Debt relief companies assist individuals in avoiding bankruptcy and restoring their credit. Most debt relief companies are essentially debt settlement firms, with the ultimate purpose of assisting you in settling your debt for less than what you owe. Their services are never free like a debt consolidation loan, and some businesses charge exorbitant prices for their assistance.
When your debts become excessive, contacting a third-party company may be your only alternative. To assist you with your search, we compared all of the top debt relief providers, focusing our efforts on selecting firms that are honest, ethical, and transparent, with a proven track record of assisting individuals in getting out of debt.
What exactly are debt relief companies?
A debt relief firm is a company that negotiates with creditors on your behalf in order to decrease, cancel, or settle existing obligations. Aside from debt settlement, some short-term loans for making lifestyle easy. debt relief companies include debt management plans and debt consolidation.
Consumers who employ debt settlement plans are compelled to stop paying debts during the negotiating process, which can result in significant damage to their credit scores. Debt settlement agencies defend this by convincing customers that the credit hit is temporary and that resolving their debts will assist raise their credit score later on.
How Debt Collection Agencies Work
In most cases, a debt settlement business will open a savings account into which you will deposit funds for a predetermined period of time. This account will then be used by the corporation to initiate a dialogue, or perhaps a settlement, with your creditors.
The goal is to persuade your lenders that you will be unable to repay the loan. As a result, receiving monies from a savings account is preferable to receiving no money at all if you declare bankruptcy.
Debt settlement businesses frequently charge 15% to 25% of the amount of your debt for their services, as well as high fees for keeping the savings account open.
How did we select the finest debt relief programs?
Many debt relief agencies have a negative reputation because they recommend debt settlement solutions that can cause your credit score to collapse. However, there are numerous respectable businesses that can provide the necessary support.
We evaluated various variables while determining our ranking of the best debt settlement firms in 2022, including accreditation with the Better Business Bureau (BBB), third-party evaluations, general transparency, and overall services given. Keep in mind that not all of the companies on our list of the best debt settlement companies provide their services in every state.
Stepchange is the best option for debt settlement.
Stepchange is one of the top debt relief firms in the country, as seen by its overall rankings and evaluations. This organization has an A+ rating with the Better Business Bureau and has garnered multiple awards for its debt settlement and debt consolidation services.
Stepchange number allows customers to phone and consult with debt counselors for free, and the company can also be used for debt settlement. The declared purpose of Stepchange is to provide common-sense alternatives to bankruptcy that assist consumers in getting back on track and moving on with their lives.
Best full-service debt relief: CuraDebt
CuraDebt is another debt relief company with plenty of five-star reviews. This company helps consumers settle their debt for less than what they owe. It can also help initiate debt consolidation and tax debt relief with states and the federal government.
CuraDebt only requires you to have $5,000 of debt to qualify for their services. Whereas many companies require at least $10,000 or more. Debt can be overwhelming no matter how small, so CuraDebt is a great option if you have a smaller debt amount to settle.
4 Debt Relief Alternatives to Consider
Here’s a high-level review of four debt-relief options for customers to explore.
1. Do-it-yourself debt consolidation
Debt reduction agencies, for the most part, cannot do anything for you that you cannot do for yourself. You can phone your creditors and try to negotiate a reduced interest rate on your own.
2. Settlement of debts
Debt settlement businesses advise you to stop making payments on your credit cards. And other obligations and instead save those funds in a separate savings account. The organization will then negotiate on your behalf to settle your debts. For less than what you owe through a debt consolidation loan.
3. Debt management strategies
Debt management solutions require you to deposit a predetermined amount of money each month into a separate bank account. The credit counseling service will disburse payments to your creditors from this account each month. And they will also negotiate lower interest rates and better conditions on your behalf.
These programs have the potential to benefit consumers. They do ask that you pay off all of your bills in full. As well as any costs imposed by the organization that organizes the program.
4. Credit card debt consolidation
It’s also worth noting that you can consolidate debt with the help of a third-party debt relief company or on your own. Debt consolidation is most effective when your credit is good enough to qualify. For a debt consolidation loan with a lower interest rate than you are currently paying.
When comparing debt consolidation loans and products, like with any debt-relief choices, make sure to look for costs.
