- 4 min read
- Review do-it-yourself debt advice.
- Examine what kind of professional debt relief advice is free.
- Use the Debt Coach tool find the debt solution that's right for you.
Use Free Debt Relief Advice and Tools to Save Money
In need of debt help? It is hard to find the right debt relief option, when you are struggling with debt. Just keeping your head above water takes a lot of energy. Investigating the ways to get out of debt may seem like more than you can handle.
If you start missing payments and receiving collection notices or threatening calls, it is even harder to see a way out. When money gets tight, hiring a professional is difficult. Look into free debt relief solutions as a first step. It may be best to hire someone to help you, but begin by taking the free debt relief steps you can on your own.
Do It Yourself
Working on your own may not always be the most effective solution to a debt problem, but one benefit is that it's always free.
- Budget: Establishing a budget is a basic, free step to any debt relief approach. It is a cornerstone to establishing long-term financial literacy and health. Getting out of debt and then continuing to improve your finances requires learning and mastering the basics of money management. Your budget will function as your basic guide. You can only solve a debt problem within the limits of your budget. Trying to put a debt solution into place that you can't afford to see through to completion is never going to solve your problems. Working on a budget allows you to understand your cash-flow, set out your priorities for spending, and discover where you waste money. Once you know what you can afford to spend on attacking your debt, you can more find the solution that is best for you. Budgeting is not a one-time exercise. Be sure to review your budget regularly, so you account for any changes in income or expenses. There is a lot of free debt relief advice available about budgeting. In fact, there is so much free budgeting advice out there, it can be difficult to sift through it. Free budget advice is available from government sources like the FTC, books you can get at the library, and numerous online sites. The Bills.com budget guide is one free resource that you can use.
- Contact Your Creditors: Contact your creditors as soon as you know you can't make a required payment. Explain your situation and try to set up a lower payment. Many creditors have temporary hardship programs. These will not solve your problems long term, but can protect you from late fees and a hike in your interest rate, buying you some time and keeping your situation from getting worse.
Free Debt Relief Counseling
Even professional firms that charge fees to work on your debt problem offer some free services.
- Consumer Credit Counseling: A consumer credit counseling service will give you free debt relief advice. Your initial consultation and a detailed financial analysis will be free. If you want an expert's opinion about your finances, as well as help setting up a budget, an accredited credit counseling service is a great resource. You will only pay a fee if you hire the credit counseling service to administer a debt management plan.
- Debt Settlement: Debt settlement firms also do not charge for initial consultations. An experienced debt consultant can offer you free debt relief tips and advice. The analysis will not be as formal or in-depth as the one you receive from a credit counselor, but can be extremely valuable.
- Bankruptcy: You should be able to find a free consultation with a bankruptcy attorney. Bankruptcy should be an option of last resort. However, if your debts are large, you're in an extreme financial hardship, and you can't afford the payments required for any other debt solution, it may be your best choice. Regardless of whether you choose to file for BK or not, a free consultation with an attorney will help you understand your options for getting out of debt as well as how best to protect yourself from debt collectors.
Free Debt Relief Tool
Following free debt relief advice is not enough to solve your problem. You need to take action to get out of debt.
Bills.com created Debt Coach to help you find the right plan of action to become debt free.
- Is free
- Compares up to five options for your actual debt
- Offers solutions that are based on preferences, goals, and needs that you specify
- Uses data Bills.com gathered about your creditors, data that is unavailable anywhere else
Professional debt resolution services are not free, but they may be necessary. Following the free debt relief advice available, including free professional debt relief advice, may not solve your debt problems. Some people are better equipped than others to handle things on their own. You may not need to hire anyone if you have the skills to:
- Work out a budget
- Contact your creditors to work out a modified payment plan or reduced interest rate
- Negotiate settlements on your own
- Handle notices and threats from debt collectors
If you lack these skills, find a debt resolution professional to assist you.
Struggling with debt?
If you are struggling with debt, you are not alone. According to the NY Federal Reserve total household debt as of Quarter Q4 2023 was $17.503 trillion. Student loan debt was $1.601 trillion and credit card debt was $1.129 trillion.
According to data gathered by Urban.org from a sample of credit reports, about 26% of people in the US have some kind of debt in collections. The median debt in collections is $1,739. Student loans and auto loans are common types of debt. Of people holding student debt, approximately 10% had student loans in collections. The national Auto/Retail debt delinquency rate was 4%.
The amount of debt and debt in collections vary by state. For example, in New York, 20% have any kind of debt in collections and the median debt in collections is $1755. Medical debt is common and 6% have that in collections. The median medical debt in collections is $456.
To maintain an excellent credit score it is vital to make timely payments. However, there are many circumstances that lead to late payments or debt in collections. The good news is that there are a lot of ways to deal with debt including debt consolidation and debt relief solutions.