Who Should Be Helping You Get Out of Debt?

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What every consumer should know about overcoming a cash crisis

There’s been a dramatic reversal in spending behavior. People are borrowing more money and not paying down their debts. In the second quarter of 2015, there was a $28 billion increase in credit card debt. That’s a 66 percent increase over the same period last year. “What this means,” cautions National Debt Relief Consumer Advocate Adam Tijerina, “is that a lot of people may soon need help climbing out of debt.” He adds that should that happen to you, getting the right kind of help can make the difference between restoring your credit and falling further behind in your bills.

Financial hardships can strike anyone at any time. “Your work hours get reduced or you get laid off. Maybe you get divorced. Or, you may be making great progress on interest charges until medical expenses derail your efforts,” Tijerina explains.

How to avoid financial trap doors

Tijerina says having a clear head is essential when money emergencies come your way. “The stress of the situation can be overwhelming. You need to be able to calmly and rationally look at the problem, and evaluate the solutions. Many people make the mistake of turning to plastic for relief. Resist doing that. You will only be transferring your problems from one pocket to the other.”

If you’re already over your head with credit card bills, medical expenses or payday loans, don’t panic. Tijerina outlines some common myths and how to avoid them.

Myth: Seeking help from a debt negotiation company will harm your credit score. “If you’re already falling behind on your bills, your credit score is already taking a hit,” says Tijerina. “Working with a debt negotiation service won’t be as severe a hit as filing for bankruptcy. With National Debt Relief’s plan, the effect on your credit will be temporary. Once we negotiate with your creditors to resolve your debt for a fraction of what you owe, you’ll be out of debt and able to work on restoring your credit.”

Myth: Debt consolidation loans are a smart option, especially for higher amounts of debt. “You can’t borrow your way out of debt,” cautions Tijerina. “You’re just replacing several smaller debts with one big one. Also, you usually need excellent credit for a debt consolidation loan.”

Myth: A home equity loan is superior to using a debt negotiation service. “Be careful! When you transfer your debt to a home equity loan, your debt goes from unsecured to secured. If you continue to fall behind in your payments, you risk losing your home because of your credit card debt.”

Myth : Debt negotiation services require money up front. “That’s only true of those that are fraudulent. Doing so is against Federal Trade Commission regulations,” comments Tijerina. “National Debt Relief is a performance-based service and charges no upfront fees. We get paid only when a settlement agreement is reached with your creditors to resolve your debt.”  

Questions to ask before signing on with a debt negotiation service

Tijerina says demand for debt relief is highest in January and February, as holiday bills start to arrive, consumers start to consider what they’ll owe the IRS, or people have made New Year’s resolutions to finally fix their financial situations. “First do your research online by checking such websites as RipOffReport.com, TopTenReviews.com and TopConsumerReviews.com. Also, look for real reviews posted about the company on major review websites such as TrustPilot.com. Then be prepared to ask a lot of questions,” he advises. He recommends starting the discussion by asking the following:

Is debt relief the right solution based on my debt and income? “Sometimes it’s not the best option. For people whose incomes are severely limited, for example, sometimes bankruptcy is a better alternative.”

Is your company reputable and accredited? If so, with which agencies?  “Customer service, and good working relationships with creditors, is essential. National Debt Relief is the only debt negotiation company accredited by the Better Business Bureau, the American Fair Credit Council and the International Association of Professional Debt Arbitrators. We also have top ratings from Top Consumer Reviews and Top Ten Reviews.”

How long does it take and what should I expect to pay? “You have to commit to the program, which means sticking with rigid payment deadlines. Make sure you can afford that monthly payment.”

How much will you reduce my debt? “Beware of companies that make huge promises, such as reducing your debt by 75 percent. While each situation is different, our average is around a more realistic about half of what you owe.”  

How will you help me stay out of bad financial situations in the future? “Look for a service that has your best interests in mind for the long term. We have more than 1,000 helpful personal finance articles on our website that will help you improve your financial literacy and stay out of debt. We also have a free budget planner worksheet, and our clients have free access to educational e-books such as one called, “101 Ways to Raise Emergency Cash.”  

Debt negotiation services can be a useful tool for helping you get out of a bad, stressful situation. “While it is possible to do this yourself, most people don’t want to have to hassle with contacting their creditors every couple of weeks,” says Tijerina. “National Debt Relief has been in business since 2009. Each year, we help more than 36,000 consumers resolve their debt issues so that they once again relax and focus on living a more stress-free life.”

Adam Tijerina is a consumer advocate for the little guy and gal out there struggling with money, finances and debt. He has been featured on Credit.com as a personal finance expert and currently works for National Debt Relief, a top rated debt relief company accredited by the BBB. Tijerina holds a business degree from Trinity University, San Antonio, Tex. He is a married father of 17-year-old boy/girl twins with a new baby on the way.