North Carolinians need debt relief options – InsideSources
The North Carolinians, like millions of Americans across the country, have faced an ever-increasing debt burden for the past decade. These debts in the form of student loans, auto loans, medical bills, and credit card balances put consumers at risk if there are persistent shocks to the economy.
Since March last year, COVID-19 has caused many North Carolinians financial pain and almost 3.2 million Unemployment claims processed in Tarheel State. In the middle class, many are burdened with a greater burden of unsecured debt due to job losses, wage cuts and unexpected medical costs. When a family’s bills become unsustainable and it looks like they have nowhere to go, they deserve – and desperately – access to debt relief. One of those options – the debt settlement – is currently under attack by Raleigh lawmakers.
The debt settlement process delivers results by putting the consumer first. Companies like Freedom Debt Relief stand up for consumers – all of whom face some kind of hardship – and negotiate financial settlements with their creditors to settle those obligations for less than they originally owed. This solution has saved millions of Americans money. Freedom Debt Relief’s debt settlement program alone has helped more than 700,000 families struggling through financial hardship and paid off more than $ 13 billion of unsecured debts. Across North Carolina, our company has helped more than 25,500 financially distressed consumers save nearly $ 100 million in the past five years.
Legislature has heard from thousands of these North Carolina debt settlement clients over the past year who have provided sincere, personal stories of the positive impact debt settlement has had on their financial situation. Despite these impressive testimonies, some lawmakers continue to push for laws that would effectively eliminate this critical service from the state. To be clear, if the proposed legislation (known as HB 76) is allowed to become law, more than ten thousand North Carolinians will immediately lose access to the debt settlement programs they are currently participating in, and many more will lose access to this critical program Ability to tackle unmanageable debts in the future. This change would inevitably trigger a tidal wave of personal bankruptcies across the state.
Unfortunately, there are several misconceptions about debt settlement. A common misrepresentation is that participating in a debt settlement program leaves an indelible mark on a consumer’s creditworthiness. That’s just not true. Although consumers’ creditworthiness typically drops the first time they join a program, which is to be expected given their financial hardship, their ratings improve significantly the longer they stay with us, and the longer they stay with us, and 45 months after signing up is the median FICO score for program graduates returns to the level at the time of enrollment. Compared to bankruptcy – the only real alternative to debt settlement – this is a significantly better result.
Another often repeated inaccurate claim is that debt settlement customers will be forced into bankruptcy almost anywhere. This is also objectively wrong. The overwhelming majority of clients for debt settlement exits programs financially secure when they started. A recent longitudinal credit study, audited by a credit bureau, showed that debt settlement customers who completed the program exhibited a wide range of responsible credit behaviors, including lower credit card usage, fewer future defaults, and a drastic reduction in outstanding unsecured debt.
If HB 76 is let through, an important tool in helping financially troubled consumers in the state will be closed. By eliminating debt settlement as an option to provide financial relief for consumers, lawmakers will make the dire financial situation caused by COVID-19 worse for many people in the state. Knowing this, we urge North Carolina lawmakers to listen to the thousands of current North Carolina debt settlement customers who have reached out to them and delivered a clear message: Reject HB 76 so that critical consumers can continue to have access to all of their options have, like they do, working to regain control of their finances and their lives.