Debt Management

Debt Relief Frequently Asked Questions

Debt relief can also mean stress relief for people who are struggling to pay all their bills. Get answers to your most pressing questions about debt relief.
A woman works on her finances using a calculator and holding a bill.
By Kenya McCullum
Updated on: February 7th, 2022

Debt relief sounds great. Who wouldn’t want relief from debt? But if you’re in deep debt and are having trouble making ends meet, debt relief isn’t a want. It’s a need. Get answers to your most pressing debt relief questions and learn how to get help.

Who Qualifies for a Debt Relief Program?

Who qualifies for a debt relief program depends on the criteria determined by the specific program consumers choose. However, there are some general qualifications that you will be expected to meet.

First and foremost, you must be in a position to make monthly payments to the debt relief program, which should be less than the combined monthly amount you are currently paying your creditors.

In addition, you will be required to have a minimum amount of debt to qualify for some programs. This could be anywhere from $5,000 to $10,000. Also, the debt you want to include in your debt relief plan should be unsecured, such as credit card, utilities, medical, and private student loan bills.

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Is Debt Relief a Good Choice?

Debt relief can be a great choice if you are struggling to pay numerous creditors and you need some help.

Since a debt relief plan can lead you to make lower payments and have a lower interest rate, it is worth considering this option. This can be especially helpful for people who have had financial difficulties that have made it impossible for them to pay their debt in a reasonable amount of time — which is generally considered about five years.

Also, if you have debts that exceed more than half of your yearly income, debt relief is a good choice for you to alleviate this burden and get your finances under control.

Depending on the debt relief program you choose, you may also be able to learn strategies that will help you make better decisions in the future. In some cases, these programs give their customers tips and tricks they can use, which will go a long way toward adopting healthy financial habits for the rest of their lives.

What Are the Disadvantages of Debt Relief?

Although debt relief can be helpful for many people who are struggling to pay back their debts, it may not be the right choice for everyone as there are some disadvantages to pursuing this avenue of handling finances.

For example, this option may not be the best choice for those who have lost their job because they may not be in the position to make regular payments.

Debt relief plans require that payments are made each month and if they are not, you can be removed from the program and find yourself back at square one.

Also, the amount of your debt may make this kind of agreement a bad option. The point of choosing a debt relief program is to help alleviate your burden, however, if you have too much debt, the program may not help because the monthly payments may be too large to handle.

It’s important to keep in mind that when you enter a debt relief plan, depending on the organization you work with, you may be charged fees that are comparable to what your creditors are already charging you.

The point of getting into these agreements is to help cut costs, so it’s important to look around for the best plan for you and understand the terms before entering into this kind of arrangement.

What Debt Relief Company Is the Best?

In addition to understanding if a debt relief option is right for you, you should also research what debt relief company is the best to choose to meet your needs.

In order to find the right company, you should look for one that handles the type of debt you have, because not all companies handle all debts. Also, research the types of fees that companies charge and when you are required to pay them, as some companies do charge fees upfront.

The amount of time that a company has been in business and its reputation are also important factors to look at so you can enter a debt relief plan with confidence. Be sure to look for reviews of the company and find out if there are any complaints against it with the Better Business Bureau.