There are numerous debt relief programs throughout the nation, but you want to make sure you get the right one for you. U.S. News & World Report studied the leading accredited companies and ranked them based on factors including settlement time frame, types of debt settled, minimum debt requirements, fees, and customer satisfaction. The following is information about the top-rated debt relief programs.
First, What Is Debt Settlement And How Does It Work?
In debt settlement, a creditor agrees to take less than what you owe to resolve the situation. If credit card debt is the problem, program enrollment calls for you to cease making payments and instead pay into a dedicated account.
Once you’ve set aside sufficient funds, the company can start talks with the credit card company to accept the money as a settlement to close the account.
However, this tack can be risky since it can lead to negative credit marks and collection lawsuits. Also, the cost of late fees, interest, and other penalties may outweigh the amount you can slash your debt with a settlement.
What’s more, it’s not a given that debt settlement will work. Your creditor is not required to accept your debt settlement company’s offer. You also may owe taxes on forgiven debt.
The upside is that you may end up paying less than what you owe, with the unpaid balance erased. Debt settlement is also an alternative to bankruptcy and can possibly free you from debt in two to five years.
How Much Does Debt Settlement Cost?
Firms charge either a percentage of your total debt or the debt settled. For instance, if the company gets rid of $10,000 of debt and charges a 25% fee, the cost to you is $2,500.
What Are The Best Programs?
According to U.S. News, the top-rated debt relief programs are Freedom Debt Relief, National Debt Relief, Pacific Debt, and DMB Financial. Let’s look at each.
Freedom Debt Relief
This California-based outfit came in at No. 1 for accreditation. Since 2002, the company has had more than 650,000 clients and resolved more than $10 billion in debt. It is accredited by the American Fair Credit Council and has platinum certification from the International Association of Professional Debt Arbitrators.
Freedom Debt Relief handles credit card and other unsecured debt, and medical bills. It charges 15% to 25% of the settled amount. Debts are usually resolved in two to four years.
National Debt Relief
Founded in 2008 and based in New York, this company is cited as best for student or business debt. National Debt Relief focuses on debt settlement services and is one of the largest debt settlement firms in the United States.
The types of debt the company handles includes business debt, credit cards, credit lines, medical bills, personal loans, student debt, and unsecured debt. Fees are 15% to 25% of enrolled debt. You can enroll over the phone.
This California-based debt settlement company has resolved more than $300 million in debt since 2002 and offers services nationwide. Pacific Debt charges between 15% and 25% to settle credit card debt, medical bills, personal loans, private student loans, and all unsecured debt. Obligations are typically eliminated in two to four years.
This is an accredited debt settlement company based in Massachusetts. DMB Financial has helped customers settle more than $1 billion in all types of unsecured debt. Fees are undisclosed, but debts are typically resolved in three to four years.
So, there you have it, the nation’s top-rated debt relief programs. Once you figure out which one suits you, make that your first step toward getting rid of debt — and getting on with your life.