Getting Out of Debt with a Debt Resolution Program
6 MIN READ
Published April 07, 2023 | Updated October 02, 2023
If you are stressed because of mounting debt, it may be time to evaluate your options. A debt resolution program can help lighten the burden and allow you to pay off debt faster.
If you are struggling with large credit card balances and only able to make minimum payments, it may be time to learn more about debt resolution programs.
If you are stressed about your finances, you are not alone. 72% of Americans are stressed because of money. 22% of Americans are extremely stressed.
Some of the most common types of consumer debt for Americans are:
- Student loans
- Auto loans
- Credit card bills
- Medical bills
- Personal loans
Debt relief programs can provide you with a clear path toward paying off your unsecured debt and regaining control of your financial life.
What Is a Debt Resolution Program?
A debt resolution program is a strategy that can help you repay your creditors without hassle. It is a solution that helps you avoid bankruptcy.
A skilled debt negotiator can communicate with your lenders and credit card companies to negotiate on your behalf.
The goal of debt resolution is to reduce the amount of principal you owe and make payments more manageable.
This option may not eliminate your debt entirely, but it allows you to avoid complete financial ruin and work your way toward stability.
Over 98% of people who participated in a debt resolution program benefited from a reduction in total debt greater than the accompanying fees.
On average, you can expect to save up to 50% of your original enrolled debt before fees.
When to Look for a Debt Resolution Program?
Mounting debt can be demoralizing and can make it even more difficult to break free from the cycle of debt and spending.
Here are a few indicators that you should consider a debt resolution plan:
- You are consistently behind on your payments.
- You are only able to make the minimum monthly payments.
- You have experienced unemployment or a reduction in income.
- You have accumulated debt because of unexpected expenses.
- You have maxed out credit cards.
- You have incurred late fees.
- You're getting collection calls for being late on payments.
Once debt starts accumulating, it becomes increasingly difficult to regain control of the situation. There are a number of reasons people get into debt.
The increased cost of living
The index for all goods rose by 5.9% except energy and food in July 2022. The food index grew by 11.9% in 2022, the highest growth since April 1979. This increase has wreaked havoc on household budgets.
Those who experience financial stress may find themselves overspending on unnecessary expenses.
Those experiencing unemployment may use credit cards to cover their expenses, adding to their debt.
Unexpected medical expenses can take a toll on your income and can result in staggering debt.
Do Debt Resolution Programs Work?
It is easy to see why it is crucial to regain control of your finances before your debt spirals out of control. But do debt resolution programs work?
The success of the program will depend on a few factors.
First, it is important to work with a reputed and accredited debt relief company. Check the reviews of the company at the Better Business Bureau and the Consumer Financial Protection Bureau and ensure they have a good track record.
Debtors will also need to be committed to the program to ensure its success. While a debt resolution program can provide you with a way to pay off your debt, you will be ultimately responsible for making payments consistently.
Stick with the repayment plan so you can pay off debt sooner, avoid penalties, and complete the program successfully.
Here are a few pros and cons to consider to ensure the program is right for you.
Debt Resolution Pros:
- The program can help you avoid bankruptcy.
- It is less expensive when compared to the debt management plan and services offered by a credit counseling agency.
- It allows you to settle your debts for much lower than what you originally borrowed.
- If you stay committed and complete the program, you will benefit from its full potential.
Debt Resolution Cons:
- The debt settlement process may take up to 48 months to complete.
- It may have a short-term negative effect on your credit score.
- There may be tax consequences on the savings you receive from settled debt.
How Your Credit Score is Affected by a Debt Resolution Program
If you have already missed payments, have late payment fees, maxed out your credit cards, and are struggling to make minimum payments, your credit report may already be impacted because of your debt.
A debt resolution program may have a negative impact on your credit score, particularly in the beginning. However, it is important to consider that the program is usually recommended when you are on the edge of missing your minimum payments, starting to struggle to make payments, or have had a new financial hardship come up
A debt resolution plan can help you settle your debt for much less than what you would have paid otherwise and become debt-free sooner.
Debt Resolution Program are not a Scam
Most companies offering debt relief options today are legitimate, but it’s always worth doing your research first to ensure you are working with one of the highest rated organizations.
Here are a few ways to tell if a company is worth your time:
- Ranked highly within it’s key categories, with many positive reviews on Trustpilot
- A high star rating, and many positive reviews on Google
- Listed on the BBB site
- Their website is transparent and offers helpful resources
How To Find a Debt Resolution Program
With so many companies offering debt settlement programs, finding the right debt solutions for you can be difficult. Here are a few things to consider:
- Avoid companies asking for upfront payments.
- Ensure the company covers the types of debt that you are currently struggling with.
- Check the reviews of the company to ensure they have a good track record.
- Ensure that the company offers debt settlement services for the state you reside in.
- Choose a company that offers a free consultation with expert representatives.
- Work with a company that is transparent about its pricing and process.
Debt resolution can provide you relief from insurmountable debt, but it is crucial to work with a company that is transparent and has a good track record.
Before you enroll in any program, check the terms and conditions and ensure you are comfortable with the requirements of the program.
TurboDebt is an experienced and reputable debt settlement company with a track record of helping thousands of clients ease their financial burdens.
Our debt relief professionals will work with you every step of the way to help you find a program that is suitable for you.
We provide consultations, advising, and strategic planning services to create an effective plan to help you achieve your financial goals.
Contact us today for a free consultation and get back in control of your financial situation.