Find the Best Debt Relief Companies in Boston, MA

How to get debt relief in Boston

When you fall on hard financial times, it can be overwhelming to find a reputable company to help. Regarding debt relief and settlement, you need a company that won’t take advantage of your vulnerable situation and will guide you through the entire process.

If you are struggling to get out from under a mound of debt, now is the time to start researching debt settlement companies. Not all debts are eligible for settlement, but those that are include:

• Credit cards
• Medical bills
• Personal loans
• Some private student loans
• Some types of business debts

Boston has specifically correlated student loan debt with negatively affecting homeownership opportunities. If you find yourself behind on student loan payments and it’s hindering your ability to purchase a home, debt settlement may be right for you.

There are a variety of considerations when choosing a debt relief company. Debt amount is a large factor because some companies don’t work with low debts. Additionally, you may want to work with a company offering more than just debt relief services. Some feature counseling and mentoring services, too, which can help maintain debt-free living after settlements are reached.

“When it comes to debt relief, be sure to do your research,” says Paw Vej, COO at Financer.com. “Many scams are designed to take advantage of people in need.”

Vej says red flags include refusing to provide detailed information on services, high-pressure sales and sudden price or service availability changes. Asking friends and family for recommendations, reading online reviews and researching debt relief companies are great ways to ensure you’re not going to be ripped off. The Federal Trade Commission regulates debt relief companies. Additionally, the American Fair Credit Council and International Association of Professional Debt Arbitrators offer accreditations and advocate for fair debt settlement procedures.

Types of debt relief in Boston

If you’re looking for Boston debt relief, there are a few options. These include:

• Debt consolidation: Debt consolidation is taking a lump sum from a credit card or loan company, paying off multiple debt accounts and then having one monthly payment. Ultimately, this leads to paying less in interest over time, and you may even qualify for no interest if paid off in a certain amount of time. Fees apply, so be sure to read the fine print of any consolidation agreement.
• Debt settlement: Debt settlement means negotiating with creditors to pay less than the total amount owed. This is typically only for those who have not been able to make payment over an extended time. Debt settlement can be done through a settlement firm or you can go DIY if you’re confident in your negotiating skills.
• Bankruptcy: Filing for bankruptcy can sometimes reduce and eliminate your debts, but there are consequences. The biggest is damage to your credit score. There are two common bankruptcy types: Chapter 7 and Chapter 13. Chapter 7 stays on your record for 10 years and Chapter 13 for seven.
• Credit counseling: Credit counseling can advise you on managing your money and debts, develop budgets and organize a debt management plan. These companies are typically non-profit organizations, so there is low or no cost for services.
• Balance transfers: Balance transfers move credit card debt from one card to another. This could be a new credit card or an existing account. Credit card companies often offer promotional or introductory interest rates, which might be as low as 0 percent APR for a certain length of time. Balance transfer fees may apply.

How much does debt relief cost in Boston

Most debt relief company fees range from 15 to 27 percent*. One benefit of debt relief is that companies legally can’t charge you fees until debts are settled. This typically means no upfront fees are required, and many companies offer free financial assessments before you commit to a debt relief program. Fees will typically be charged based on the total amount of debt in the settlement. Some companies offer referral bonuses to lower your costs.

There are several things to consider when it comes to the cost of debt settlement. The biggest is the debt amount. You will pay higher fees on higher amounts. However, many debt settlement companies are transparent with fees in the beginning so there are no surprises.

In addition to debt amount, interest rates will affect your overall cost. During the settlement negotiation process, you will likely still be responsible for making debt payments. The longer it takes to reach a settlement agreement, the more interest you are responsible for.

Another cost factor is settlement length. Programs can take anywhere from 18 to 60 months to fully settle debts. Throughout this time, you set money aside to pay settlement amounts. As the settlements are reached, the money you’ve set aside is used to pay. It is not always a quick process, but after you’ve completed the program, you’ll be on your way to being debt free. Boston had around $3.5 billion in household credit card debt in the first quarter of 2022, so being debt free may be an important goal for you to work toward.

Boston debt relief FAQ

What is the downside of filing for bankruptcy?

Bankruptcy can be a quick way to get out of debt, but there are some cons. Public records, income limits and having to rebuild your credit are all downsides to bankruptcy. This is particularly true if you have a credit score above 600.

How can I get out of debt with no money and bad credit?

Bankruptcy is an option to consider for those with limited cash to pay off debts. There are pros and cons to bankruptcy, so it’s important to research it to make sure it’s the right choice for you.

How does debt consolidation work?

Debt consolidation is taking multiple debts and combining them into one monthly payment. You can also get lower interest rates when you consolidate, and consolidation takes months off the payoff time.

What percentage of a debt is typically accepted in a settlement?

Usually, a creditor will take 40-50 percent of your debt. Sometimes it could be as high as 80 percent. Factors that determine the amount include if you’re working with a debt settlement company and if it’s with the original creditor or a collector.

How does a credit card settlement affect your credit score?

Every situation is different, but most people see an improved and/or recovered credit score after finishing a debt settlement program. Initially, your credit score could decline, but as debts are paid off, it should start to rise again.