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I recently came across an article promoting a way to deal with debt called debt reduction. The article defined it as “a unique debt relief approach.” It was said that it would reduce the amount of debt you’re obligated to pay and would speed up the time it would take you to get out of debt. The article went on to say that you could do this through a professional debt reduction company or you could do it on your own.
The types of debt that can be reduced
What types of debt can be reduced? The article listed these as types of debt that can be reduced.
1. Credit Card Debts
2. Online Payday Loans
3. Storefront Payday Loans
4. Medical Bills
5. Car Loan Repossessed and Sold
6. Accounts in Collection
7. Unsecured Line of Credit
How debt reduction works
According to this article, debt reduction is a six-step program that begins with contacting a debt reduction company. Step two is to fax the company your most recent statements, including your creditor’s names, your current balances and a short history of your account activity. The next step or step three is when the debt reduction company assesses your overall finances, your debts and your interest rates.
A person called a “debt arbiter” will then discuss the program and help you decide whether or not debt reduction would be your best option. If you’re convinced that it could help, step four is when the debt arbitrator sends you a written agreement. If you sign this agreement, the debt reduction company next opens a trust account where you will be required to deposit at least one half of your total outstanding debts.
Finally, step six is when the money is in your trust account, the debt arbitrator will contact your creditors and attempt to settle your debts. If they accept the settlement offers, the debt reduction company will create a formal contract. All involved parties will be required to sign the contract. The debt arbitrator will then settle the debts with lump sum payments. They will paid with money that’s taken out of funds in the trust account. The creditors will report your debts as “paid as agreed” or “paid as settled” on your credit reports.
What are the benefits of debt reduction?
The advantages of a debt reduction program are that they will relieve you from the anxiety and stress associated with having to deal with a big load of debt. It will reduce the number of collection calls you receive and will provide you with affordable payments.
How is debt reduction different from debt settlement
The truth is that debt reduction is basically the same as debt settlement, which is what we do. The fact that you are on our website means you have eliminated step one. You are already in touch with a debt arbitrator or debt counselor. If you feel that you could benefit from debt reduction or debt settlement, all you have to do is call us or tell us the amount of your debt using the form on this page. We will explain debt settlement and why it might or might not be your best option. If we agree that debt settlement could help, you will need to fax us information about the names of your creditors, your balances and, if possible, a copy of your credit report. This will put you well on your way towards getting your debts settled and becoming debt free in 24 to 48 months.
And the winner is …
In the question of debt reduction versus debt settlement, the winner is … you. Debt reduction and debt settlement are basically the same program and one that can save you thousands of dollars and help you pay off all your debts.
