There is no shortage of published research articles showing that just too many US citizens currently struggle with debt. Whether it’s household credit card debt, student loan debt or auto loans, the numbers are staggering. In aggregate, Americans currently owe more than $1 Trillion in total credit card debt with the average household balance surpassing $8,500 at the end of 2019 and likely to continue higher into 2020. Likewise, total student loan debt in the US just reached $1.6 Trillion. Due to the compounding nature of high APR credit cards, most individuals that struggle with credit card debt simply cannot get ahead. Others may be struggling with student loan debt decades after they graduated even though they have a well-paying job. This debt acts as an albatross, making it hard for someone to get a hold of their finances in a meaningful way, as it seems every paycheck goes toward the vicious and never-ending cycle of debt. Debt will also bring down an individual’s credit score, making it much harder for them to qualify for more important loans like a home mortgage or auto loan. A debt relief company can help people break free from this vicious cycle and take control back from high interest rates.
How Does a Debt Relief Company Work?
You may have heard that a debt relief company can help alleviate your financial burdens by negotiating your unsecured debt with creditors. The ultimate goal of a debt relief company is to leverage their relationships with creditors in order to convince them to settle your debt for less than the principal amount owed. In so doing this, the client can pay back less than what they actually owe and save money on a month to month basis. Creditors are willing to negotiate with the debt relief company because they typically have a close relationship with the debt relief company and would never want a struggling consumer that owes them money to file for bankruptcy. If that were to happen, the creditor may not get any of their money back at all. So, as opposed to taking a full loss, the creditor works with the debt relief company so that they may recoup some of the principal amount owed to them. Eventually, both parties go back and forth between negotiations until they meet at a middle ground. Debt relief companies are highly adept at finding this middle ground on behalf of their clients, so that they can save them as much money as possible. In other words, the debt relief company is advocating with creditors on your behalf, in order to convince them to settle your credit card or personal loan debt for less than the full amount. This ends up benefiting both parties since the creditor will get a portion of their money back (in a much quicker timeframe) and the individual that owes them money can pay back less, save money and ease their financial stress.
Why Use Debt Relief Programs?
You may be wondering why you should use debt relief programs at all. The answer is simple: experience and know-how. A debt relief company often has teams of specialized negotiators with years of industry experience and know-how. The debt negotiators have a tremendous amount of experience dealing with creditors and have already built up a rapport with various banks and collection agencies over the years. In essence, debt strategists can be the best advocates to boycott on your behalf with various lenders and creditors. These debt specialists and professionals take a unique approach in looking at what a consumer owes and can compare this amount to others who have been in a similar situation and their past reductions from similar debt amounts. After which, the negotiating team figures out how much money they may be able to save the individual and provides them with a quote for immediate payment relief. In doing so, they are able to map out a plan specifically tailored plan for your financial freedom. With this information in hand, the negotiators can talk to the creditors, settling someone’s debt for a fraction of what they owe. In closing, a debt relief company can help you by providing immediate monthly payment relief which you can then use to jettison the other debts on your balance sheet. Allowing you to put a stop to the vicious cycle of revolving credit card and personal loan debt, take back control from high interest rates and move on with your life—debt free.