It’s been over a decade since the financial crisis. And the only thing that seems to have changed is the composition of consumer debt. Back then, debt was tied to mortgages. Today, however, excessive debts result from student loans, auto loans, and credit cards. 57% of Americans still struggle financially, 46% cannot cover a $400 expense, and 33% have suffered financial hardship at some point. This triggers the question- what’s the best way to handle debt, and how to be free of it? Do Debt settlement programs really help?
“Yes!” says a study conducted for Freedom Debt Relief (FDR), the largest debt settlement company in the US. The Seidman Institute, the consultancy arm of the W. P. Carey School of Business at Arizona State University (ASU) carried out a study on individuals who participated in debt settlement programs. It covered over 3000 participants struggling with debt.
Titled ‘Assessing the Social Impact of Freedom Debt Relief’, the main objective of this study was to understand the impact of FDR’s debt settlement program on the financial and emotional health of its clients. It compared results from FDR’s debt settlement program graduates with those who qualified for the program but did not enroll.
Key Findings of the Study
- FDR’s debt settlement program significantly improved financial health. Those who availed the FDR program scored 24% higher on the Financial Capability Scale compared to those who never enrolled. The study indicated that these individuals are more likely to spend lesser than their monthly income, and also adhere to a budget. It further revealed that they are much more confident about handling emergency expenses. They are also less likely to face a late fee on a loan or bill because they are able to make payments on time. And all of this gives them better control over their finances and personal life.
- FDR graduates are considerably less stressed. Compared to those who never enrolled for the FDR program, those who did score 21% lower on the Perceived Stress Scale. This means that the debt settlement program made them feel much better about their financial outlook. They were remarkably less nervous about meeting unexpected expenses. In addition to this, they also felt that they were more in control of their finances and that things were “finally going their way”.
- The program truly improved personal lives. The study reveals that FDR graduates feel much better about their personal lives. 83% of participants are now in a better position to improve the quality of their lives, 76% feel their personal relationships are healthier and stronger than before, and 60% say that they sleep well at night. The respondents reported feeling much more empowered to make changes to their lives, and are actively pursuing their goals.
At a time when consumer debt is soaring and its impact is more palpable than ever before, these findings come as an eye-opener. Debt settlement is not always looked upon so favorably. But the findings of this study tell a whole different story. For many American families caught in the clutches of debt, this is worth some serious consideration. Participating in a reliable debt settlement program that provides financial discipline, guidance and support is perhaps the safest way to overcome debt.