Getting Out of Debt Fast

Get Out of Debt


You're Broke


Turn Bad Debt Into Good

Debt Assistance

A debt assistancecompany could help you if you're spending a lot of your time ducking debt collectors and using one credit card to pay off the debt on another card. Debt assistance companies advertise they can work with your creditors to slash the interest rate you are paying, reduce your overall debts and also help establish a debt management plan for you.

Here's how the debt assistance company can help you out:

Help with creating and sticking to a budget.

One-on-one credit counseling and advice on how to manage your debt.

Negotiate and enroll you in a debt management plan that has been approved by your creditors. The debt management plan will require you to deposit an agreed amount with the debt assistance company and they will use those funds to send payments to the individual creditors.

Creditors are more willing to waive late fees, renegotiate the terms of the debt and reduce interest rates if they are working with a reputable debt assistance company because they know they will be receiving monthly payments of time.

It usually takes somewhere between three to six years for most people who are in a debt management plan to pay off their debts. A reputable debt assistance company will continue to provide ongoing budget counseling and educational materials about managing debt. As your debts get repaid, your credit score will improve.

Beware! Some debt assistance companies take advantage of people who are desperate for help. They will take your monthly payments and not repay the creditors as they had agreed to do. Following are two warning signs that you are not dealing with a reputable credit assistance company:

They promise to clean up your credit report. This is illegal - skipped or late payments will stay on your credit report up to seven years. The only way to improve your credit rating is time and a steady pattern of repayment.

They charge a huge monthly fee or might even demand a portion of your savings. Nonprofit debt assistance companies will help you for a very small fee or for free. These companies receive government grants and have fund-raising activities that help pay their cost.

Make sure you check with the Better Business Bureau and your state Attorney General before you sign on with a debt assistance company.