I’ve Seen Ads for Accredited Debt Relief, InCharge Debt Solutions and Dave Ramsey. Which Should I Use? – Don

“Dear Damon,

Almost $20000+ in credit card debt. Also owe IRS back taxes.

Thinking of debt relief or debt settlement for credit card debt and looking for help with budgeting money. Alot of people I now use Dave Ramsey but I need to get my payments down do I have more breathing room with my funds. I have seen add for Accredited Debt relief and in charge debt solutions. What is your opinion on this.

Thanks

Don”

Dear Don,

Ultimately the best solution depends on your current financial circumstances and your goals. InCharge Debt Solutions is a CCCS program and operates very differently from a company like Accredited Debt Relief, which is a debt settlement company.

In a nutshell, the difference between a CCCS or (DMP) and a settlement program is the following.

A CCCS program works with your creditors upfront to lower your interest rates and creates a plan (hopefully within your realistic budget) to make a single payment to them which will in turn be sent to each of your creditors. If all goes well, the plan should last for about 3 to 5 years typically. You will pay back all of your debt plus some reduced interest.

This option is good for people that have steady income can make their minimum payments but simply have very high interest rates that they have been unsuccessful in convincing their creditors to reduce.

Debt Settlement is basically the polar opposite of CCCS.

You stop paying your creditors and save what money you can in the hopes that you either have the money available or can raise enough money to offer a settlement amount to your creditors before the account escalates to potential legal action. This option can save you money over a CCCS but does carry more risk.

A Debt Settlement plan is an option for an individual that has trouble affording a minimum monthly payment, finds the payment of a CCCS program too high, but is not a good candidate for bankruptcy and can raise enough funds to settle the debts within a reasonable time period. You will fall behind on your bills, and there will be potential for litigation. (The process will not be the most pleasant experience you ever had)

Obviously there are many more details to both options and unfortunately in my experience you don’t tend to get the best information on alternative approaches when you talk with these types of companies directly. For obvious reasons, my CCCS companies will tell you why their solution is better and Debt Settlement Companies will tell you why their solution is better.

Further still, consumers can negotiate directly with their lenders for interest rates and a lump some settlement offer in the right situations.

So to try and answer your question with the limited information I have, I can only give you some general guidance and that is to look at your overall financial situation and first determine your most important goal.

Then speak with a DMP counselor at InCharge, or Cambridge Credit Counseling and find out what your monthly payment would be.

Then speak with someone at Accredited Debt Relief and find out what they are pitching to you. If it is a plan that is any longer than two years, I would say lets look at additional options. Find out what their fees are and when they charge them. If they charge them upfront, just hang up the phone and look elsewhere.

The most important thing is to first determine the best strategy to resolve your situation. Only after you know the best strategy can we start to answer the question of, can you implement that strategy without hiring anyone and save some money, or if you should hire someone, who is the best company to hire?

If you find that you are getting conflicting information from those programs and would like an unbiased consultation, feel free to contact me through my website and we can get into much more detail about your overall financial circumstances and put together a step by step plan that may or may not involve a settlement or CCCS type approach. In fact if you think you want to attempt to settle your debts you should contact me anyway, because I can get you a significant discount with just about any debt settlement company since I don’t accept referral fees from them.

If you send me the contract from Accredited Debt Relief, I can tell you in all of about 30 seconds whether or not they are even a company you should spend any time considering.

Damon is a talented independent debt coach that provides in-depth assistance and consultations for people struggling with debt. If you want a personal debt coach to help you through a difficult situation or want assistance to find secret discounts offered by debt settlement companies I think Damon Day is an excellent person to contact for advice and assistance. He can be reached directly at DamonDay.com

If you have a debt related question you’d like to ask, just use the online form.