Debt Relief

Debt Resources

Understanding Debt Relief

Debt relief is an umbrella term that includes debt settlement, consolidation, negotiation, and consumer credit counseling. Depending on the type of relief you select, you could reduce the principal you owe, lower your interest rates, or decrease your monthly payments.

The Debt Relief

Process

Debt Defenders offers a debt settlement program for borrowers. Debt relief experts negotiate to reduce the principal amount consumers owe. While this program reduces the balance, it doesn’t extend the length of the loan or lower the interest rate.

During the debt settlement process, Debt Defenders negotiates with lenders or collection agents to lower the loan amount. Lenders are willing to negotiate because they receive payment faster than they would if the client continued to make minimum payments or stopped paying altogether. At the same time, clients are happy to clear the debt in two to five years instead of decades.

Clients often prefer a debt settlement to a private debt consolidation loan. With a debt settlement, they can typically get out of debt faster, and they don’t have to worry about the high-interest rates attached to private loans. Also, they can get debt relief through a settlement even if they have bad credit.

Consumers have two types of debt – secured and unsecured. Debt relief is a viable option for unsecured debt, meaning debt that isn’t tied to a tangible asset. This includes credit card debt, personal loans, and medical debt. Also, some private student loans and business debts can be negotiated with debt relief.

Debt Defenders does not provide debt relief for secured debt such as mortgages, vehicle loans, or federal student loans. Also, Debt Defenders will not negotiate settlements for debts that clients take on after enrolling in the program.

Debt Defenders customizes the debt relief process for each client. The program is customized to fit the client’s budget and goals, so the length can vary. Still, most people complete the program within 48 months, with many finishing in 24 months.

You might be interested in handling the debt negotiation process on your own. You do have the option of contacting your creditors directly and then negotiating a settlement such as a payment plan or a one-time cash payment.

Getting a verbal agreement isn’t enough. You need to create paperwork with the terms of the settlement agreement. The lender must sign the paperwork, and then you need to put it in your files. Additionally, the settlement rate a creditor offers you is often far higher than what our company may get due to the total debt volume that we consistently negotiate, meaning you won’t save nearly as much money.

This can be time-consuming and difficult, which is why many people choose a debt relief company to represent their interests. When you go with Debt Defenders, you can take a backseat to the debt settlement process. You will need to agree to the terms of the settlement to move forward, but otherwise, you don’t need to have a high level of involvement.

The debt negotiation process can be long, meaning you will miss months of payments before Debt Defenders comes to an agreement with your creditors. Your creditors might get aggressive during that time, calling you and selling your debt to third-party debt collection companies.

Creditors also might threaten or pursue legal action. Fortunately, collection issues are generally only a problem at the beginning of the program and go away after several months. During the pandemic, all legal action is paused and which makes it a great time to engage in debt negotiations.

Debt Defenders is here to help. Clients can refer all creditors to Debt Defenders. The team will handle the calls and offer support during the process. The team can even help you find legal resources if your creditors move forward with a lawsuit.

You might notice that your credit score goes down at first when you engage in a debt settlement program. You will have to stop paying your accounts while Debt Defenders settles the debt. Missed payments impact your credit score, so it can go down.

While there is a short-term impact, it’s typically much less than you would experience if you filed for bankruptcy. Also, the impact might not be significant if you’re already making late payments. Fortunately, debt settlement can put you in a position to clean up your credit profile and improve your score.

Debt Defenders will provide you with resources to help you rebuild your credit. While your score might go down at first, you can come out much stronger with the knowledge needed to get a higher score.

Are you ready to get out from under your debt? Debt Defenders is here to help. Reach out to our team of certified debt consultants to find out how you can settle your debt for less. Call our toll-free number to get started: (888) 333-3851

Additional Debt Relief Information

Taxes on Forgiven Debt

Debt Defenders works to lower the amount of debt consumers owe. However, the IRS considers settled debt to be income. That means you might have to pay taxes on it. However, you can have the taxes on the forgiven debt waived if your liabilities outnumber your assets. You’ll need to fill out IRS Form 982, Reduction of Tax Attributes Due to Discharge of Indebtedness to file for an exemption. Because this can be confusing, it’s wise to consult with a tax expert before attempting to get an exemption.

Finding a Legitimate Debt Relief Company

If you are considering debt relief, you’ll need to find a legitimate company to help. When researching companies, look at the fees. Federal law prevents debt relief companies from charging fees upfront. Companies are not legally authorized to charge anything until the negotiation has taken place and the client has agreed to settle the debt. However, some companies still charge upfront fees. That’s a huge red flag that the company is not legitimate.

Get Help With Debt Relief

If you’re suffering from debt, finding the right solution can be overwhelming. There are so many choices, so how do you know if debt relief is right for you? You can make the process much easier by speaking to a debt consultant at Debt Defenders. The consultant will go over your budget, debt, and personal goals and help you decide if this program makes sense for your individual needs. The debt consultant will also answer your questions and help you make sense of the next steps.

If you want to learn more or find out if you’re a good fit for the program, call Debt Defenders today at (888) 333-3851 for a free consultation today or fill out the form below to be called by our debt consultants.

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