
- By Mahum Zaidi
- January 20, 2025
Debt is a delicate subject for most people, and debt relief is even more so. We are a society that believes in lifting ourselves up by our own bootstraps: making our way in the world and paying our debts the old-fashioned way. Of course, the modern financial world is more complex than that of our great-grandparents, from the way debt is structured to how we can resolve it.
This has led to more than a few myths about debt relief services that could be holding you back from the best financial strategies for your financial future. Let’s talk about debt relief myths and why you should stop believing them.
Why Do People Fall for Debt Relief Myths?
Debt relief myths come from a combination of cultural feelings about debt and misunderstandings about the debt “industry”. These myths almost always serve to discourage people from seeking debt relief services because they instill fear of hidden motives and future financial complications. While there are debt companies that should be suspected (debt collection agencies, for example), debt relief is a valid set of strategies that can reduce, simplify, and relieve the burden of debts, making them easier to pay off “the old-fashioned way” and get on with your bootstrap lifting plans.
Here are the top 5 debt relief myths and why they are not true.
Myth 1: Debt Relief Ruins Your Credit Forever
Your credit score is calculated in a very specific way. It has to do with the number of debts, total debt, debt-to-borrowing capacity ratio, and your history of maintaining financial accounts in good standing. Your credit score is not directly affected by debt relief strategies except in ways that help you get your accounts in good standing and reduce the total amount that you need to pay off.
Debt relief does not have a specific effect on your credit score, but the strategies you implement often help to lift your credit score by putting accounts back into good standing and helping you more easily manage debt repayment.
Myth 2: Debt Relief Doesn't Stop Collections Agencies
There are several myths regarding debt and collections. You may have heard that there’s nothing you can do to manage the debt once it goes into collections. You may have heard that debt relief services can’t stop collection agencies from calling and harassing you. Both myths are false.
In fact, some debt relief services specialize in negotiating with collection agencies and debt collectors. This can result in lower total amounts, interest rates, and reasonable monthly payments in return for some amount of guaranteed repayment. Debt relief services also know all the steps necessary to get those unwanted phone calls and emails to stop according to fair debt collection laws.
Myth 3: You Have to Pay Up Front for Debt Relief
There are some debt relief services that help you wrap up messy debts neatly with one up-front lump sum payment. But only if this works for you. Most debt relief methods focus on creating an approachable monthly payment plan instead, because that is the route that will help most people manage their debts and maintain a path to full debt repayment.
Myth 4: Debt Relief Is the Same as Bankruptcy
Debt relief and bankruptcy couldn’t be farther from one another. Bankruptcy is a legal process that wipes your debts but has a drastic negative impact on your credit score and borrowing ability. Debt relief is another way to approach hard-to-pay debts by seeking routes that make your debts easier to pay. In other words, debt relief can help you set your debts right and get them repaid instead of declaring bankruptcy.
Myth 5: Debt Relief Companies Are Scams
Being in debt can cause you to be targeted by scam artists. No doubt you have received suspicious letters or emails from “debt companies” that seem scammy. It’s good to have your guard up, because there are scammers who target people in debt. However, legitimate debt relief service providers are financial professionals held to the highest standards of ethics and working in the best interest of each client.
Debt relief companies are not scams, they are a way to connect with financial experts who can help you reduce, manage, and build a path to repaying your debt. Simply seek out a legitimate debt relief service instead of responding to those suspicious letters in the mail.
Discover Debt Relief Services with DebtBlue
Once you know the difference, finding a professional debt relief service to help you gain control of your debt is simpler than you realize. DebtBlue’s financial professionals can help you renegotiate your debt, build a manageable repayment plan, and start the path to your debt-free financial future with the help of expert debt relief services. Contact us today to learn more.