Credit card debt relief is undeniably one of the most powerful and empowering tools but only when used responsibly. It’s often misunderstood by people because misinformation regarding such financial strategies often spreads quickly. Such false narratives regarding credit card debt relief often leave people confused and overwhelmed and they feel afraid to seek help or guidance. The truth is that such a crucial financial decision can literally put an end to your debt-cycle if you approach it strategically.
Today, we are going to break down 5 of the most common myths regarding debt relief. After debunking these myths, you might find that legitimate credit card debt relief is more accessible than you thought.
Myth No.1 – Debt Relief And Bankruptcy Are The Same
Many people think that bankruptcy and debt relief are the same but the truth is that both are entirely different processes.
The Reality: Debt relief consists of a range of different strategies that are specifically designed to make debt more manageable. Debt consolidation, debt settlement, debt management plan and even lower interest rates, all these strategies are known as debt relief strategies. Bankruptcy is also considered a debt relief strategy but it’s usually considered as the last resort.
Why Does It Matter?
People who believe bankruptcy and debt relief are the same, it can prevent them from seeking help when they need it the most. Debt settlement, consolidation and DMP are simpler, easier and less complicated solutions when you want to put an end to your debt. When people understand the distinction between the two processes, it empowers them to try customized plans instead of worrying about the worst outcomes.
Myth No.2 – Debt Relief Will Destroy Your Credit Permanently
One common misconception is about credit damage — learn the real impact of debt relief on your credit score. People often avoid seeking help because they fear permanent credit damage.
The Reality: Each debt relief strategy comes with a different impact on your credit score but none of them actually “damage” your credit permanently. Here’s a breakdown to make it simpler for you;
- Debt Consolidation: You’ll experience a slight dip in your credit score due to closure of accounts and a new loan but over time you can improve the score by making timely payments.
- Debt Settlement: It can temporarily damage your score but as you start making timely payments and resolve your debts, you’ll see a gradual increase in your credit score.
- Debt Management Plan: Using credit counseling services might appear on your report but it won’t damage your credit score.
- Bankruptcy: It’ll severely damage your credit score and will stay on your report for 10 years but it’ll give you a fresh start and you’ll be able to build a strong credit profile from scratch.
Why Does This Matter?
No matter what it is, you can always take measures to build your credit score back. On the other hand, if you address your debt strategically, it can help you regain control over your finances and lead you to a financially stable future.
Myth No.3 – People Who Aren’t Responsible Enough Need Debt Relief
Embarrassment and guilt often prevent people from seeking professional help and guidance.
The Reality: People who seek debt relief aren’t irresponsible, in fact, it can happen to anyone and anyone can face such real-life challenges that lead them into debt.
- Loss of job
- Medical emergency
- Divorce or separation
- Family responsibilities
- Unexpected expenses
Debt relief is nowhere near a financial failure, in fact, it’s just another financial tool that people use to get out of debt for a stable financial future. It’s a one wise step you can take to regain control over your finances.
Why Does This Matter?
It is of utmost importance to remove this stigma and help people feel more comfortable so that they can make the right choices to reduce financial strain.
Myth No.4 – Debt Relief Programs Are A Scam
A few fraud and scam stories spread misinformation and fear among people and they start doubting the entire debt relief industry.
The Reality: It’s a fact that scams do exist in almost all financial industries and debt relief is no different. However, putting a false label on the entire industry isn’t correct either. There are some legitimate and regulated debt relief providers out there that really do help people going through a financial strain.
The reputable organizations are always;
- Certified and accredited
- They don’t charge any fee upfront
- They provide written agreements
- They provide free consultation to help you understand whether debt relief suits you or not
- They won’t pressure you into signing up
- They won’t make any false claims or promises that sound “too good to be true”.
Why Does This Matter?
In order to end up with a legitimate and trustworthy debt relief service provider, you should do proper research. Even if you are in a rush, take your time and make your decision carefully especially if you don’t want to get scammed. Debt relief is a serious financial decision and you must seek help from a trustworthy provider. If you are still in doubt then learn if debt relief is right for you with our self-assessment guide.
Myth No.5 – It Is Better To Handle Debt All By Yourself Instead Of Seeking Professional Help.
People believe that it’s better to deal with debt alone instead of seeking professional help. They think that involving a third party means they’ll lose control over their financial situation.
The Reality: Debt relief doesn’t mean you lose control over your finances, in fact, it’s the opposite. Seeking professional help at such a crucial stage can turn the tables for you and help you break your debt-cycle.
With the help of a professional program, you’ll be able to;
- Negotiate and get lower interest rates
- Get your repayment plans restructured
- Reduce your stress and confusion
- Get expert financial counseling
- Consolidate your debts
Dealing with debt alone can wreak havoc on your mental well-being especially if you are already going through a tough financial situation. Not seeking help when you need it the most can lead to missed payments, legal actions and even emotional burn-out. Adding assistance during such a tough time won’t remove your responsibilities, in fact, it’ll support it.
Why Does This Matter?
When you seek help early, it can prevent your debt-situation from getting worse and you might as well become financially stable, sooner than you thought. If these myths have held you back, see whether debt relief is actually right for you.
Final Thoughts
It’s quite easy for a layman to misunderstand credit card debt relief. Such myths and misinformation can create panic and fear among people, preventing them from taking the right step at the right time. It is of utmost importance to first study and understand what debt relief is, so that you can make a more confident and informed decision whether it’s right for you or not.
It’s a fact that debt relief isn’t for everyone but that doesn’t make it a wrong choice if your financial picture does require you to take such a step. Before you take any such crucial decisions, it’s highly recommended to consult a professional credit counselor first. Especially if you are dealing with an overwhelming amount of debt and your financial situation is getting worse every day then you must seek help. A credit counseling agency can help determine whether debt relief is suitable for your financial situation or not.
To learn more about honest and effective strategies, visit our main page on credit card debt relief.
FAQs
Q1. What Exactly Is Credit Card Debt Relief?
Credit card debt relief is all about strategies that help people make debt more manageable. From reducing interest rates to consolidating debts and enrolling in hardship programs, each such strategy you use to reduce or eliminate your debt is known as credit card debt relief. In simpler words, it isn’t a single solution, in fact, it is a broad term and the right option depends solely on your financial picture.
Q2. Is It Possible To Negotiate With A Creditor On My Own?
Yes, you can negotiate with your creditor on your own but only if you are confident that the outcome would be positive. It’s highly recommended to seek help from a professional debt settlement agency in such a situation because with their expertise and experience, you can expect better results.
Q3. Is It Possible To Rebuild Credit After Completing A Debt Relief Program?
Yes, it’s possible to rebuild your credit profile and increase your credit score after completing a debt relief program. There are certain measures you’d have to take, including; making timely payments, keeping your credit utilization ratio low, avoiding new debt and practicing financial discipline.
Seeking professional guidance regarding which debt relief option is best suitable for you? Try Mountains Debt Relief now for the best plan on how to become debt-free.