Texas is known as a state that loves things big: big land, big hats, and big BBQ. Texas can even boast about having three of America’s top 10 cities. And the big Daddy of them all is Houston, with its area population of 6,790,100 this large metropolis continues to add new residents each year. Although many came together in a big way to help each other during the flooding from Hurricane Harvey in 2017, many Houstonians are still recovering from the storm. And for some that recovery has a huge financial impact.
Learn About Debt Solutions
There’s no one-size-fits-all debt solution, but there are options that might better fit your situation. If you’re a Houston resident struggling with debt, then know that you’re not alone. Depending on your situation, debt counseling, debt settlement, or another debt solution may be the perfect option for you. Your ideal solution will depend on factors like your debt amount, type of debt, and credit score, so it’s important to examine all options before you commit. Here’s an overview of solutions that may be available to you.
Credit Counseling Along with Enrollment in a Debt Management Plan
If you don’t have massive debt or just want some tips on how to reorganize and reprioritize your budget, then debt counseling, sometimes referred to as credit counseling, may be right for you. A debt counselor can help you build a budget that meets your needs while helping you pay down debt. Once a debt counselor has an understanding of your situation, they may recommend enrolling in other debt relief services, such as a debt management plan (DMP).
A DMP works as a consolidation tool as all enrolled debts will blend into a single monthly payment that you can afford, simplifying your expenses. This is a personalized program where the credit counselor will look at all of your enrolled debts and then negotiate with creditors to see about a lower interest rate, known as a “concession rate,” for your enrolled debt. Your monthly payments through the DMP will be based on the new concession rate(s).
Each month, as you pay the credit counseling DMP service, then they distribute the money to your creditors. In the end, you will pay back 100% of the debt, plus interest and the fees. There is a fee for DMP services; however, this course of action lets you focus on a single payment each month.
This can help you gain control of your finances as it may save you money in interest on the debt. Additionally, your enrollment in a DMP helps protect you from creditor collections. It’s important to understand that credit counseling, which differs from debt resolution, does not reduce your debt—you will still owe the full amount.
Understand that enrollment in a DMP may require you to close some or all of your credit card accounts, which can hurt your credit score. And it can impact your ability to open new credit as lenders may view you as a credit risk.
If currently you live in Houston and are having a hard time making the minimum payments each month and aren’t comfortable with the fact that credit counseling may require you to pay even more each month, then this may not be the right debt solution for you.
Debt Resolution with Enrollment of Your Debts
If you have over $7,500 in debt, then the better answer may be to look into debt resolution. Debt resolution, sometimes called debt settlement, is where you work with a company to reduce and resolve debt.
Upon deciding to work with a debt resolution company, they’ll :
- Review your debt situation, looking at all of the debts you want to enroll
- Create a personalized debt relief plan for working with your creditors
- Set up a special program account in which you deposit a monthly amount
As you build up the funds in your account, the debt resolution company becomes your advocate and negotiates with creditors on your behalf to help save you money on the total amount of debt owed. Once you enroll in a debt resolution program, initially you will stop making payments on the enrolled debts and, instead, make monthly deposits into a special purpose account. When an agreement has been reached with a creditor, you authorize the final settlement and the debt gets paid through your program account. This ensures you’re always in control of the process and the payments. The cycle of negotiation-settlement-payment repeats with each of your enrolled creditors until all debt has been resolved.
Though it is important to realize that a debt resolution can negatively impact your credit score, debt settlement could significantly reduce your debt. In return for their expertise, these programs charge a fee. However, a debt settlement program could help you get out of debt faster and for less money on the whole. If you have a high amount of debt, then the better answer for you may be to look into debt resolution where you work with a company, such as Freedom Debt Relief, to reduce and resolve debt.
Additional Debt Solutions
There are other options besides debt counseling and debt resolution. With a median household income of $61,444, Houston residents may want to research alternatives, such as debt consolidation loans, a minimum payment plan, a low or zero interest balance transfer, or, for extreme situations, filing for bankruptcy.
Request a free debt evaluation to find out how we could help you:
- Resolve your debt faster
- Significantly reduce what you owe
- Make one low monthly program payment
Get Help from a Debt Expert
Many Houstonians—as well as other Texans—are burdened by high debt, so know that you are not alone. If after you apply these strategies you still feel overwhelmed by debt, then consider enrolling in a debt solution program like the one offered by Freedom Debt Relief. Such programs can help with credit counseling, debt negotiation, and/or debt consolidation. And enrollment can help to reduce money stress as you know you’ll be on a path toward financial freedom. Make sure to select a program with a company who is a member of the American Fair Credit Council (AFCC) as then you will have the help of a professional advisor who can be a partner for getting on track and can show you the light at the end of the tunnel.
To get advice about your situation, speak with a Freedom Debt Relief debt expert at 800-910-0065 as our team is available 7 days a week.