It can be confusing trying to find legal, reputable places that offer real, actual help for getting out of debt. Many places that offer debt help are really no more than scams looking to take advantage of already-vulnerable consumers. But that doesn’t mean that legitimate help is impossible to find. There are many nonprofit debt help organizations out there that are committed to helping people get out of debt. There are some important factors to keep in mind when trying to find where to get debt help.
The first and best thing you can do when considering where to get debt help is to be completely honest with yourself about your situation. There are many debt calculators available online that can help you figure out exactly if the amount of debt you’re carrying is reasonable, find out how long it will take you to pay off your debt at current rates, and discover how much you’d have to pay towards your debt to have it paid off by a certain date. There are also many budget planning tools available for free online that can help you keep track of how much you spend versus how much you can actually afford to spend. Knowing how to manage a budget is the most crucial step you can take towards managing your debt.
If it’s credit card bills that have driven up your debt, you can also try negotiating with your credit card company for a lower interest rate. Many credit card representatives are authorized to offer lower rates on the phone. A ten-minute phone call to your creditors could end up being just the debt help you need, without any need for outside assistance.
How to Find Outside Debt Help
If your debt problem is too much for you to handle on your own, it may be time to consider finding outside help. But knowing which agencies to trust can be confusing. The National Foundation for Credit Counseling (NFCC) is a great resource for American families who are looking to undergo credit counseling as a way to get debt help. The NFCC has member agencies and offices around the country that are committed to helping households who are struggling debt. Credit counseling is also a required step in declaring bankruptcy, so even if bankruptcy is on the table, you’ll need to go through the counseling first. The NFCC also has resources available such as budget planning tools, housing counseling, and other financial tips and services. The NFCC also provides accreditation for individual credit counselors around the country that guarantees professional debt help for consumers at little to no cost.
Finding a Debt Counselor
The most important thing to keep in mind when considering where to get debt help is that debt counselors should be nonprofit organizations. Nonprofits get their funding from creditors, not consumers, so you can be sure the firm will have your best interests at heart instead of trying to make money off you. Make sure to check out the agency’s privacy policy to make sure they aren’t selling your information. Also, find out what the enrollment and monthly fees are. IRS regulations and state laws made high charges for the services illegal, so the fees – if there are any – should be very small. Finally, find out exactly what you’ll receive for their services and get it in writing. A quality debt counseling agency might provide not only counseling, but also a debt-repayment plan and help with budgeting.
Debt Consolidation Services
Debt consolidation can often seem like the magic bullet of debt help. It basically consists of taking out one big loan that will cover the cost of all the smaller bills that can make you feel like you’re drowning in debt. There are many problems with debt consolidation services, though. These big loans can often be very difficult to get and typically come with much higher interest rates than those smaller debts may have. This means that the lump sum monthly payment may be less, but you’ll end up paying more in the long run.
Other Places to Look for Debt Help
There are ways to consolidate your debt without the aid of a debt consolidation services. A home-equity loan can be a good way to pay off many small debts at once, with the advantage that these loans typically carry a fairly low interest rate and that interest is tax deductible. The bank that holds your mortgage should be able to tell you if you qualify for this kind of loan. A “cash-out” refinancing is another home-related option for paying off a lot of debt at once. In this kind of loan, you refinance your house for more than the amount you currently owe on it and use the extra cash to pay down debt. Again, a financial officer at your bank should be able to help with this option. While these do-it-yourself options may seem like a great solution, it is important to remember that they will only be a permanent solution if you also change your spending habits to avoid falling into the debt trap again.
