How is Debt Settlement Different from Debt Counseling?
Debt settlement, sometimes called debt relief, is an aggressive approach to debt reduction through negotiation with your creditors. Freedom Financial can negotiate on your behalf. Our goal is to negotiate debt settlements at less than face value on your unsecured debts. Debt settlement is not debt counseling, though we can make recommendations on how to resolve your debt, that doesn’t mean debt settlement is right for everyone. Debt or credit counseling involves lowering monthly payments to individual creditors. An effective solution for short-term aid, but it won't help if you're already struggling to make your payments as is.
After you start with Freedom Financial, we'll help create a customized debt settlement program that may help you to resolve debt faster than simply making minimum payments. Freedom Financial's debt settlement program is ideal for those with a serious amount of debt, or those who are considering hardship programs like credit counseling or bankruptcy.
Debt settlement revolves around three core pillars:
Simplicity. Part of what makes managing large debt so hard is the organization required to keep up with multiple payment schedules, interest rates, debt amount, etc. When you work with Freedom Financial to settle your debt, you'll simplify the process to something more manageable. For example, instead of making eight payments on eight different days to eight different creditors, you'd just make one program payment every month into a dedicated account from which debt settlements are eventually paid out to your creditors.
Speed. One of the reasons people seek debt settlement is to resolve their debt faster than simply making minimum payments. Debt settlement will not erase your debt, but it can have a significant impact on the time it takes you to pay it off. It may also result in lower debt amounts, depending on negotiations. Stay on schedule and you could resolve your debt in less time—some people resolve theirs in as little as 24 to 48 months*!
Commitment. Above all else, you must be committed to the path toward financial freedom. Getting out of debt isn't as easy as getting in to it. Once your debt is settled, you'll need to stick to a debt settlement plan to pay off your debt in a timely manner. A life of financial freedom is worth committing to—you can't put a price on freedom!
How Does Debt Settlement Work?
How Does Debt Counseling Work?
You have a lot of options when it comes to getting rid of your debt. Many of the options have similar components, but they aren't the same. For example, both debt counseling and debt settlement involve negotiating with creditors. Debt counseling negotiations involve lowering monthly payments, whereas debt settlement negotiations involve negotiating a lower overall debt amount.
Your first step in debt counseling is to contact a counseling service. Your debt counselor will go over your debt with you, and help you determine specific "pain points". Your counselor will likely tackle the payments that are toughest for you to make first. The goal is to get your various payments down to something more manageable—something that fits reasonably within your budget. Credit counseling is a good solution for those that could consistently make their monthly payments if they were just a bit lower. Not sure if credit counseling is right for you? Contact Freedom Financial and speak with a certified debt settlement specialist about finding a debt solution.
