How to sign up for debt relief
About 56 million Americans have been in credit card debt for at least a year, according to recent statistics, and some of them are likely struggling to make their minimum payments each month. If you're one of the people who's finding it difficult to make your credit card minimum payments, you may be looking for fast ways to get out of debt.
The good news is that debt relief programs can help. These services can negotiate with your lenders to reduce your interest rates or principal balances, making it easier for you to get out of debt in a reasonable amount of time.
But if you've never worked with a debt relief company, you may be wondering how to sign up. Here's what to know.
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How to sign up for debt relief
If you plan to sign up for debt relief, you will typically follow these steps:
Step #1: Get prepared
It can help to get prepared before signing up for a debt relief service. Here's how to do that:
- Assess your debts: Know how much money you owe, your interest rates and your monthly minimum payments. These figures may come in handy as you work with a debt relief professional.
- Determine your budget: You'll work with the debt relief professional to create an affordable payment plan, and it's important to know how much you can comfortably afford to pay toward your debts each month.
- Prepare your documents: Be sure to have your credit card statements, a state-issued ID and your bank account information on hand.
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Step #2: Contact a debt relief service
Compare your debt relief service options and then reach out to a debt relief service provider to get started. As you compare providers, it may be helpful to consider the types of debt relief they provide, the fees they charge and the timeline for when you may be able to get out of debt with their service. There are numerous options to choose from, including well-known providers like Freedom Debt Relief, National Debt Relief and Accredited Debt Relief.
Step #3: Work with the service on a payment plan
A debt relief expert will typically ask questions about your debt, your budget and your financial goals. One reason they ask these questions is to work with you to create a payment plan that's effective for paying off your debt but also affordable for your financial situation. So, work with your debt relief professional to develop a payment plan that works for you.
Step #4: Enroll in the service
Once your debt relief consultation is complete, you'll know what the program requires you to pay per month and how long it will take for you to achieve the payoff goals. If you're happy with the plan, read and sign the documents to enroll in the service.
Step #5: Follow the plan
Make sure to follow the debt relief plan created for you or there could be consequences. For example, with debt management programs, the debt relief company will try to negotiate better interest and payment terms with your creditors on your behalf.
However, that may mean that if you miss a payment, your account could revert to your standard interest rate and payment terms. So, be sure to make your payments on time or contact your debt relief provider as soon as you know you'll miss a payment.
Tips for staying debt-free after using a debt relief service
You'll be out of debt after you make all of your payments as agreed. However, achieving debt freedom is only the first step. Here are some tips to help you stay debt-free for the long haul:
- Limit your credit card use: It's OK to use credit cards to earn rewards, for budgeting purposes or for other uses. However, you should only use credit cards if you can afford to pay off the purchases you make in full each month.
- Keep an eye on your spending: Monitor your spending habits and cut out any frivolous spending.
- Create a budget: Create a budget and stick to it to avoid mounting debt.
The bottom line
Debt relief services have helped other borrowers escape the revolving debt trap, and they may be able to do the same for you. If you're ready to enroll in one, the steps above may help expedite the process and ensure that you're getting the most out of what the service offers to you.
