Many individuals and businesses have had to face some form of debt. Debt is overwhelming and frequently scary, so it is so essential to understand the common myths surrounding different types of consolidation or restructuring.
There are dozens of myths surrounding debt restructuring. Hop online and do a quick Google search, and countless articles will come up providing advice. In theory, this is excellent news. In practice, much of the advice out there contains misinformation. Much of that misinformation revolves around common myths, which need to be busted.
Myth: All Debt Relief Companies Are Scams
The public has this grand idea in its head that all debt relief companies are total shams. Some bad companies back in the day caused concern and gave the rest of them a bad reputation.
However, the US government has been working hard to crack down on those companies, and more legitimate companies are available these days. If picking up a scam company is still a concern, a complete list of companies is not to be trusted.
Myth: My Credit Will Be Destroyed
Most people imagine that any form of debt restructuring will result in their credit scores tanking. Once again, there is a seed of truth buried within the myth. If a person were to try and consolidate their debt independently – without professional help, it could take a long time to recover from the hits their credit score will take.
When a business owner approaches a professional organization specializing in debt restructuring, the impact is not nearly so damaging. Their goal is to get the business back on track, which means keeping credit scores at a reasonable and healthy level.
Myth: It Doesn’t Work For Most People
According to Harvard Kennedy School’s report from 2021, up 74% of people successfully settle, or restructure, at least one of their accounts through a debt program. The study looked at settlements and outcomes between 2011 and 2020. Overall, it had positive results for many businesses.
Myth: It’s Too Late
Another unfortunate myth surrounding debt, in general, is the belief that it can be too late to try. Many people believe that once their debt has been sent off to a debt collector, they officially can not do anything about it.
To put it simply, this is wildly inaccurate. In fact, by finding a way to restructure the debt, the collection agencies will no longer reach out and search for payment. That certainly adds to the list of positives when it comes to debt restructuring.