Why Choose Personal Debt Elimination?
With the unemployment rate above 9% nationally combined with a slower than expected economic recovery, financial stress is impacting many families across our nation.  When faced with these challenges, a lack of financial planning and discipline can quickly snowball into a complete financial crisis from families just trying to make ends meet to those who find their established standard of living challenged for the first time. Unplanned expenses are the most common reason why people accumulate significant debt. These expenses can include emergencies, medical costs, vehicle repairs, periodic or total loss of employment, and other factors. Even though these expenses may seem completely out of your control, what is really the underlying factor that opens the opportunity to financial stress in our lives is people’s lack of financial planning and spending discipline.
When considering options to relieve the stress of mounting debt outside of bankruptcy, four general programs are often considered: Corporate sponsored debt consolidation, corporate sponsored debt negotiation, corporate sponsored debt settlement (sometimes marketed as debt elimination services), and personal debt elimination. Each of these methods offers different “solutions” to your financial crisis, but in many cases they could end up making your current financial situation even worse than before.
In 2010 alone, there were over 6,000 complaints lodged against debt relief companies with the Better Business Bureau.  According to Better Business Bureau spokesman Steve Cox, “Families in debt may think their situation can’t get any worse, but trusting the services of some debt negotiation, consolidation or elimination firms can actually lead to increased debt and bigger headaches.”  This is why the Debt Free Squad believes that you are the only one that can truly relieve the stress finances are having on your family through a structured plan of systematic personal debt elimination. The majority of the individuals who accumulate significant debt don’t really have a plan or a budget to work with to achieve their financial goal. Establishing a realistic, workable plan and financial discipline is an essential first step toward financial independence, there are no quick and easy solutions to your financial challenges, no matter what other “financial relief” organizations will have you believe.
A debt consolidation company offers you a loan to combine all of your debt into one “convenient” package. The theory behind this offer is that you can make one lower payment to the company, rather than many payments to the different lenders. While this seems reasonable since these loans often come with lower rates, longer repayment programs, and, therefore, lower monthly payments, you can often wind up putting out more money in interest over the new, longer life of the loan. Basically it is a matter of reducing expensive monthly debt by spreading it over a longer period. You may have reduced some of your current financial stress, but you have insured that it will be with you for a longer period. In addition, some companies charge high service fees upfront or a penalty for early payoff.
Debt negotiation is the process of revising repayment terms with your creditor by securing a reduced interest rate, lower minimum payment, or some other type of relief. Debt negotiation companies claim that they will negotiate with your lender on your behalf for an upfront fee. Unfortunately, some companies charge excessively high fees or offer illegitimate services, leaving you worse off than when you employed their services. Also, handing your financial situation over to a company to solve often minimizes people’s active involvement in their finances and they end up slipping deeper into debt. Relying on debt negotiation firms could also adversely affect your credit report, making emergency loans more difficult to secure in the future.
Debt Settlement or Elimination
Debt settlement or elimination involves a lender writing off the balance of your debt which releases you from future liability. Obviously, this is not in the creditor’s best interest. Companies that offer debt settlement or elimination often rely on many different schemes. For an upfront fee, some companies provide a document to the creditor to attempt to absolve you of debt but this seldom produces any real results. Other companies will eliminate your payoff of debt with your current creditors only to replace it with monthly payments into a “savings account” created by the settlement company in your name. This account is used to pay the settlement company and any additional creditors. Ultimately you have not eliminated any debt but have only shifted who is receiving your payments.
While there are some reputable companies that offer genuine services on your behalf, beware of offers that sound too good to be true. There is no easy fix for reducing debt and many companies over promise and under deliver on their services. Financial freedom does not come easy. It takes a realistic, workable plan, a dedicated effort on your part, and informed encouragement and coaching along the way.
The Debt Free Squad website seeks to empower you to take charge of your own financial freedom with a personal debt elimination plan. A debt elimination plan is nothing but a clearly defined plan of action with specific goals that can be achieved within a given period of time with a little discipline and proper motivation. Compared to other solutions, a personal debt elimination plan actually reduces the amount you owe systematically each month while tending to the other critical areas of financial independence including savings, investments, and insurance. It doesn’t just address the current financial stress in your life but ensures that you develop life-long financial habits to eliminate financial stress in the future as well.
A sound financial plan is analogous to a healthy immune system. It’s not that you keep from getting sick in the future, but with a healthy immune system, your body can effectively fight off the sickness and recover quickly. The same goes for your finances. A sound financial plan backed by discipline will not keep you from facing any financial stress in the future, but when it comes you’ll be prepared to meet the challenge and quickly bounce back on your feet without becoming buried in another financial crisis. That’s why personal debt elimination is our goal.
 US Department of Labor, Bureau of Labor Statistics, http://www.bls.gov/news.release/empsit.nr0.htm, accessed 13 Feb 2011.
 BBB on Differences Between Debt Consolidation, Debt Negotiation and Debt Elimination Plans, 2 March 2009