Debt relief programs-4 legal ways to get out of debt
The number of consumers who are struggling with debts is overwhelming. By the year 2018, consumer debt has accumulated up to a whopping $3.9 trillion which is over 7.5% higher compared to the previous year 2017.
In 2019, credit card debt had also accumulated to over $1.067 trillion. Statistics also put the amount of debt per citizen to be $67, 700. That being said, we can comfortably conclude that a large percentage of US citizens are in a financial crisis and require help. This is where debt relief companies come into the picture.
These companies offer services that help consumers solve their financial issues without breaking the bank.
A deeper look into debt relief; how it works and the best reasons to go for it
Debt relief can simply be described as total or partial forgiveness of debts. Using loans and credit cards irresponsibly can lead to overwhelming debts with extremely high interest rates. A debt relief company can relieve you of the stress that comes with debt repayments. As soon as you pay off the debts, your credit report will have more positive entries and this can help improve your credit score.
With a poor credit score, it won’t be easy to qualify for affordable loans and credit cards.
Introducing debt relief programs (how they work)
Debt relief programs provide a workable and fair way for consumers to reduce their financial burden and get out of debt. The programs assist consumers to make affordable payments and with time eliminating their accumulated debts. Debt relief programs work in either of the two ways; lowering the interest rate or reducing the principal amount.
GreenDayOnline debt relief programs
Our financial coach will explain how debt relief programs work depending on your circumstances. This service is offered for free
The experienced financial coach also contacts your creditors and negotiates for a lower amount
You get advice from our budgeting consultants on how you can save or earn extra money and use the cash to pay the creditors.
Types of debt relief options
Credit card bills
There are different ways you can use to get debt relief on your credit cards. The first one is the credit card debt settlement program that can reduce the amount you owe.
The second option is the credit card debt consolidation program where you apply for another loan to pay off your outstanding credit card debts. This loan, usually a personal loan comes with a lower interest rate and a manageable repayment plan. With both options, you are likely to eliminate penalties and late fees.
If you want to reduce the interest rate for your outstanding amount, then a payday loan debt consolidation program can be a handy option. One advantage of debt settlement and debt consolidation programs is to help consumers eliminate both illegal and legal loans.
Both the options explained above, which are debt consolidation and debt settlement can also help get rid of outstanding medical bills. Medical expenses are one of the many types of unsecured debts that can be cleared through the debt consolidation program.
In most cases, having an unpaid medical bill won’t have a negative impact on your credit score. This can only happen when the debt is forwarded to collection accounts since it will show on your credit report and can bring your score down.
So if you have overwhelming medical bills to pay, make use of the medical debt relief programs as soon as possible before the debt is sold to debt collectors.
5 types of debt relief options offered by GreenDayOnline
Creating a budget frees some cash that can be used to settle your debts.
- You have 100% control over your money
- You can track your financial goals
- Helps organize your spending
- Helps you pay debts quickly
- Helps you invest
- Can help boost your credit score
- You may have to avoid spending on luxuries for a while
- Complications may arise due to inadequate fund allocation
- It may take some time to create a budget you can rely on
Best option for
Anyone who wants to be in full control of their finances and achieve financial freedom
By hiring a reputable debt management company like GreenDayOnline, you can pay off all your outstanding debts at a decreased interest rate
- The interest rate may be lower
- Over time, your credit score will increase
- Reduces financial burden
- Only unsecured debts qualify for debt management
- You also have to strictly adhere to a budget
Best option for
Anyone who can comfortably repay outstanding debts if the interest is reduced
Debt consolidation means getting a manageable repayment plan at a reduced interest rate through personal loans.
- Flexible repayment plan
- Interest rate reduces
- Helps avoid annoying collection calls
- Your financial habits have to change
- You still have to use a portion of your income for debt payments
- Missing a payment can lead to more debts
Best option for
Anyone who isn’t comfortably paying off multiple bills at a time
Debt settlement helps you pay a lower amount than what you originally owed.
- Your outstanding balance reduces
- Helps you clear debt fast
- Helps avoid collection calls
- Not all creditors can agree to it
- You have to start saving funds in a trust account
Best option for
Anyone who wants their outstanding debts decreased
Filing for bankruptcy prevents creditors from going after your assets
- Court intervention can help reduce the outstanding balance
- Stops collection calls
- Postpones judgment and foreclosure
- A bankruptcy entry remains in your credit report for up to 10 years
- Non-exempt assets can be liquidated
Best option for
Anyone is willing to liquidate their assets and repay debts
When GreenDayOnline debt relief program can be a good option for you
- You are not ready or can’t afford to pay high interest on debts
- Want to achieve financial freedom faster
- Need to get legal help with your debts
- Work with a reputable and reliable debt relief service
- Looking for an FTC compliant debt relief firm
- Need advice on which debt relief option is good for your situation
- Want to work with a company that offers 100% money-back guarantee if your debts aren’t cleared
- Need help with credit card, medical and payday loan debts
Tips for choosing a debt relief programs that work for you
- Conduct a good search with the keyword how to get debt relief
- Go through all the available options and familiarise yourself with their services
- Compare the options depending on your needs and budget
- Choose a program that suits your requirements and join
How GreenDayOnline can assist you in choosing a debt relief program that suits your circumstance
GreenDayOnline does not only specialize in offering debt relief programs, but we can also help you choose a program depending on your situation. We have a unique approach to debt-free life that helps clients;
- Know which debt relief option will work best for their financial circumstance
- select the best debt relief option
Frequently asked questions
Can a debt relief program improve my credit score?
Yes, depending on the type of program you join. If debt settlement is the best option at the moment, you will notice a slight drop on your credit score since the amount you pay will be less than what was originally agreed.
There are however other strategies that you can use to rebuild credit. This includes paying bills on time, not closing your unused credit card accounts, applying for new credit among others. Debt management and debt consolidation options can gradually improve your credit score.
Do debt relief programs work?
People who have hired the services of debt relief companies have gone through the programs successfully. But we can’t really say that 100% of these people have been successful. To ensure that the program works for you, here is what you need to do;
- Find out the amount you can comfortably pay and save using our debt payoff calculator
- Select a program that suits your financial circumstance
- Find a reputable and successful company that offers debt settlement and debt consolidation programs
- Go through the reviews on the company before hiring them
- Ensure that you have a written contract and be disciplined in making payments
- Ensure that you read the state laws concerning these programs to avoid being scammed
How can you define hardship programs?
A hardship program is a direct agreement between you and the lender to pay the money at a low interest rate or even skip some payments. This happens when you fail to pay due to certain issues like a long-term illness or job loss.
This program is different from debt management or debt settlement since you work directly with the lender, no third party is involved. The lender can agree on a repayment plan that you can afford which will make it easier to pay the debt.
How hardship programs work
With a hardship program, your lender reduces the fees and interest rate to make it easier for you to repay the debt.
How long can a hardship program last?
This program lasts for between 6 months and 1 year. The period can even be longer depending on the amount of debt.
Are debt relief programs expensive?
GreenDayOnline doesn’t charge any upfront fees for debt settlement and debt consolidation programs. You only need to part with a 15% success fee on the amount of enrolled debt.
This fee is only paid once the debts are cleared. There is also a 50 monthly consultancy fee for every 30 minutes spent with our tax attorney, savings consultant, and budgeting consultant.
One of our services which are budgeting and bill payment services attracts a fee of $50 for the first 10 monthly recurring bills. Any extra bill attracts a $5 fee.
It is however important to note that the fee charges vary depending on the debt relief company. GreenDayOnline charges an affordable amount for debt relief services. You also should watch out for fraudulent companies that don’t adhere to the FTC guidelines. Most of these companies will request an upfront fee and won’t do anything thereafter.
Things to avoid when you are trapped in debts
- Don’t only pay unsecured debts and forget the secured ones
- Don’t apply for a loan against your retirement savings account
- Be patient. Do not make quick decisions just to avoid harassing calls from your lender
- Do not pay any amount before having a written contract
- Avoid using cash-out refinancing to pay unsecured debts
Will I pay tax?
Tax applies when the lender writes off a debt amount of more than $600. For instance, you have accumulated credit card debts amounting to $20,000. It is obvious that no tax was paid for this amount considering that it wasn’t your income.
You only spent the money on personal needs and did not pay it back. If you join a debt settlement program, the company will negotiate with your creditors and a portion of the debt may be reduced.
If for instance, the creditor decreases your debt to $11000, it means that you will pay tax on this amount since the IRA considers $9000 as your income.
Is it possible to get help with debt relief without paying fees?
Yes, there are a number of non-profit debt settlement and debt consolidation organizations that offer debt relief services and provide financial advice without any charges. There are also agencies that only charge a nominal fee for providing financial advice that most suits your situation.
Again, be cautious when dealing with non-profit organizations to avoid getting scammed by people who are only there to take advantage of your situation.
We have heard cases of people being scammed by illegitimate non-profit debt consolidation and debt settlement firms and this is something that has been going on for years.
These scammers usually open fake businesses in the name of non-profit organizations only to lure unsuspecting customers by claiming to offer debt relief services for free. Once you enroll in their programs and expose your financial details, all forms of communication stop and they use your financial information for illegal activities. Before hiring a non-profit organization, ensure that it has a 501(c) (3) certification.
It is possible to get debt relief for student loans?
There are programs offered by the federal government to those who want to get student loan debt relief. These programs include;
- Federal student loan consolidation
- Income-driven repayment plans
- Public service loan forgiveness
- Teacher loan forgiveness
- Deal discharge
- Perkins loan cancellation
- Closed school discharge
How can I get debt tax relief?
If you fail to pay your taxes, the IRS has the right to seize your assets. It is therefore important to get tax debt relief before things get out of hand. Some of the available options include;
- Installment agreement
- Offer in compromise
- IRS forgiveness program
Real life example
My wife and I have accumulated slightly over $30,000 in credit card debts. I earn a monthly income of $900. Which is the best debt relief method for my case? Is bankruptcy an option?
Best solution from GreenDayOnline:
Filing for bankruptcy should be the last option when it comes to getting credit card debt relief.
This is because a bankruptcy entry can stay in your credit report for up to 10 years which can be a major hindrance to achieving financial freedom. Instead, consider other ways like joining a debt settlement program that can reduce the amount you owe.
GreenDayOnline can help decrease the debt at a manageable fee.our debt consolidation program will also help you repay your outstanding debts at a lower interest and manageable monthly payments.
How can I find debt relief services near me
The best place to find reputable debt relief companies near me is through an online search.
- Use the keyword debt relief near me and you will get a wide range of companies offering debt relief services in your location.
- Ensure that you go through the reviews as well as past client testimonials for each company before picking one that suits you best.
Which types of questions can I ask a debt relief counselor?
Even before working with a specific debt relief service, there are important questions that you need to ask especially to avoid being scammed. Some of these questions include;
- For how long should I enroll in this program in order to be debt-free?
- Which solutions do you offer for credit card debts?
- What are your fee charges?
- Are you certified or accredited
- Do your services include free budget counseling?
- Do you adhere to the FTC regulations?
- Can I be able to monitor my progress?
- What will happen if I don’t complete the program?
- Do you also offer debt relief tips for free?
How can I find the best debt relief company?
There are different strategies you can use to ensure that you are working with the right guys. These include the following;
- Check how long the company has been in the industry
- Go through the company’s reviews and success stories
- Confirm whether the company has a refund policy
- Check whether the company is licensed
- Compare the fees charged by the company to other debt relief companies
- Check whether the company follows FTC rules and guidelines