What Is Debt Relief?

Debt relief is the reorganization of debt in any shape or form to provide the indebted party with a measure of respite, either fully or partially. Debt relief can take several forms:

  • Reducing the outstanding principal amount (again, either partially or fully)
  • Lowering the interest rate on loans due
  • Extending the loan term, among others

Creditors may only be willing to consider debt-relief measures when the repercussions of debt default by the indebted party or parties are perceived as being so severe that debt mitigation is a better alternative. Debt relief may be extended to any highly indebted party, from individuals and small businesses to large companies, municipal,


Debt settlement and debt consolidation share a common goal – help consumers find a way out of credit card debt – but take very different routes to achieve that goal.

Debt settlement is negotiating with creditors to settle a debt for less than what is owed. This method is most often used to settle a substantial debt with a single creditor but can deal with multiple creditors.

Debt consolidation is an effort to combine debts from several creditors, then take out a single loan to pay them all, hopefully at a reduced interest rate and lower monthly payment. Consumers typically try to keep up with bills for multiple credit cards and other unsecured debts.

The pros and cons of debt settlement and debt consolidation vary, especially concerning the amount of time it will take to eliminate debts and their impact on your credit score. When used properly, either can help you get out of debt sooner and save money.

While Floridians have done a somewhat admirable job of keeping their debt levels in check despite some tough economic times, some particularly troubling numbers are coming out of the Sunshine State in the past year.

Florida ranked second in the nation in both bankruptcies and foreclosures in 2021. A whopping 13,595 Floridians were forced to file for bankruptcy in 2021 — second only to California’s 18,817.

Florida ranked first in the nation regarding foreclosures until October of 2021, when Illinois mercifully passed the Sunshine State. As of December of 2021, Florida has seen 2,971 foreclosures, with most of them coming in hard-hit counties Wakulla, Hamilton, Clay, Broward, and Miami-Dade.

Despite those troubles, Florida’s economic outlook appears headed for major improvements in 2022.

The state’s unemployment rate dropped to 4.5% at the end of 2021, below the national average (5.2%), and down some 9.2% from the peak in 2020. The state has regained more than half (974,300) of the 1.2 million jobs lost in March and April of 2020, and nine of the ten biggest industries in the state reported growths in year-over-year job numbers. Leisure and hospitality — the long lifeblood of Florida’s economy — showed a 14.6% jump in 2021.

The hope, of course, is that improved job numbers will lead to fewer issues with foreclosures and bankruptcies in 2022.

Debt Relief Options for Floridians Residents

InCharge Debt Solutions’ debt management program is a top option for Floridians experiencing problems paying their bills. InCharge’s certified credit counselors can help customers consolidate credit card debt, lower interest rates, and create affordable payment plans.

The debt management program helps customers get rid of credit card debt for 3-to-5 years. Clients will have to abide by a strict spending budget and make on-time payments every month, but they emerge debt-free.

On average, consumers paid 16.5% interest on their credit card debt in 2021. Consumers who fail to pay off their debt every month could see interest charges spike to 25%, occasionally as high as 30%.

InCharge works closely with the credit card companies to reduce interest rates to approximately 8% and reach a monthly payment that fits a family budget. InCharge manages the monthly payments and distributes them to creditors in agreed-upon amounts.

Another critical factor to consider in starting a debt management plan is that your credit score will not be a stumbling block. Clients whose scores have plunged can still qualify for debt management plans.

Debt management programs are the easiest and most effective ways of taking care of a debt, but there are other options for Floridians struggling financially to consider:

· Debt Settlement – If you face credit card debt, personal loans, and medical bills, then debt settlement is a great option. This option allows the debtors to pay less than the amount(s) owed on their credit card(s). However, creditors must agree to a lump-sum payment amount to settle the debt. While this debt-relief option could solve some of your financial issues in the short term, the negatives — both immediate and long-term ones — should cause some concern. Debt settlement will result in a ding that will go onto your credit report and stay there for at least seven years. It can lower your credit score by anywhere from 50 to 100 points. That will affect your chances of landing future credit opportunities for major purchases such as a home or a car. Additionally, the IRS will count forgiven debt of more than $600 as regular income for tax-filing purposes.

Debt Consolidation Loan

 Consumers with a good credit score should be able to qualify for a debt consolidation loan. Consumers will use that loan money to pay off their credit card bills. Then, they will begin monthly payments to the lender that arranged the loan. That interest rate should be a fraction of the onerous one charged by credit card companies, which should mean big savings. The downside is that you still have a loan to repay, and consumers who don’t stop using credit cards will risk running balances back up.

· Credit Card Forgiveness Program – This is a new program offered by a small group of nonprofit credit counseling agencies, including InCharge Debt Solutions. Choosing this option allows consumers to pay 50% to 60% of what is owed over three years. The difference between this option and traditional debt settlement is that no negotiating is needed. Creditors agree in advance to lower the amount owed. Consumers can be free of credit card debt in 36 months.