If you have maxed out your credit cards and are continuously sinking deep in debt, you are probably stressed out and hoping to find your way out of this financial crisis. How are you going to clear your debts without losing a fortune from debt collectors?
Working with a debt relief company is one of the easiest ways to solve your debt problems. Professionals from these companies can help you negotiate with your creditors, allowing you to pay less money than you owed your crediting company initially.
But how does credit card debt relief work? You may be wondering whether working with Freedom Debt Relief could provide the best debt relief options for you. Here is a breakdown of how credit card debt relief works and whether it is a viable alternative to restore your negative credit score.
Debt Relief: Meaning
Debt relief or settlement means that your creditor has agreed to accept less than what you owe them and that debt collectors cannot bother you anymore. For that reason, you don’t need to stress about debt lawsuits being filed against you. There are different types of debt relief, including credit counseling, debt consolidation, and bankruptcy, you can use to conveniently settle your credit card debt and restore your financial flexibility.
How Credit Card Debt Relief Works
Debt settlement will only come to play if you have failed to pay your debt on time on numerous occasions. Your creditor or debt collector will not accept less than you owe them without any valid reason or if they believe that you can still pay the full loan amount as per the initial agreement.
Once your credit scores are shredded and you have no other way to settle your debts, stress and doubts begin to creep in. However, you don’t need to worry since this is where reputable credit card debt relief comes to your rescue.
Credit card debt relief companies are for-profit businesses that charge you to negotiate with your creditors (the lenders you owe money) on your behalf. Their goal is to get creditors to accept less than the full amount you owe in exchange for settling the debt. Here’s what they do.
They generally contact creditors or debt collectors on your behalf and negotiate with them to either reduce the debt amount or have a better payment plan. Their services come at a fee, usually a percentage of the amount you save after settling your debt.
Your credit card debt relief company should attempt to negotiate with your creditor for a lump sum payment, lesser than the debt you owe. As its agents hold discussions, they will require you to make monthly payments to an account you can easily monitor and control.
However, the account will be run by an independent third party. After reaching the targeted lump sum amount, an agent from the debt relief company will ensure the money is transferred to your creditor’s account.
The Payment Process
As the negotiations proceed, your credit card debt relief company may instruct you to stop paying your creditors until they agree on a reasonable debt settlement. Meanwhile, you may receive multiple calls from debt collectors after you have credit card overdue bills for 180 days. Once 180 days elapse, credit card companies can write off the debt and sell it to a collection agency at a reduced price.
This is when a credit card debt relief company comes in and tries to ensure the crediting company or debt collection agency agrees with you regarding the amount of money to pay back. Once the two parties reach a mutual agreement, you have to comply with the agreed-upon terms. If the money isn’t enough to clear the entire debt, you will keep paying the balance to the credit card debt relief company until the full amount is covered. Afterward, your debt relief company can start charging you for its services.
How does credit card debt relief work? At this point, you probably have an answer to this question. Working with a credit card debt relief organization has multiple benefits, including reduced debt amounts, prevents bankruptcy, and eliminates harassment from creditors and debt collectors.
Contact Freedom Debt Relief today to get personalized credit card debt relief services and avoid any related inconveniences.