How a Debt Management Company Can Help During an Economic Crisis
As we all deal with the effects of the COVID-19 pandemic, many people are feeling the punch in their bank accounts. We see the unemployment rate continues to skyrocket, and many families are left with tough choices as to how they’re going to pay for basic expenses like food and shelter. Others may be dealing with mounting medical expenses. Whatever bills may be adding up, people may be turning to loans and credit cards to cover their expenses. But, when you can’t make the monthly payments, you may end up in more economic trouble. That’s where a debt management company can help.
How Can a Debt Management Company Help People Right Now?
A recent study found that just about one-third of all Americans have enough money in their savings accounts to cover three months of expenses. How are the other two-thirds of Americans paying for their expenses? If you fall into this group, debt settlement may be an option for you.
Debt settlement aims to reduce the overall debt balances rather than just reducing the interest rate or payments to creditors. When people are facing a large amount of debt, debt settlement is a viable option because debts can be settled for about half of what is owed in certain situations. This can allow people to help figure out a solution.
What Types of Debt are Covered Under Debt Settlement?
It’s important to know that debt settlement cannot help with all of your debt. Unsecured debt is only included in debt settlement arrangements. This includes:
- Credit cards
- Personal loans
- Medical bills
- Collection accounts
Mortgages, car loans, IRS tax debts, payday loans, and student loans are not qualified debts to include.
How Does Debt Settlement Work?
If you are considering debt settlement as an option right now, debt management companies, like UmbrellaDEBT Relief can help because they can negotiate a settlement with many credit card companies on your behalf. This can often lower the amount owed as well as the number of payments due to the relationships they have established. The amounts they can negotiate are usually much less than you could have tried to negotiate by yourself.
You should note that shorter-term debt settlement programs can last 36 months and are often more successful than longer programs at 48 months or greater.
Why Do People Opt for Debt Settlement?
One of the major reasons why people opt for debt settlement is because it can help them to avoid bankruptcy. Filing for bankruptcy can greatly damage your credit report as bankruptcy-related accounts can stay on your credit report for 7 to 10 years in some cases. Once your debt is paid off under a debt settlement plan, you can work to reestablish and acquire new credit.
Let Umbrella Debt Relief Help
UmbrellaDEBT Relief can help if you are experiencing financial instability during this time. Besides debt settlement, our experts can advise you about other debt-relief options that may be available to you.
Call UmbrellaDEBT Relief today to find out how a debt management company can help you stay as financially stable as possible during these difficult times.