No matter what other people or even the media says, if you feel you need help with managing your debts, no one has the right to stop you from asking for help. No one understands your spending habits and the state of your finances better than you. So if you wish to enroll in a debt relief program, don't feel guilty or foolish about it.
There are two choices you have to make when in search of debt relief: which company to work with and which debt relief program to enroll in.
Choosing the Right Debt Relief Company
Never do business with a debt relief company that's less than one year old. The rules in the debt management industry are ever-changing and becoming more stringent every year. You need to work with a company that already knows its way in the world, and has built a solid network of contacts and a credible reputation.
Always check with the Better Business Bureau and other similar institutions to know the present status and rating of the company. If possible, transact only with a company that has successfully aided an individual you personally know and trust.
Choosing the Right Debt Relief Program
There are, strictly speaking, only two types of debt relief programs you can choose from: debt consolidation and debt settlement.
Debt Consolidation – With this type of debt relief program, all your loans are merged into just one loan. You're then only required by the company to make one payment every month for all of your loans. Because debts are less troublesome and easier to manage that way, debt consolidation loans have also become known as debt management loans. If the stress of being in constant contact with your creditors is your most pressing worry, this type of debt relief program is the optimal solution for you.
Debt Settlement – This is trickier than its twin. Also known as debt negotiation and credit counseling, debt settlements require the debt relief company to work for an acceptable compromise between debtors – that's you – and creditors (your so-called enemies). If you have a very large amount of debt, a debt settlement represents the wise choice because it significantly reduces the amount of your debt through lower rates and elimination of late fees and other similar charges.
In the end, both types of debt relief programs have their own pros and cons. The right choice will depend on your personal characteristics – are you easily pressured? – and how indebted you are at the moment.