The Law Office of Paul Mankin

What is a Debt Relief Agency?

If you are in debt and looking online for help you will most certainly find many offers of help from debt relief agencies. So what is a debt relief agency, what can they do to help, and should you use one if you are struggling with debt?

Debt Relief Agencies

The term “debt relief agency” can have a few different meanings. It can mean an agency that prepares and files bankruptcy petitions, on that provides debt consolidation loans, or one that helps a consumer manage their debt by allowing them to make one monthly payment directly to the agency, who then distributes the money to each creditor for them. This discussion will be about the later, which is sometimes also referred to as a debt management agency.

How Does a Debt Relief Agency Help with Debt?

Debt Relief, or Debt Management, Agencies help you manage your debt by calculating the total of your monthly bills, adding their monthly fee, then collecting that amount from you every month. The agency then pays your creditors for you and may also attempt to negotiate settlements with creditors that allow you to pay off the debt for less than you actually owe.  This can help many consumers who actually have enough money to pay their bills, but do not have the time or skills to negotiate, budget and then pay all of their bills on time, by allowing them to just pay the one bill every month to the debt relief agency. But for consumers who do not have the money to pay all of their bills every month, a debt relief agency may not offer much help in managing and paying the debt.

Should I Use a Debt Relief Agency To Help Me With My Debt?

Most consumers who are struggling with debt should not use a debt relief agency. This is because the majority of consumers struggling to pay their bills on time do not have enough regular income to pay all of their debt and adding a debt relief agency’s fee to this will only make it more difficult to pay the bills on time.  Consumers who are unable to pay their debt and are being subjected to collection calls should consider talking to a consumer protection attorney who may be able to help stop the calls and help them decide if they have any claims against the collection companies or if they should consult with a bankruptcy attorney.

If a creditor or debt collector is using any unfair, deceptive, or abusive practices in order to collect a debt from you, feel free to contact our office at 1-800-219-3577, for a free, no obligation consultation.