When you’re drowning in debt, finding a way out can feel overwhelming. And if you’ve heard about debt resolution, you might be hesitant because of all the myths surrounding it. Maybe you’ve been told that it will destroy your credit, or that it’s no better than bankruptcy. These misconceptions can stop people from exploring a solution that could change their financial lives for the better.
Here’s the truth: Debt resolution is a powerful, effective way to tackle overwhelming debt. It’s faster than bankruptcy, doesn’t have the long-lasting damage people assume, and with the right approach—like our accelerator loan—it can set you up for financial freedom much sooner than you’d expect.
Let’s set the record straight by debunking five common myths about debt resolution, explaining why it’s often a better alternative to bankruptcy, and showing you how it can help you rebuild your financial future.
Myth No. 1: Debt Resolution Will Destroy My Credit Forever
Let’s start with the biggest myth out there—that debt resolution will obliterate your credit score for life. Yes, debt resolution may cause a temporary dip in your credit score, but the damage is far from permanent. More importantly, if you’re already struggling to make payments or are behind on bills, your credit score is likely already suffering. Debt resolution can actually help you turn things around faster.
When you resolve your debts, your creditors report this to the credit bureaus as “settled” or “settled for less than the full amount.” This does lower your score initially, but here’s the key: You can bounce back.
Why It’s a Myth:
- Credit recovery is possible: After resolving your debt, you can start rebuilding your credit right away. Many people see significant improvements within two to three years, especially as they lower their debt-to-income ratio.
- It’s better than doing nothing: Missing payments or defaulting on loans will do more long-term damage to your credit than resolving your debts.
- Your credit score will recover faster than you think: Once your debt is resolved, and you start showing positive payment history again, your score can improve quickly.
The Truth: Debt resolution does affect your credit, but it’s temporary. With responsible financial behavior, you can rebuild your credit and see improvements within a couple of years.
Myth No. 2: Debt Resolution and Bankruptcy Are Basically the Same Thing
Another common myth is that debt resolution is just like bankruptcy. But the reality is, they’re very different, and debt resolution is often a much better option.
Bankruptcy is a legal process that can stay on your credit report for up to 10 years, and it can impact everything from your ability to get credit to renting an apartment. Debt resolution, on the other hand, involves negotiating directly with your creditors to settle your debt for less than what you owe—without the lasting damage of bankruptcy.
Why Debt Resolution Is Better Than Bankruptcy:
- Shorter impact on credit: Bankruptcy can stay on your credit report for up to 10 years, while debt resolution typically has a much shorter impact.
- Quicker recovery: With debt resolution, you can start rebuilding your credit immediately after resolving your debts. Bankruptcy makes it much harder to rebuild for years.
- Private process: Bankruptcy is a public legal process. Anyone can search the records and see that you’ve filed for bankruptcy. Debt resolution is a private negotiation between you and your creditors.
The Truth: Debt resolution and bankruptcy are not the same. Debt resolution allows you to resolve your debts for less without the long-lasting consequences of bankruptcy.
Myth No. 3: Debt Resolution Will Cost Me More in the Long Run
Some people believe that debt resolution is more expensive than it’s worth due to fees and potential taxes on forgiven debt. But that’s missing the bigger picture: Debt resolution is designed to reduce the amount you owe. In many cases, you’ll end up paying only a fraction of your total debt, even after accounting for fees.
Your creditors would rather get something than nothing, which is why they’re willing to negotiate. And once a resolution is reached, interest and late fees often stop piling up.
Why It’s a Myth:
- Reduced total debt: The primary goal of debt resolution is to reduce your total debt burden. Yes, there are fees involved, but you still end up paying far less than what you originally owed.
- Interest freezes: Once your debt is resolved, creditors typically freeze interest on those accounts, meaning no more added charges.
- Tax considerations aren’t always a deal breaker: While the IRS might consider forgiven debt taxable income, many people qualify for the insolvency rule, meaning they don’t have to pay taxes on the forgiven amount.
The Truth: Debt resolution helps you lower your total debt and reduce interest, so even with fees, it’s a better financial move than continuing to rack up interest and late charges.
Myth No. 4: Debt Resolution Takes Years to Complete
One of the most common misconceptions is that debt resolution drags on for years and years. While resolving multiple debts does take time, the process is typically much faster than alternatives like bankruptcy or slowly paying off high-interest debt through minimum payments.
In fact, most people complete debt resolution in 24 to 48 months, depending on their financial situation.
Why It’s a Myth:
- Faster than you think: Debt resolution is designed to get you out of debt faster. Most programs aim to resolve your debts in two to four years.
- Accelerator loan speeds things up: With our accelerator loan, you can speed up the process even more. After making six on-time deposits, you may qualify for a loan that helps you settle the remaining balances quickly.
- Some debts resolve faster: Some creditors may be willing to resolve quickly, meaning you can eliminate certain debts within just a few months.
The Truth: Debt resolution doesn’t take forever. In fact, with a focused approach—and tools like our accelerator loan—you could be debt-free in just a couple of years.
Myth No. 5: Debt Resolution Is Only for People in Extreme Financial Ruin
It’s a common belief that debt resolution is only for those who are on the brink of financial collapse. But that’s simply not true. Debt resolution is an option for anyone who’s struggling with debt and looking for a way out—whether you’re behind on payments or just looking to avoid bankruptcy.
Debt resolution is a smart choice for people who:
- Are struggling to keep up with high-interest debt.
- Want to reduce their overall debt and pay it off faster.
- Are looking to avoid the long-term consequences of bankruptcy.
Why It’s a Myth:
- It’s for anyone who needs debt relief: You don’t have to be in dire financial straits to benefit from debt resolution. If you’re struggling to manage your debt, it can be a proactive way to regain control of your finances.
- It’s not just a last resort: Debt resolution can be a smart move for anyone looking to reduce their debt quickly, even if you’re not in financial crisis.
The Truth: Debt resolution isn’t just for people in extreme financial ruin. It’s for anyone who wants a faster, more effective way to get out of debt.
The Power of Debt Resolution and Our Accelerator Loan
One of the greatest advantages of debt resolution is the ability to reduce your debt quickly—and the process can be even faster with our accelerator loan.
Here’s how it works:
- After making six on-time deposits in our debt resolution program, you may qualify for an accelerator loan.
- This loan helps you settle any remaining balances, allowing you to resolve your debts faster.
- It’s a powerful tool that can get you to financial freedom much faster than traditional resolution methods.
With the accelerator loan, you’re not stuck waiting for years to see results. It’s a way to take control of your financial future quickly and efficiently.
Final Thoughts: Don’t Let Myths Hold You Back
Debt resolution is an incredibly effective option for tackling debt, but too many people are scared off by myths that simply aren’t true. Don’t let these misconceptions keep you from exploring a solution that could change your financial future.
By addressing your debt through resolution, you can avoid the long-lasting effects of bankruptcy, rebuild your credit, and get back on track. With programs like ours and the accelerator loan, you can be debt-free faster than you might think.
Debt resolution isn’t risky or credit-destroying. It’s a proactive, smart solution for anyone looking to reduce their debt and move forward. Take control of your financial future today.