The Top Five Benefits of Debt Relief

March 9, 2020         By: Oleg Yavorovskiy

By Oleg Yavorovskiy, founder and CEO, Guardian Debt Relief
Image credit: Kelly Sikkema

In February 2020, credit card debt in the U.S. rose to a higher-than-ever $930 billion, along with increased delinquencies especially for younger borrowers, according to the Wall Street Journal. Even as unemployment and inflation have remained low, consumers are still spending more than ever before and setting record-level debt. 

Whether the debt is due to medical expenses, as most bankruptcies are a result of medical bills; credit cards; private student loans or personal loans, being in debt has a negative effect on one’s life, costing them far more in the long-term with fees, interest and finance charges not to mention the mental anguish it can cause. Debt settlement is the fastest, most cost-effective option for relieving and eliminating debt, particularly for today’s struggling consumers who are ready for a fresh financial start. Here are the top five reasons to consider debt settlement: 

1. Debt settlement is simple.

Debt settlement is an extremely simple process: the consumer is having a debt crisis, they sign up with a partner, the consumer pays a monthly amount that is affordable to them, and the debts are negotiated and settled and eliminated one-by-one.  Now that the person signed up for debt relief, all hassling letters and phone calls will be directed to your debt relief partner and in many cases, litigation is now prevented. The money in the escrow account is applied to their debts as they are settled, one by one. Most consumers today are working multiple jobs, taking care of their families, and even dealing with medical issues. Most consumers don’t have time to get involved in the debt relief process, making it a simple solution for those who don’t have the time but want a better financial future.

2. Debt settlement is faster than other methods.

Other methods in reducing debt could keep the consumer in debt for life. For example, debt consolidation will have the consumer take out a loan to pay off their existing debt in order to have just one “loan”. But the principal balance hasn’t changed.  Without debt relief or a major financial windfall, those with debilitating debt can be in debt forever. Debt settlement is a two- to three-year process, at which point the consumer can emerge debt-free. It is not an overnight process, but it is speedy compared with other debt relief options.

3. Debt settlement is cost-effective.

A reputable debt settlement partner will reduce consumers’ debts by 25%, 30% and even 40% or more of the original amounts owed, including fees. Providers will take a fee only once the debts are settled. The fee accounts for the time spent negotiating on behalf of the consumer to get their debts settled for the lowest possible amounts, which can take weeks or months in order to get the best deals with creditors that often take a hardline approach. Leveraging substantial experience and longtime relationships with creditors, attorneys and collection agencies, a debt relief provider can secure a better outcome than a consumer who doesn’t know the lay of the land and how much they can expect to save. 

4. Debt settlement has a track record of success.

Debt settlement has helped thousands of consumers eliminate debt, but what about other tactics? A major debt counseling association will not release key data on client outcomes in their programs, a red flag for any prospective consumer. Debt consolidation, another tactic that involves taking on a new loan to pay off other loans, with no guarantee of a better interest rate, has no supporting data on its effectiveness. The reality is, most consumers have substantial debt, and in most cases, will only succeed in eliminating debt if the principal amounts are reduced. 

5. Stick with the program, and it will work.

Unlike other programs, debt settlement will truly eliminate debt if the consumer sticks with the program. This means making the monthly payments as agreed upon and communicating to the debt relief provider throughout the course of the program.  Most people have on average between 6 and 8 unsecured accounts—from credit cards and medical bills to personal loans and private student loans—and within just two to three years, a reliable debt relief partner will aggressively negotiate these accounts down on the consumer’s behalf.  For the program to work, the consumer must do their part and stick with the program. 

In recent years, the Federal Trade Commission has created new rules for the debt relief space in order to protect consumers. Consumers should be aware of these rules when selecting a debt relief provider in order to find a reputable partner. First, debt relief providers may not charge upfront fees. Second, debt relief providers now have to disclose vital information before signing people up, including how long it will take to get results as well as the fees they charge. Lastly, providers need to be honest about their services and not make false claims. Seek out a provider who follows these guidelines and truly operates in the consumer’s best interest.

The right partner has the ability to help consumers transform their financial lives for the better, so it’s important to choose well. Look at reviews and find companies that are well-rated on places like Better Business Bureau and affiliated with trade associations like American Fair Credit Council. Consumers should always do their due diligence before selecting a debt relief partner. Select a firm with a long history of success in helping people eliminate debt so they can get to a bright financial future.