Debt Relief Options – What Are Your Options For Debt Relief?

Many consumers and businesses struggle with debt at some point. Stacking credit card, loan and other balances atop everyday expenses can quickly feel overwhelming, and debt relief options may be necessary in order to help borrowers manage their debt effectively. Debt relief can come in the form of lowering or consolidating debt, forgiving part of the principal, reducing interest rates or even merging multiple balances into a single low-interest loan. Depending on the type of debt relief sought, it can have an adverse effect on one’s credit score, so it’s important to consider all available options before selecting a course of action.

The UK government has the power to leverage its influence internationally to support debt relief for low-income countries, but this can only be achieved if it can bring all stakeholders to the table. This includes creditors, private and public, to agree a new approach to negotiating debt restructuring agreements.

One option for reducing debt is to work with a debt relief company, such as Freedom Debt Relief. These for-profit companies are able to negotiate with individual creditors to settle debts at a lower cost than the original balance owed. While they can often be expensive, they offer the potential to save a significant amount of money.

For a small fee, a debt relief company can also halt payments to your creditors in order to speed up the debt settlement process. These monthly payments are instead held in an account that the debt relief company holds, and when a debt settlement is reached, funds from this account will be used to pay off your outstanding balances. The company will then charge a fee for their services, typically 15% to 25% of the total enrolled debt.

Choosing the right debt relief company isn’t easy, as there are plenty of unreputable ones to avoid. In addition, if you choose to explore debt settlement, the debt relief company will likely place a claim on your credit report, which can negatively affect your credit score for up to 10 years. If your credit score is too low, you might not be able to qualify for certain loans in the future, and lenders will likely view your application as high-risk.

A debt consolidation loan could be a better option than a debt settlement program, as it can reduce your overall debt load by combining multiple balances into a single lower-balance debt. The only downside is that this will typically result in a longer repayment term than you would have experienced with a debt settlement, but it can be a good option for those who are struggling to manage their debt. In the case of a debt consolidation loan, it is important to make all payments on time in order to avoid damaging your credit score further. If you can manage your debt responsibly with a credit counseling agency or debt consolidation loan, it may not be in your best interest to seek debt relief through a company such as Freedom Debt Relief.