Most of the time, you may opt for credit to cover your financial needs whenever you don’t have the money upfront. However, without proper financial planning and debt management, it’s easy to fall into a situation in which you’re unable to cover your debt comfortably. One option for this is seeking the services of a debt relief company. With this in mind, let’s take a look at how Accredited Debt Relief works.
Accredited Debt Relief: The Meaning
Accredited Debt Relief is a debt settlement program. The company negotiates with your creditors with the goal of renegotiating your payment agreements to get them to settle for less than the total amount of debt you owe.
How Does it Work?
The Accredited Debt Relief process is very straightforward. After a consultation to assess your situation — and it’s determined you’re a viable settlement candidate — the company will begin discussing debt reduction settlements with creditors on your behalf. You’ll then cease making payments directly to them and instead deposit the cash in an escrow account under your name (with the credit relief company.) When you have enough money in the account, the company will oversee the clearance of your debts.
The program can run from 12 months to 48 months, depending upon how quickly you can build up your settlement fund and the amounts you owe. You don’t pay an upfront fee for the service. However, such companies usually require that you pay between 15-25% of the debt you enroll, once they are settled.
What are the Qualifications?
You will be eligible for the accredited debt relief settlement program if:
- Your debt is at or above $10,000. That’s the minimum amount you can enroll.
- You’re facing financial hardships. If you’re unable to meet basic requirements for your living expenses such as food and housing payments, the Accredited Debt Relief program will help you stabilize your debt and ultimately rid you of its weight and set you on a path of financial freedom.
- You are behind on payments towards your unsecured debts. Rather than letting you default on the debt, creditors may be willing to negotiate on the recovery of the debt.
- You can comfortably make payments towards the settlement account.
Which Debt Can You Enroll?
Accredited Debt Relief covers a variety of unsecured debts, including credit cards, personal loans, payday loans, medical bills, private student loans and store card debt. However, the debt relief program does not cover debts such as parent plus student loans, mortgages, car loans, magistrate and court fines, and compensation for death and injury.
If you go this route, remember you’ll have to stick to the payment plan to see success. It’s imperative to seek clarity on this issue with your agent before enrolling to avoid penalties or ejection.
Though infrequent, there are instances of creditors refusing to work with settlement companies. In this case your only alternative might be filing for bankruptcy protection.
Some creditors report forgiven debt to the IRS so they can write it off as a loss. The IRS will consider the amount income on your part and tax it accordingly.
Your already battered credit score will take another hit when you divert cash into the account to build up your settlement fund.
The Bottom Line
Conducting your due diligence before settling on debt relief plays a key role in your success in this regard. There’s no need to stress over unmanageable debt when securing the help of a debt relief company can set you on track toward debt freedom.