cards, medical bills and some types of private student loans and business.

Creditors are motivated to work with you since they know that if you file bankruptcy – your other financial recourse – they’ll be left holding the bag.

How Does Debt Relief Work?

First, you’ll have a consultation with your company of choice so that it can assess your situation. After enrolling in the program, you’ll be asked to make monthly deposits into a savings-type account that you control, and which will be used as leverage during negotiations. Once each debt is settled and approved by you, the settlement amount is withdrawn from that account.

How Long Does It Take to Satisfy Debts?

Consumers usually are done in two to four years, although that depends on the company as well as the creditors. It also depends on your ability to save sufficient settlement funds.

Companies such as Freedom Debt Relief can personalize your debt relief program to match your goals and ability to pay. Other companies, however, merely have set program lengths from which to choose.

In any case, the amount of time debt relief takes is way less than the time it would take you to clear your debts by making minimum payments or sometimes by using a debt consolidation loan.

How Do I Know I’m Dealing with a Credible Company?

It’s a fact that the debt settlement industry has more than its share of bad actors. However, if you pick a reputable, established company, you’ll be fine. Run the name of the firm you’re interested in by your state’s attorney general and your local consumer protection agency. Turn on your heels if the company seeks payment before it’s settled a debt, or if it overpromises before it even knows your financial situation. Oh, and make sure the company you’re considering is accredited.

Does Debt Relief Damage My Credit?

The process of debt relief does cause a temporary credit downturn. However, your credit isn’t the greatest right now anyway, right? What’s more, once you’ve settled all your debts, your scores will rebound.

Also note that bankruptcy, which debt settlement lets you avoid, hangs out on your credit reports for up to a decade, depending upon whether you file Chapter 11 or 13.

How Much Will Debt Settlement Cost Me?

This depends on the company but in general, fees hinge on your debt load and your state of residence. Industry-wide, fees generally run between 18 to 25%, although companies such as Freedom Debt Relief start at just 15%.

Note that unlike some scam companies that care more about separating you from your cash than eliminating your debts, reputable firms charge nothing up front, which is what the law requires.

How long does debt relief take? You know that now, in addition to how debt relief works. If you’ve read this far, you’re serious about remedying your financial situation.

Really, haven’t you waited long enough? Get going on your new life today.

 

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