Freedom Debt Relief Disclosure: Clients who make all their monthly program deposits pay approximately 50 percent of their enrolled balance before fees, or 65 percent to 85 percent including fees, over 24 to 48 months (some programs lengths can go higher). Not all clients are able to complete our program for various reasons, including their ability to save sufficient funds. Our estimates are based on prior results, which will vary depending on your specific circumstances. We do not guarantee that your debts will be resolved for a specific amount or percentage or within a specific period of time. We do not assume your debts, make monthly payments to creditors or provide tax, bankruptcy, accounting or legal advice or credit repair services. Our service is not available in all states and our fees may vary from state to state. Please contact a tax professional to discuss potential tax consequences of less than full balance debt resolution. Read and understand all program materials prior to enrollment. The use of debt settlement services will likely adversely affect your creditworthiness, may result in you being subject to collections or being sued by creditors or collectors and may increase the outstanding balances of your enrolled accounts due to the accrual of fees and interest. However, negotiated settlements we obtain on your behalf resolve the entire account, including all accrued fees and interest. C.P.D. Reg. No. T.S. 12-03825. 
Experian, one of the three major credit bureau companies in the U.S., said the impact on your score should be minimal if you and the agency making payments for you, are on-time every month. If lenders look at your full credit report while you are in a DMP, they will see that you are repaying the debt at a reduced rate and it may affect their final decision on whether to grant you a loan.

Great article. We are in the process of paying down debt, and the freedom we feel in watching that number decrease is a beautiful thing! Doing something RIGHT AWAY is key because, as your chart above shows, the greater the amount of money going into paying debt, the less you have to spend (even on the things you truly need!), so the debt pile increases and you never get out from under it. Everyone can do something NOW to see a shift in that picture. It all starts with an earnest desire to confront and change. Thanks for sharing.
There are other aspects of a Debt Management Plan that may impact one’s score, though. When a debtor enrolls in a debt management plan, all of his/her accounts are closed. This changes the mix of credit available to a consumer, and affects the length of one’s credit history. Those changes to the utilization rate and age of accounts can lower one’s score.
Those who are overwhelmed by debt often turn to credit counseling agencies to find help. They offer a variety of services, such as workshops, one-on-one coaching and debt management plans, all with a common objective. "The No. 1 goal is to leave people in a better financial situation," says Julie Kalkowski, executive director of the Financial Hope Collaborative at Creighton University. The Financial Hope Collaborative is a financial education and counseling program for low- to moderate-income families living in Omaha, Nebraska.
A debt-settlement firm is typically a private company that works to settle your debt with a creditor. They may charge fees upfront and promise to help you pay off debt. Beware of debt settlement companies, and if you’re unsure of the difference between a debt settlement company and credit counselor, review this chart by the Consumer Financial Protection Bureau.
I have recently cut everything up and transferred my high interest cc to my lowest int credit card. I’m not able to use any of them anymore. I have $2k in savings at a seperate bank. I am married with no children but I still worry that $2k isn’t enough. My DTI was .88 based on your system. Very depressing but helpful. I’m going to try something drastic and get rid of about $68k in debt on what is currently $71,500 of annual income by the time i’m 30. That gives me almost 3 years. Don’t know why but I feel like writing that actually helped me. Thanks again. I really enjoy the site and this post! Hopefully in 3 years or less i’ll write in with a success story!

Auto loans: Auto loans are secured debt guaranteed by your vehicle. For 60-month auto loans, the national average interest rate was 4.21% as of July 2018. Rates are low, so early payoff doesn't always make sense. However, it's a bad idea to continually have a car loan, so paying off the debt early and saving your car payment to buy your next car in cash is smart. 
Debt settlement. Debt settlement programs typically are offered by for-profit companies, and involve them negotiating with your creditors to allow you to pay a "settlement" to resolve your debt — a lump sum that is less than the full amount that you owe. To make that lump sum payment, the program asks that you set aside a specific amount of money every month in savings. Debt settlement companies usually ask that you transfer this amount every month into an escrow-like account to accumulate enough savings to pay off any settlement that is eventually reached. Further, these programs often encourage or instruct their clients to stop making any monthly payments to their creditors.
Checking your credit report for inaccuracies is an important step in your journey to reduce your debt. Remedy: You are allowed a free credit report from each of the major credit reporting bureaus, Equifax, Experian and TransUnion. Split them up, one every four months. Check them closely for incorrect delinquencies and/or balances that hurt your credit score and could make a difference in your ability to buy a house or car, or obtain more credit.
This should really only be explored a last resort for debt relief before you file for bankruptcy. If you’ve tried everything else and haven’t had any success, then you can consider a debt settlement plan where you settle your debts for less than the full amount owed. This can cause significant damage to your credit score and results may vary, but it may be your best option if your situation is truly critical.

A DMP is a payment plan that helps you repay your debts. By using a non-profit credit counseling agency to pay down and off your debt, creditors may also offer to reduce or waive fees, finance charges, or interest rates to ensure success on the plan. Simply, under the plan, you deposit a consolidated payment with us each month, which we in turn disburse to all of your creditors. We also handle calls from your creditors directly. The vast majority of our payment processing is electronic, so funds are transferred directly to the creditors without delay.

Both are possible solutions to problems with debt. A debt management program is not a loan. It consolidates unsecured debts and tries to lower monthly payments through reductions on interest rates and penalty fees. A debt consolidation loan is actually a loan, with interest charges and monthly payments due. With a debt consolidation loan, you would have to qualify to borrow the amount needed to pay off your debt. The interest rate is normally fixed and, depending on your credit score and history, may need to be secured with collateral like a home or car. Debt consolidation loans usually run 3-5 years.
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