Is Credit Associates the Right Debt Solution for You?

IAPDA Team • 24 Aug, 2023


Is Credit Associates the Right Debt Solution for You?

Are you struggling to keep up with overwhelming debt? You are not alone. Fortunately, a lifeline is available in the form of debt settlement. 

Debt settlement offers many benefits, including lowering your monthly payment and reducing your credit card debt. Some debt relief providers may even have your creditors stop collection activities to end the harassing phone calls.

Credit Associates is a debt settlement company that promises to help you reduce or eliminate unsecured debts. Let’s explore the company and the solutions they offer to determine if Credit Associates is the right debt solution for you. 

What is Credit Associates?

Credit Associates provides debt resolution services to individuals who are struggling with a large amount of debt.

The goal of Credit Associates is to negotiate a better deal on your behalf with creditors, reducing your principal balance and allowing you to pay off your debts faster and for less than minimum payments alone. 

Accounts a Debt Settlement Company Accepts

Most debt settlement companies work with creditors on the following types of accounts. Enrollment criteria may vary from one company to the next, and some accounts may not qualify based on account status, balance, and other factors.

Credit card debt

Credit card debt is the key focus of most debt relief companies. After all, America has over $1 trillion in consumer credit card debt.

Unsecured personal loans

Unsecured personal loans are installment loans, which are typically more difficult to negotiate than revolving lines of credit like credit cards. Although they may have a higher final settlement result, they can be included in most debt negotiation companies' programs.

Payday loans

Payday loans are short-term and high-interest, making them especially hard on consumers who have trouble paying them back. Because the loans often have low balances and are difficult to negotiate, not all debt settlement companies will accept payday loans. However, many companies do offer negotiation support through payday loan settlements.

Medical bills

Medical debt is especially stressful because it often involves a large portion of your monthly budget. Credit bureaus may have stopped reporting medical debt under $500 to consumer credit reports, but that doesn't make the debt disappear.

Before considering debt settlement for medical debt, see if you qualify for charity care options to eliminate the debt completely. Remember, medical bills don't usually charge interest, so medical debt settlement doesn't often result in the savings you might see on a credit card or other interest-bearing accounts.

Private student loans

Most debt relief companies will decline to enroll any debt that is backed by the government. That includes parking tickets, child support, and the big one—federal student loans. Unlike the federal government, private lenders may be willing to negotiate settlements of private student loan debt. Not all companies will accept them, but private student loans may be accepted and negotiated through debt relief companies like Credit Associates.

Business Debt

Not all debt relief companies will accept business debts. Terms and conditions are much different and business debt contracts often require business collateral to secure the loan. Because of the collateral, getting a creditor to agree to settle the account may be more difficult.

A debt settlement program may be the right place if you have one business debt mixed in with your consumer accounts. However, when business debt is the primary problem, business owners may be better served by an experienced lawyer or a company specializing in business debt resolution.

Account Types that Don't Qualify for Debt Settlement

Generally speaking, debt to friends and family, secured debt, and government-backed debt do not qualify for most debt negotiation programs.

How Credit Associates Works

Credit Associates promises a personalized approach to debt settlement. Their process typically begins with a no-cost phone consultation to discuss your situation, a savings plan to build funds for negotiations, and a negotiation phase where the debt is resolved.

First Steps with Credit Associates

The first step when you begin speaking with any debt relief company is a free consultation to assess your financial situation. A debt consultant at Credit Associates will likely ask about your financial hardship, help you analyze your financials, and share how their debt settlement program to become debt free quickly and affordably.

Creating a Savings Plan

This plan typically involves setting aside a specific amount of money each month. Monthly payments are allocated to a special savings account that is usually held by a third party. The money you save in the special purpose savings account will be used to pay off your debts once a settlement is reached.

Settle Your Debt

Once you have saved enough money to make a reasonable settlement offer, Credit Associates goes to work negotiating with your creditors. Their goal is to get the creditor to accept an amount that is lower than what you currently owe. With this approach you don't just save on your interest rate, but the actual principal balance of the debt.

Benefits and Risks of Using Credit Associates

Choosing Credit Associates as your debt solution provider has advantages and potential pitfalls. It's crucial to understand these before making a decision.

Benefits of Using Credit Associates

Working with a company like Credit Associates can provide several benefits:Benefits and Risks of Debt Settlement

  • Debt Reduction: One of the most significant benefits of using a debt relief company like Credit Associates is the potential for substantial debt reduction. They negotiate with your creditors to decrease the overall amount you owe, offering immediate financial relief.
  • Avoidance of Bankruptcy: If successful, debt settlement can help you avoid the long-lasting effects of bankruptcy. Bankruptcy should always be a last resort as it can significantly impact your credit score and overall financial profile.
  • Simplified Payments: Credit Associates consolidates your various debts into a single monthly payment. This streamlining can make managing your debt less stressful and more manageable.
  • Guidance and Support: The company provides professional guidance throughout the debt settlement process. The certified debt specialists at Credit Associates are available to answer your questions and assist you along the way.

Risks of Using Credit Associates

Using debt settlement services also comes with certain risks that you need to be aware of.

  • Credit Score Impact: The process of debt settlement can have a negative impact on your credit score. This is because you are not making payments on your debt while you are saving up for the settlement.
  • Tax Implications: The IRS may consider any debt that is forgiven as taxable income. This means you might owe taxes on the forgiven amount.
  • Potential Legal Action: There is a risk that creditors might decide to take legal action against you to recover the debt. Credit Associates cannot stop this from happening.
  • Fees: Credit Associates charges fees for their services. These fees are typically based on the amount of debt that they are able to settle for you.
  • No Guarantee of Success: There is no guarantee that any debt relief company will negotiate a settlement for all of your debts successfully. Some creditors may simply refuse to negotiate or may decline reasonable offers.
  • Long Process: The process of debt settlement can take time, typically 24 to 48 months. This means that you'll need to be able to maintain your savings plan for the duration of this period.

By knowing and understanding these potential risks, you can make an informed decision on whether or not Credit Associates is the right solution for your debt troubles.

VIDEO: Why Insist on IAPDA-Accredited Companies

Is Credit Associates Legitimate?

With many different debt solutions available, it's important to ensure you work with a reputable company that will support you through crippling credit card debt.

Is Credit Associates Legit? Here's what to look for as you choose a debt settlement company.

Credit Associates' Accreditations

As of this writing, Credit Associates is accredited by several well-known organizations, indicating that it operates with integrity and transparency.

International Association of Professional Debt Arbitrators (IAPDA)

IAPDA provides certifications and accreditations to debt relief companies, including Credit Associates. This indicates that they have undergone rigorous training in the debt settlement process and adhere to high standards of ethical practices. Learn more about IAPDA and search the 'cert to find a certified debt advisor.

American Association of Debt Relief (AADR) (formerly American Fair Credit Council/AFCC)

The AADR provides accreditation and certification for debt relief companies that adhere to its standards of excellence and comply with federal laws. Credit Associates is a member of the AADR and abides by its Code of Conduct.

The American Fair Credit Council has rebranded to become the American Association of Debt Relief as of August 1, 2023.

Better Business Bureau (BBB)

Credit Associates is not accredited by the BBB. The bureau's rating system requires companies to demonstrate a commitment to customer service and ethical practices. Credit Associates is not accredited by the BBB at the time of this writing, though they presently have an A+ rating from the BBB.

Credit Associates Alternatives

Is Accredited Debt Relief Legit?

Is DebtBlue Legit?

Is Turbo Debt Legit?

Is Pacific Debt Legit?

Making the Decision

When it comes to deciding whether or not Credit Associates is right for you, consider your unique financial situation and goals. Researching debt relief companies, understanding their accreditations, and seeing customer reviews can help you make an informed decision. Only then can you determine if Credit Associates is the right company to help you become debt free.

Questions to Ask Before Enrolling

When considering signing up with Credit Associates for debt settlement services, it is important to ask the right questions. This will ensure that you understand the program and its potential risks. Make the most of your free consultation by being prepared with smart questions:

  • Can I be sued?
  • Is there a free consultation?
  • How long will the process take?
  • Will I be required to pay any upfront fees?
  • What is the average settlement with my creditors?
  • Are customer reviews and testimonials available to read?
  • What types of debts can be settled through their programs?
  • Are there potential legal risks associated with debt settlement?
  • How will my credit score be affected by the settlement process?
  • What if I can't make payments while we're in the middle of a settlement?

Asking the right questions can ensure you have all the information you need to make an informed decision about Credit Associates. When it comes to debt, it is important to know your options and understand the risks associated with each one.

If you do decide to work with Credit Associates, be sure to review all of the details of their program. Understand the fees they charge and any potential risks associated with the process. While debt settlement can provide a great opportunity for debt relief, there is no guarantee that it will work in your favor. It is important to remember that debt settlement should always be a last resort.

Now that you know more about Credit Associates and what to look for, you can take your next steps toward financial freedom. Good luck!

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