Consumers are usually feeling stressed about their debt and are in need of the structured payment scheme that debt relief programs provide.
Los Angeles-Long Beach, CA (PRWEB) March 07, 2014
National Debt Relief, the leading debt settlement company in the country published an article that revealed the 10 common myths that consumers have about debt relief programs. The article titled “10 Myths About Debt Relief Programs You Need To Correct” was published last March 5, 2014 and it sought to correct the wrong impressions of consumers about debt solutions.
The article revealed how consumers are usually feeling stressed about their debt and are in need of the structured payment scheme that debt relief programs provide. Fortunately for consumers, there are many debt solutions that they can choose from. According to the article, the challenge lies in choosing the right program that is perfect for their unique debt situation.
With that, National Debt Relief provided the 10 myths about debt relief programs that consumers need to correct.
1. Credit counseling is the same as debt management. On the contrary, the latter is a part of the former. But they are not exactly the same.
2. Debt management can effectively lower a credit balance. This is also not true. What it can do is restructure the payment plan to be longer so the consumer can make lower monthly contributions. The article explained that the consumer will still pay the total debt amount in the long run.
3. Debt consolidation loan can save the consumer on interest. In most cases, the consumer will target a low interest on the loan that they will get to pay off their multiple debts. But since the loan is over a longer payment period, it oftentimes cost them more on interest amount.
4. Debt consolidation loan requires a collateral. The article mentioned that a collateral is needed to get a low interest loan but a good credit score can also provide that.
5. Debt experts can provide better results. There is truth in this but it is not a guarantee. The consumer can also do what the debt professionals can.
6. Debt consolidation is the same as debt settlement. The article explained that these two are different because the former is about combining debts while the latter involves debt reduction.
7. Debt settlement can get consumers out of debt fast. This is not guaranteed because it depends on the creditor whether they will accept the settlement proposal or not.
8. Debt settlement is a better option than bankruptcy. Most experts, according to the article, will encourage consumers to aim for the former because of the credit score effect of the latter. But there are cases when consumers are in a grave financial crisis that their best option is only bankruptcy.
9. Bankruptcy will not require consumers to pay their debts. The article explained that this is true for Chapter 7. But if the consumer qualifies for a Chapter 13 bankruptcy, that means they will be asked to go through a repayment plan before a portion of the debt is discharged.
10. Bankruptcy will ruin the financial future of the consumer. The bankruptcy taint will remain in the credit report of the consumer but it will not stay there forever. It can get better over time especially if the consumer displays better credit management.
To read the whole explanation for each of the myths, click on this link: http://www.nationaldebtrelief.com/10-myths-debt-relief-programs-need-correct/.
Visit the website of National Debt Relief to find out more information about debt and financial management. Their website is filled with hundreds of articles that can help consumers who want to improve their financial literacy.