More than anything, knowledge about debt relief will be your greatest tool. When you are in doubt or if someone is trying to trick you, this particular knowledge will end up being your greatest ally as well.
This article will help educate you on three different things: the types of bills that you can enroll in a debt relief program, what you need to do while in a program and facts that you have to know about the Telemarketing Sales Rule (TSR).
What debts can be solved through debt relief
You have to understand that there are certain qualifications that you need to adhere to when looking for a debt relief option. All of them are effective but you need to qualify for it financially to be able to maximize the benefits of each.
By analyzing your financial capabilities and the types of debt that you have, you will figure out the type of program that you can enrol in. For instance, people will secured debts are beyond the help of debt settlement. This type of program involves defaulting on payments so you can prove that you are unable to pay off your debts. The idea is to threaten with bankruptcy if the creditor will not reduce the debt that you owe. In a secured debt, this will not work because the lender will be the one to threaten you with the collateral that you put up as requirement for the loan.
A secured loan is best with debt consolidation loans while debt settlement and debt management can accept cash advance loans, credit card debt, medical bills and unpaid utility bills. Other details will depend on the company that you will be dealing with.
What you need to do while in a debt relief program
Now that you know what type of debts you can enroll in certain programs, here are tips on how to make sure you will succeed in becoming debt free.
First of all, you have to stop acquiring debts. If you have to keep your credit cards locked up – do so. It helps to make the commitment to live within your means. That entails developing the habit of paying for every purchase in cash. You should also learn how to send your payments on time to avoid penalty charges. This is very challenging because the temptation to spend increases as your debts decrease.
Another thing that you need to do is to make sure you follow through your debt relief plan. That could be a payment plan, a debt management plan or a budget plan. The important thing is to let the guide do its work – especially when you have displayed evidence that you cannot handle your own finances properly.
What you need to know about the TSR
If you have to hire a company to help with your debt relief efforts, make sure that you know your rights as a consumer. As with anything that involves money, scammers exist to swindle you out of hard earned money.
Based on the Telemarketing Sales Rule, debt relief companies are not allowed to ask you for any upfront fees. No legitimate company will ask this from you. If there are fees, it has to be charged after there is proof that the program worked.
You should be very careful about what they promise and deliver. You can actually report them if they lured you with false advertisements – same is true for any false promises. They should inform you of what you should expect and they must follow through with that.
If you have to send payments to an account that the debt relief company set up for you, make sure that it is insured and well protected. You should also maintain full control over it.
These are important considerations as you make the decision to use debt relief to get out of your credit obligations. But apart from that, remember that you should also do something about what got you deep in debt in the first place. If not, you may end up in the same situation again in the future.