Dealing with debt can be a stressful experience. As you plan for the potential economic impact of coronavirus,
there are a number of steps that you can take to help manage debt in these difficult times. When researching debt relief options, make sure that you understand how the program works and potential risks of enrolling in it.
There are many companies and organizations that advertise that they can help you find “debt relief” by simplifying or reducing your debt, “consolidating” your debt, or negotiating your debt. However, the actual programs offered can differ quite a lot.
Debt settlement companies require you to save up funds in an escrow account. The following are all true regarding this account:
- These funds still belong to you
- The account must be administered by an independent third party and be under your control
- You are entitled to withdraw funds held in that account at any time without penalty
Debt settlement companies, which may advertise themselves more generally as "debt adjusting" or "debt relief” companies, negotiate debt reductions and offer to arrange settlements of your debts with lenders or debt collectors for a fee. Debt Settlement Companies represent you so you never have to speak or hear from a debt collection again.
Beware of debt settlement companies that charge up-front fees in return for promising to settle your debts.
If you're not happy with the alternatives, feel free to contact us if any other options are available for you to consider. The more you know about your choices, the more likely you'll be able to come to an agreement that works for your circumstances.
