The decision to get yourself out of debt is a life changer, if you are willing to make the necessary commitment that goes with that.

Getting out of debt involves more than just paying off a few credit cards. It means changing spending habits; learning to how to budget; knowing who and how much you owe; prioritizing debts; creating emergency and retirement funds; and knowing where to find help when you get off track.

In other words, there are a lot of decisions that need to be made.  It’s also likely that you’re going to make some mistakes along the way. Here are a few of the most typical, and how to avoid them.

1. Mistake: Never changing you spending habits.

We’re all creatures of habit – and spending money is no exception. We shop in the same stores, drive the same car and even eat the same restaurants because it’s what makes us comfortable.  What you don’t realize is it’s also costing you more than you can handle financially. Remedy: If you won’t change your spending habits, you won’t ever get out of debt. Start with your morning habits (have your coffee and breakfast at home). Start packing your lunch. In the evening, watch games or movies on TV, while eating a home cooked meal. You will see an immediate impact on your daily spending habits. You don’t have to do without….you just need to make smarter choices with what you do.

2. Mistake: Signing up for a debt-relief program, but not understanding what is expected.

It is rare to get a quick-fix solution to debt problems. If that is one of the promises you hear, start looking elsewhere. Remedy: The first thing to understand is that debt-relief programs typically take 24-48 months, so be patient. Second, check up on the whatever company you choose for debt relief. They should be A rated by the Better Business Bureau and have positive user reviews certified by Trust Pilot. They should be a business that’s been around for at least 5 years.

3. Mistake: Trying to dig out of debt alone.

People are reluctant to ask professionals for help dealing with debt. Remedy: Call a credit counseling agency like Accredited Debt Relief and get free help from experts. Accredited Debt Relief credit counselors are trained and certified by their organizations. They can suggest debt-relief solutions like credit consolidation and debt settlement. The credit counselors advise you on creating budgets and recommend a solution that you can take or leave. And, it’s free! Take advantage of that.


When you’re focused on getting out of debt, most folks get caught up in the process and don’t think beyond achieving that goal.  If this happened to you – don’t worry!  It’s happened to almost everyone who’s successfully eliminated large credit card debts.  But the fact is, if you are consistent and committed to paying off your debt, it will happen. So then what? If you don’t have a plan for what to do with your money once your debt is paid off, it can be all too easy to start a cycle of over-spending that will leave you where you started. Here are several things you need to do once your credit card debt is paid off.

Bulk Up Your Emergency Fund

If you haven’t yet started to save for emergencies, you must do it now and deposit as much as you can into that account every month. If you already have an emergency fund, increase your monthly deposit. Why is this so important? It will help you avoid using credit cards to pay for a true financial emergency, such as major vehicle repairs, a new air conditioner, emergency medical bills, or everyday expenses in case of job loss. Remember, you just got out of debt. The last thing you want to do is get blindsided by an emergency and get right back into debt by having to use a credit card to pay for it.

Start Working On Your Retirement Options

The sooner you start saving for retirement the better, but it’s never too late. Look into the retirement savings options offered by your employer along with additional options such as a Roth IRA. If you’re self-employed, look into a SEP IRA, Simple IRA or Individual 401(k). No matter what how you choose to save for retirement, the important thing is to be consistent with your contributions and leave the money alone until you reach retirement age. You already know you have the discipline to pay off debt; apply that same discipline toward saving for your retirement.

Get Your Financial Life In Order

If you’ve managed to pay off all your credit card debt, there’s a good chance you’re already at least somewhat organized, but there’s always room for improvement. Set up as many bills as possible for auto-pay, so you never again have to risk paying late or missing a payment. Get all your financial documents in order and devise a filing system that works for you. Opt out of pre-screened credit card offers to minimize the temptation to overspend, not to mention cut down on annoying junk mail.

Review Your Insurance Coverage

You may have been getting by with bare minimum insurance coverage while working to pay off your debt, but now that you have more money every month, you may want to consider increasing your insurance coverage. For example, if you’ve been meaning to get life insurance but couldn’t afford it, now is the time. If you’re approaching middle age, look into long-term care insurance to add security to your senior years. Of course medical, dental and vehicle insurance coverage are all necessities, too.

Start Saving for a Major Purchase

If part of the motivation for getting out of debt was so you could start saving for a major purchase, such as a home or a new vehicle, it’s time to start making that dream a reality. Establish a savings plan solely dedicated to your goal and contribute to it regularly. You’ll be surprised by how quickly the balance grows.


Let’s say you’ve decided that debt relief is the right choice to help you pay off your debt. As you learn more about the debt relief process, you start wondering how it could affect your credit score. If it could leave a negative impact, should you still use a debt relief service? Here’s what you need to know about debt relief’s effect on your credit score, plus some tips on improving your score in the long run.


A credit score is a statistical number based on your credit history that evaluates your creditworthiness and allows lenders to determine how likely you are to repay debt. Your credit score includes, but is not limited to, things like your payment history, how long you’ve held your accounts, and how much available credit you’re currently using.

Credit scores generally range from 300 to 850 depending on the scoring system you’re using. To a lender, a higher score can indicate that you’re very likely to repay your debt, and a lower score could indicate you’re less likely to pay back what you owe.

Your credit score can play a large role in everyday life, and can effect the following:

  • Getting approved for a credit card or loan
  • Securing a home mortgage
  • Receiving more favorable terms on a loan (ex. a lower interest rate)
  • Renting an apartment and how much of a deposit you’ll pay
  • Opening a cell phone line
  • Setting up utilities


Certain types of debt relief options can affect your credit in both the short and long term, but the impact can often be temporary. Depending on the type of debt relief you choose, your program may show up on your credit report for several years. For many, eliminating debt is more important than a temporary dip in their credit score. Living without crippling debt could actually help you make better financial decisions that improve your credit for the future.


Many debt relief options can help your credit score in the long run. Once you get out of debt, your aim should be to make smart financial decisions to help you avoid falling back into debt. You’ll also probably see a score increase as you decrease the amount of credit you’re using. By continuing to use credit wisely and making your payments on time, chances are you’ll see your credit score improve over time.


Building a good credit score takes time. The two best ways to impr ove your credit are to make your payments on time and to avoid using all of your available credit (ex. not maxing out credit cards). 

Use these strategies to increase your credit score:

  • Pay Bills on Time: Paying your bills in a timely fashion shows lenders you’re reliable. Those who miss payments, or make late payments often, will see that lack of reliability reflected on their credit score.
  • Keep Balances Low: Try to pay down your credit card balances (or lines of credit) to make sure you have plenty of credit available. The amount of credit you’re using versus the amount you have available plays a major factor in your score.
  • Don’t Open New Accounts: Try to avoid taking on new credit. Every time you apply for a new account, there’s a hard inquiry on your credit. Too many hard inquiries in a short time span can have a negative effect on your score.
  • Don’t Close Unused Accounts: Even if you never use your old credit card, it’s a good idea to keep it open. The length of time you’ve had an open account can help increase your score.

Monitor Your Credit: Keep an eye on your credit report for inaccuracies or fraudulent activity. Report anything out of place right away so you’re not paying for someone else’s mistake.

9 Common Myths About How Your Credit Score is Calculated

Under most scoring models, credit scores (also known as a FICO score) range from 300 to 850. The higher the number, the better a person’s credit – it implies that the person is a lower risk to a lender.

The score is calculated using a credit report that gathers data on your current and past debt and whether you pay the debts on time.

Besides determining whether or not you are approved for a loan, your credit score can determine the interest rate you will pay.

Following are many myths that people tend to believe about their scores.

Myth 1: The Credit Bureaus Decide Whether I Get a Loan

The three credit bureaus, Experian, Equifax, and Transunion generate credit reports – but they don’t evaluate your credit score or advise lenders whether to approve or deny a loan. The bureaus simply layout the facts about your credit history – like whether you pay your debts on time. Your actual credit “score” or “rating” is calculated by companies like FICO and VantageScore Solutions, however, these credit bureaus do evaluate your credit risk level based on your credit report.

Myth 2: There’s Only One Type of Credit Score

There are actually many different scores. For example, FICO has several models with varying score ranges that a lender can use. Thus, the FICO score attained by one lender may not be the same score received by another. If a lender declines your application or charges you a higher interest rate because of your score, determine what in your credit history may be negatively impacting your score and work towards resolving those issues. You can request a free copy of your credit report every 12 months from each of the three credit bureaus.

Myth 3: If I Close a Credit Card, its Age is No Longer Factored into My Credit Score

If you’ve got a card that has always been in good standing on your credit report, it might be best to leave it open. As long as the card remains on a credit report, the credit scoring system will continue to see it and still consider the card in the scoring metric—regardless of its age or standing.

Myth 4: A Credit Card Stops Aging the Day I Close it

Even after an account is closed, a credit card will continue to age and will continue to affect your credit score – whether your account was in good standing or not. However, a closed account will not remain on your credit report forever. The credit bureaus will delete them after 10 years if the account was in good standing, and after 7 years if the account had a damaging history.

Myth 5: I Need to Carry Debt to Build Credit

Not necessarily. It’s all about balance. Making minimum payments and maxing out your credit cards is detrimental to your credit score. It’s also a fast-track to needing credit card help. You’re better off having credit cards that are no more than 30% full to show that you can have credit without using it.

Myth 6: Medical Debt is Treated Differently on Credit Reports

Typically, medical bills aren’t reported to a bureau unless the bills are sent to a collection agency. But if the medical bills are reported, credit bureaus treat them the same as other debts. The more recent they are, the more they can affect your credit score.

Myth 7: A Credit Repair Company can only Remove Inaccuracies on My Credit Report

Credit Repair Companies can help provide advice and assistance in reporting inaccurate information on a person’s credit report. If information on a credit report is negative, but accurate, it’ll take at least 7 years to be removed, no matter how good the Credit Repair company is

Myth 8: My (Credit) Utilization Ratio Doesn’t Matter

Simply put, your credit utilization is the percentage of your available credit that you’ve actually borrowed. (For instance, if your credit card has a limit of $1,000 and you have $250 charged on it, your utilization ratio is $250 out of $1,000, or 25%.)

This ration is a very important piece of the credit scoring system and can seriously affect your credit score in a short period of time – for better or worse. The credit score tracking website CreditKarma.com recommends that consumers shouldn’t exceed utilizing 30% of their available credit. If all your cards are maxed out, you should look into how to pay off credit cards immediately.

Myth 9: I Should Avoid Getting Store Credit Cards Because They’ll Hurt My Score

As long as you use a store credit card responsibility, it can help raise your credit limit, improve your utilization rate and boost your overall credit score. In fact, it may be a great way to get a credit card for people who might not qualify for other types of cards.

The Incredible Link Between Debt and Stress

Did you know that your financial struggles could be putting your health at risk? A recent survey conducted by The Harris Poll on behalf of the American Psychological Association revealed that 1 in 5 Americans have either thought about skipping, or have skipped, a visit to the doctor because of financial concerns. Moreover, those who participated in the survey said that they had stressed over money matters within the past month.

Let’s examine how stress is related to debt, and can affect your emotional, physical, and behavioral wellbeing.


Excessive debt can fill the mind with negative emotions. Irritability, moodiness, and the inability to relax are all common side-effects of stress and are all contributing factors to depression. A recent article posted on WebMD found that 73% ofthe subjects surveyed by the American Psychological Association identified money as the main source of stress in their lives. In fact, according to the Federal Reserve’s Survey of Consumer Finances, 3 out of every 4 American families are in debt. In another study from Northwestern Medicine, “high financial debt was associated with higher diastolic pressure and poorer overall general and mental health in young adults.” Clearly, being worried about how to get out of debt or how to pay off credit cards can take its toll.


Worrying about how to get out of debt or how to pay off credit cards can literally make you sick.

There is overwhelming evidence that mind-body balance is an important factor in maintaining one’s physical well-being. A recent study in the Annals of Behavioral Medicine cited that “Those with increasing credit card debt described themselves as having worse physical functioning, worse health and greater helplessness.” Mental health unquestionably affects an individual’s physical health. Nausea, chest pain, hair loss, skin problems, and even dental problems are some of the most common warning signs. If left unchecked, these symptoms can lead to further health complications such as heart disease and high blood pressure.

The need for debt relief can affect anyone. The stress of credit card debt on an individual’s physical wellbeing affects more seasoned adults as well as younger ones. A random study of undergrad and grad students at the University of Minnesota found that those with at least $1,000 in credit card debt were associated with unhealthy risk factors that included overweight/obesity, unhealthy weight control, and violence.


When you experience the mental and physical maladies triggered by stress, your behavior can also drastically change. A study performed at the University of Medicine and Dentistry in New Jersey using the Panel Study of Income Dynamics found that “there is a possibility that non-collateralized debt could cause poorer health behaviors through anxiety and frustration.” Behavioral stress can lead to substance abuse and an inconsistency in one’s appetite or sleep cycle. As a result, he or she may start to interact with people differently and relationships with friends, family and colleagues may be jeopardized. In fact, lack of initiative and irritability can set in, affecting one’s work ethic.

Putting one’s physical and mental well-being at risk because of burdensome debt is not a lifestyle many of us would choose. But by recognizing the signs, you can begin the journey of returning to a healthier place. It’s not easy for some of us to notice, or even admit, that we need help with our debt since we become accustomed to a feeling of despair.

To speak with a consultant at US Debt Relief , to help resolve your debt, call us at 1-888-910-7411.

Know your Rights When Dealing with Debt Collectors

Debt collectors have a reputation—and in some cases, a well-deserved one—for being unpleasant and even threatening when trying to get debtors to pay. Even though the Fair Debt Collection Practices Act (FDCPA) was enacted to limit debt collectors’ behavior and actions, some collectors continue to ignore the law.

Understanding the boundaries of debt collectors will help you to better deal with them. Here are some general guidelines to keep in mind.

False or Misleading Representations

The FDCPA prohibits debt collectors from pretending to work for any government agency, including law enforcement.

A recent documented case involved the sentencing of debt collectors for allegedly accusing people of fraud, stating they would be arrested and face criminal charges for not repaying debts. The collectors also allegedly misrepresented themselves as contract workers for federal and state government agencies, including the Department of Justice and the U.S. Marshals.

Arrest Threats

Federal debt collection law prohibits collectors from falsely claiming you’ve committed a crime or will be arrested if you don’t repay the money they claim you owe. Collection agencies cannot issue arrest warrants or have you put in jail. Failing to repay a legitimate credit card debt, mortgage, car loan or medical bill won’t get you a jail sentence.

However, if you do receive a legitimate court order to appear in court related to a debt you allegedly owe, and don’t show up, the judge could issue a warrant for your arrest. Additionally, if you fail to pay a court fine related to your debt—or refuse to pay taxes or child support—you could go to jail.

Publicizing Your Debt

Debt collectors are not allowed to contact you by postcard, publish the names of debtors who refuse to pay them or talk to anyone other than you, your spouse or your attorney about your debt. Additionally, debt collectors should not try to publicly shame you into paying money that you may or may not owe.

Debt collectors are allowed, however, to contact third parties to try to track you down and ask for your address, home phone number and place of employment – although they’re not generally allowed to contact such people more than once.

Attempting to Collect Debt You Don’t Owe

The Fair Debt Collection Practices Act requires collectors to send you a written notice stating how much you owe within five days after first contacting you, including who they claim you owe and how to make your payment.

In some instances, debt collectors may rely on incorrect information when attempting to collect on an unpaid debt. For example, the agency might be trying to collect a debt from you that was discharged in bankruptcy or that belongs to someone else with an identical or similar name. If you are uncertain about a debt owed, send a letter to the collector via certified mail with a return receipt requesting more information. Meanwhile, do not assume any responsibility for the debt.


Debt collectors cannot:

  • Threaten you with violence or harm
  • Use obscene or profane language
  • Call you repeatedly
  • Call you before 8:00 a.m. or after 9:00 p.m. without your permission
  • Call you at work, if you disallow it in writing
  • Contact you at all—if you tell the collector, in writing, to stop contacting you altogether or to contact only your attorney

Debt collectors may contact you to let you know they will no longer be contacting you, or to inform you that a lawsuit has been filed against you.

And here’s a special note to people wondering how to pay of credit cards or who need credit card help: In-house debt collectors are not subject to the FDCPA. Consequently, if you are delinquent on your Chase credit card bill and Chase calls you directly, they are not required to follow the rules described in the FDCPA. Only when a collection agency or debt buyer is involved does FDCPA apply. Also, if you receive a court summons for a lawsuit regarding your debt, don’t ignore it—it might be legitimate. When in doubt, be sure to check out the court contact information to ensure the summons is real and not a forgery.

The Bottom Line

The Fair Debt Collection Practices Act was enacted to protect your rights as a consumer—so don’t allow a debt collector to ever intimidate or harass you!You can contact one of our Consultants at 1-888-910-8411 to learn more about resolving burdensome credit card debt, debt settlement, debt management and other debt relief programs.

5 Ways to Tell If a Debt Settlement Company is Trustworthy

So, you recognize that you are not making any progress paying down your debt, and you realize it is time to turn to the experts to learn how to get out of debt. After conducting some preliminary research, however, you become aware that there are literally hundreds of companies that claim they will successfully help you settle your debt for less than you owe. If you have examined your options for how to get out of debt, and chosen debt settlement, a new problem comes to the fore: how do you know if a debt settlement company is trustworthy? The majority of debt settlement companies specialize in sales and marketing only and have no idea how to negotiate a settlement. Fortunately, sorting out the companies worth trusting from the companies that are not is simple – if you know what to look for.

  1. Examine Their Fee Structure. It is fairly standard for a company to set their fee as a percentage of the enrolled debt when negotiating with their creditors; it establishes both a fair method of payment and ensures the company works as hard as possible. If they try to charge a fee before they help you, this is a sign to stay away from them.
  2. Pay Attention to Their Tactics. Choosing this route is not something you should just jump into without speaking with somebody at the company. The most respectable debt settlement companies will also want to speak with you, to explain how they work and to determine whether you will be able to meet the sometimes rigorous needs of the plan. If you get on the phone and experience nothing but high-pressure tactics to “enroll” in their plan, do not do business with them.
  3. Look for the Proper Disclosures. An honest company will give you quite a bit of information on their website or in the content they send you. Not only should fees be discussed, but also the length of time until results are typically reached. Knowing specifically how much money you will save, and the nature of the savings account you set up, is fundamental information. For example, that account should be in your name and the company should inform you that you can withdraw money from it at any time. Be certain there is no lack of communication.
  4. Check Their History. Unethical companies, in the modern era, cannot get very far before somebody raises a few objections to their practices. This is especially true for companies offering debt relief programs. While you will need to keep a salt shaker next to your computer while you study a company’s reputation on review sites, often a quick online search can offer up a good overview of how a debt relief company is seen by its customers. Look particularly for news articles about legal action taken against the company; often if the government feels something is wrong with a company this is a sign to cut ties.
  5. Trust Your Instincts. The best way to spot a company you do not trust, however, is simply the fact that you do not trust them. Debt settlement is built on a strong relationship between the debtor and the company negotiating with their creditors. If you do not trust a company, do you really want to spend months or years working with them? Choosing a debt settlement company to help you with your debt can be a complicated process on many levels. But follow these steps, and you will be certain to find one you can trust.

Why US Debt Relief?

Choosing the right partner is the single biggest decision you will make for resolving your outstanding balances. US Debt Relief is one of the nation’s best programs in terms of overall client satisfaction and graduation rates. We truly have a vested interest in seeing our clients graduate the program free of unsecured debt without resorting to bankruptcy. We do not earn anything until we save you money. Additionally, we charge no upfront fees.

We treat every single client with the utmost care, while creating trustworthy, personal relationships. US Debt Relief’s clients have immediate access to their Client Success Representative to answer any questions, concerns or to simply have a shoulder to lean on. We take pride in educating our clients on the causes of debt and how to avoid repeating the steps that led to too much debt in the first place. We understand that honest, hard-working individuals sometimes find themselves in difficult situations. We understand the stress and anxiety that tough financial times can cause, and we are passionate about providing relief.

US Debt Relief’s program allows our clients to become debt free in as short a time period as possible. The settlement process involves extensive knowledge, so that each negotiation reduces a consumer’s balance by as much as possible. Our rigorous, experienced negotiators are known to relentlessly negotiate until the greatest amount of savings is reached. Not only do we provide one of the fastest and least expensive methods of resolving your debts, but we are a trustworthy leader in the industry.

If you or someone you know is having difficulty paying their bills, or wants to learn how to get out of debt, speak to an experienced consultant at 1-888-910-8411

Discover how much money and time US Debt Relief can save you.


Multiple debts lead to multiple accounts, interest rates, and payment due dates. Managing multiple debts can be difficult enough without the added stress of late or missed payments. If you feel like you’re drowning in debt, it may be time to consider debt consolidation.

With debt consolidation, you may be able to reduce or completely eliminate multiple debts. Check out these four signs that it is time to consolidate your debt and start taking control of your finances.


Debt consolidation helps you consolidate multiple payments into one single payment. This can be achieved in a couple of different ways. The two most common ways are by opening a new credit card account or working with a professional debt relief company to consolidate debt.

There are many credit card options that have an introductory 0% interest rate for a balance transfer on new accounts. That means you transfer the debt from your existing credit cards onto the new card and pay nothing in interest for a short period of time. A debt consolidation loan is a personal loan that uses loan funds to pay off your existing debts so you can focus only on paying off the new loan.

It’s important that your new card or loan offers a lower interest rate, reduced payment amount, or some other benefit that makes managing and paying your debt easier. If it doesn’t offer any incentives, you may end up paying more than before you consolidated.

Opening a new credit account like a credit card or debt consolidation loan, however, requires you to open and manage your accounts on your own. If you’re already struggling with making payments on time or managing your debt, a new account may also be difficult to manage. On the other hand, you can work with a debt relief company to negotiate with your creditors on your behalf to lower your payments. You may even be able to settle your debts for less than you originally owed.


Debt consolidation is an excellent debt relief option if you’re in a position to make a financial commitment to paying down your debt. You’ll need to have a steady income that’s high enough to cover your monthly payment in order to make a debt consolidation plan successful. It may also be wise to commit to not taking on new debts during the period you’re paying off your consolidated debts.

Debt consolidation usually lasts about 1-5 years, depending on your consolidation plan. If you use a balance transfer on credit card debt, you will usually only have 12 to 18 months of 0% interest on the new card. Once the introductory offer expires, you’ll be back to paying the large interest rates charged by credit card companies.

If you choose a debt consolidation loan, your total debt may be stretched out over a longer period of time. However, depending on your new loan terms, you may have a higher monthly payment in order to reduce interest.

The best option is usually to enter a debt settlement program with a debt relief company. A debt relief company can negotiate with your creditors for you. The Certified Debt Specialists are available to help you stay on track and build a debt relief plan for you to resolve your debts.

Being mentally able to commit a part of your paycheck to pay off your debts and resisting the urge to take out new debts are signs it is time to consolidate your debt. Perhaps the most difficult part of debt consolidation is having the discipline to create and follow a budget that focuses on paying off your debt. The reward for this determination is usually reduced or eliminated debt, so it’s definitely worth making sacrifices for a few months or years.


Managing several different debt accounts, such as credit cards, medical bills, and personal loans, can be overwhelming. Between having to remember different usernames and passwords for each debt as well as different due dates, it can be easy to miss a payment. Late or missed payments on debt can quickly send your credit score tumbling, further upsetting your financial situation.

With debt consolidation, your multiple accounts, cards, and loans are brought together under one new account. You’ll only have to remember one login, one due date, and one payment amount. Simplifying your debt makes it much easier to manage. You’ll be less likely to miss a payment and more likely to continuously make your payments on time.


Having multiple debts doesn’t always mean you have a poor credit score. If you make your minimum monthly payments, you may have retained a fairly good credit score even as your debt has risen. This good credit can help you consolidate your debt.

Some debt consolidation programs work by opening a new account or taking out a new loan. You’ll likely need to have good credit to be able to qualify for credit cards with 0% introductory offers or good terms on a new loan.

However, you may not have the best credit, and that’s okay. Working with a debt relief company gives you a better chance of finding the right debt consolidation solution. Even if you have good credit, you may want to work with a debt relief company to settle your debts for less than you owe.


When you’re facing multiple debts, and possibly collection calls or other notices to remind you of your debt, it’s easy to feel like you’re under a mountain of debt. By combining all of your debt into one place, you make it easier to start tackling it.

Additionally, debt consolidation has the benefit of a definite end date. If you’re willing to make the financial push to reach that end date, you may be able to eliminate the debts you consolidated. Having an end date to your introductory period, the final payment to your debt consolidation loan, or making a lump sum payment or final payment on your settled debt amount is like having a light at the end of a tunnel.


If you related to any or all of these signs it is time to consolidate your debt, you can get started today. Working with a trustworthy debt relief company like Accredited Debt Relief gives you access to Certified Debt Specialists who can help you create a debt consolidation plan. Find out more about debt consolidation today to see if it’s the right choice for you.


While debt relief programs won’t suddenly erase your debts, they can help you take steps to reduce or eliminate your debt over time. Consider working with a debt relief company to negotiate with creditors on your behalf and potentially get your debt under control.

  • Do you have a large amount of unsecured debts like credit cards or medical bills?
  • Are you only able to make minimum payments due to finances being stretched too thin?
  • Is your debt causing concern, stress, or panic?

A debt relief program may be right for you.


  • The debt relief company works with you to select the right debt relief options for you.
  • A debt relief company may negotiate with your creditors on behalf of you to reduce or eliminate your debt.
  • Consolidate multiple monthly payments down to one single monthly payment.
  • Although debt relief isn’t a magic solution to getting out of debt, it can cut through the chaos of due dates and collections calls.



  • Takes multiple debts and combines them into one loan.
  • Debt consolidation loans work best if you have:
    • Steady income
    • Discipline to not take on more debt
    • Good credit
  • Consolidating debt loans can reduce the stress of multiple payments, due dates, and creditors. You’ll only have to worry about making one payment.


  • Debt settlement can reduce the total amount of money you owe.
  • A special debt settlement account is set up in your name. You’ll make monthly deposits to the account so the funds grow over time.
  • The debt settlement company negotiates with your creditors to reach a legal agreement to settle your debts.
  • Debt settlement is the preferred option for many people who are not qualified for additional financing products.


  • Typically, credit counseling is a free resource provided by nonprofit financial education organization.
  • A credit counselor will work with you to help you improve your individual financial situation.
  • They may offer tools and resources to help you gain control over your money.
  • You may have fees reduced, but credit counseling doesn’t usually reduce the total amount of debt you owe.


  • Used only if no other debt relief plan is possible.
  • In rare cases, bankruptcy may completely remove your debts. However, there are high legal and court fee costs to bankruptcy so you will likely still need to pay a hefty sum.
  • Bankruptcy can stay on your credit history for up to a decade and make it difficult to get approved for mortgages, car loans, and other credit accounts for years to come.
  • Many bankruptcies end with a creditor recouping some of the money you owe by liquidating your assets.

Debt Settlement Explained – Choosing The Right Path (Making the right financial choices to stay debt free)

You may think that once your debt relief strategy is implemented, the picture is complete. However, your plan is really just the beginning, the foundation of a continuing path. One of life’s ongoing challenges is developing effective financial strategies that will guide you in the right direction. Each stage of your life can create new financial challenges. No matter how much money you make, the earlier and more completely you master the finances in your life, the more likely you are to achieve what everyone wants—a financially comfortable today and a financially secure tomorrow. It is important to consider the steps that could lead you on the right or wrong path.

The Right Path

Assessing what you owe

Start by making a list of all your debts. Break them down into short-term (e.g., credit cards), intermediate-term (e.g., car/student loans), and long-term (e.g., mortgage) debt. Put longterm debt at the top of your list and short-term debt at the bottom. By categorizing what you owe, you’ve quickly identified your current financial situation – laying the groundwork for how to get out of debt.

Begin thinking more cost-effectively

Our own mind works against us when it comes to savings and budgeting. Psychologists have shown that we have, at best, a vague sense of what is in our account, and the wide availability of credit and debit cards have made it easier to spend ourselves into a hole.

If you lay out your budget you will have what you spend, and where you spend it, at the forefront of your mind. Instead of aimlessly slapping down your credit card, you will carefully consider the longterm effects before moving forward with a purchase. Sacrificing short term pleasure for long term happiness is a critical step.

Slashing your credit card balances

Concentrate on the short-term debt at the bottom of your list first. It is important to pay off higher interest rate, short-term debt as soon as you can (e.g., credit cards) because the interest that accumulates by stretching out payments over time can make “bargain” purchases cost a lot more. For example, say you have a credit card with a 17.9% finance charge and your balance is $1,000. Making a minimum payment of $20 per month for the next year will only reduce your balance by $66.26. That means you would be paying $240 in exchange for a $66 reduction in your debt. So, when you make only minimum monthly payments, you are throwing money away. Remember this bit of credit card help: the money you save by paying off high-interest credit cards could be used to build your nest egg.

Understanding your spending habits

At times, financial problems may remain unseen until a monthly budget exposes them. Interpreting your income and expenses on a monthly basis is the first step towards meeting your long-term financial goals. How often do you look at your overall spending? By assessing your spending patterns, you will become more aware of where and when to hold back. You may be surprised to find that little indulgences, such as buying a daily coffee or going out to dinner, accumulate substantially and could cause a debt snowball. A budget can encourage you to conserve your money, and spend it more wisely.

Finding ways to save

Faced with income constraints and competing demands for money, many people simply spend what they must on necessities, saving whatever happens to be left over. You need to have a cushion to be financially secure. While experts recommend saving eight months’ salary to protect you from an emergency, most agree that paying off your credit cards takes precedence to avoid costly interest. By creating a budget, you will be able to control your money so that you contribute at least ten percent of each paycheck to savings.

The Wrong Path

Going off-budget

Without an accurate depiction of what is coming into and going out of your wallet, you can easily rely on credit cards and loans to eat and pay your bills. Whether you’re working on a debt settlement plan, chipping away at your debt yourself, or working on a debt management scheme, your budget is often your guiding light. If you are prone to impulse spending, or tend to be an emotional shopper, practice buying only those items you need rather than want in the moment. One method is to delay your purchases for 24 hours. Often, an impulse will pass once you’ve had a chance to sleep on it. Debt management and spending behavior adjustments may brighten your financial outlook, so you can save more to reach your future goals.

Ignoring interest rates

When chipping away at your debt, many of us just look at the overall balances. But that’s not nearly as important as looking at how much you pay, every month, to hold that debt. For example, if you have $10,000 in student loans at 3% interest, you’re not going to pay nearly as much on that as if you have $5,000 at 20% interest on your credit cards. While both debts need to be paid off, longterm it’s the debt with the highest interest that will cost you the most money.

Being unrealistic

It would be nice if we could take immediate and drastic action when we realize our debt is a problem, but it’s rare that we’re in a situation where we’re the only one affected by our finances. The needs of children and other dependents, for example, can weigh surprisingly heavily on your budget if you don’t think ahead about paying for them. Be realistic in your budget, and leave a little flexibility to ensure that surprises don’t set you back.

Missing payments

The Internet is both a blessing and a curse for those of us working on debt management. Before Internet payments and online billing, you had to write a check for your payment and run it down to the mailbox immediately after getting your bill. Now, paying is simply a matter of clicking on a few pages… but it also means you have absolutely no excuse. You can’t argue the check’s in the mail when you’re sending the check via cyberspace. So, set up reminders, arrange automatic deductions, do what needs to be done, but don’t let a late fee get dumped on top of your pile of debt.

To secure your future, you must alter the present. By planning early, you can gain a better understanding of what challenges lie ahead and what options exist to guide you on the right path. Spend some time looking at your past as you work towards your debt free future. If you see yourself heading down this road of financial ruin, you may want to consider getting some help now, before your options disappear. The choice is in your hands.