Key Takeaways

Debt relief can provide you with a fresh start for your finances and a clear strategy to pay off your debts. From debt consolidation and debt settlement, or debt validation to bankruptcy, there are many options available. Deciding which option is right for you will depend not only on your individual circumstances but which debt relief option you qualify for.

TurboDebt Debt Relief Qualifications

TurboDebt offers debt relief services so you can regain financial stability and get out of debt faster. It’s easy and simple to qualify for the program TurboDebt offers. You need to have over $10k in unsecured debt. You should also be able to make payments each month toward your debt. TurboDebt doesn’t have any credit score requirements, so you’ll be able to qualify even if you have a low credit score.

You can take advantage of the free consultation to learn more about how the program works, to see if you qualify, and what you can expect along the way.

Student Loan Forgiveness Biden

The student loan debt forgiveness program announced in August 2022 by President Biden aimed to forgive up to $20,000 of federal student loan debt for qualifying student loan borrowers. The loan forgiveness program was available for pell-grant loans and not private student loans. Unfortunately, the Supreme Court has now prohibited the U.S. Department of Education from implementing this debt relief program. 

In August 2023, over 800,000 borrowers with billions of dollars in student loan debt will receive loan forgiveness. If you have been in an income-driven repayment plan (IDR) for over 20 years, and have made 240 or 300 monthly payments, you may be eligible for loan forgiveness. To see if you’re eligible, look out for an email from your loan servicing company.

Requirements for Obtaining Debt Relief Services

Regardless of how much debt you have and the nature of your debt, there is a debt relief option available for everyone. Learn more about the debt relief qualification requirements for each type of option to see which one will be the most suitable for you.

Criteria for Debt Relief Programs

The eligibility criteria for debt relief varies based on the program you choose. For debt consolidation, you’ll need a good credit score so you can get a loan or credit card with a lower interest rate. If you are seeking credit counseling, it’s usually available to everyone regardless of their credit score.

Debt settlement is another option, and you’ll usually need unsecured debt of more than $10k to qualify for it. Additionally, you’ll need to have the ability to put aside some money each month to save for a lump sum payment to your lenders.  

Bankruptcy is a last resort option for those with overwhelming debt. Some of the criteria to qualify for bankruptcy are listed below, depending on whether you apply for Chapter 7 or Chapter 13 bankruptcy:

  • You’ll need to pass the means test.
  • You’ll have to attend mandatory credit counseling sessions.
  • You should’ve filed your tax returns for the last four years.
  • You shouldn’t have filed for Chapter 7 in the last eight years or Chapter 13 in the last six years.

How to Qualify for Debt Relief Options

To qualify for a debt relief program, start by gathering all your financial information. Make a list of all your debts, the loan balance and outstanding credit card balance, the interest rate for each debt, monthly installments, and whether you’ve been paying each debt regularly.

Additionally, you should also make a budget to get a better understanding of your income vs. your expenses each month. Once you have this information on hand, research debt relief companies, check their reviews, and narrow down a few options. If the company offers a free consultation, take advantage of it. Talk to at least three debt relief providers to see what they offer and if you qualify for their program.  

How to Determine If You Qualify

The best way to determine whether you meet debt relief qualification requirements is by talking to a professional. A debt relief professional or a credit counseling agency can take a look at your finances, income, and the types of debt you have to provide you guidance about which program will be the most appropriate for you.

Quick Debt Relief Qualifications

The easiest way to get access to quick debt relief qualification is through a free consultation. Most debt relief companies, like TurboDebt, offer free consultations that you can take advantage of. Use this session to ask questions and to help quickly determine whether you’re eligible for the debt relief program they offer.

Advice on Meeting Debt Relief Qualifications

For many debt relief programs, such as debt consolidation, you’ll need to have a good credit score to qualify. Debt consolidation involves taking out a new loan or a balance transfer credit card at a lower interest rate and using it to pay off your high-interest debt. Your credit score needs to be high to qualify for the lower interest rate. Fortunately, there are several things you can do to improve your credit score and meet these debt relief qualifications:

  • Pay your bills on time each month to avoid late payment fees and penalties.
  • Reduce your debt-to-income ratio by paying off some of your debts.  
  • Set up auto-pay so you don’t miss paying any of your bills.
  • Keep your credit utilization low by not using more than 30% of the available balance on your credit cards.
  • Monitor your credit report and report any inaccuracies you spot.

The Different Debt Relief Options

The three most popular debt relief options are debt consolidation, debt settlement, and bankruptcy. One of these options may work for you, if you qualify.

Debt Consolidation Qualifications

Debt consolidation refers to the process of taking out a new loan or credit card to pay off your old debts, ideally at a lower interest rate. To participate in a debt consolidation program, you’ll need to apply for a loan or a credit card. Lenders usually look at the following factors to determine if you qualify:

  • Your credit history. Lenders will check your credit score and your payment history to determine your creditworthiness. Ideally, your credit score should be at least 580 to qualify for a new consolidation loan. The higher your credit score, the lower the interest rate you’ll qualify for.
  • Proof of income. Lenders will also look at your income to determine if you have the means to pay the loan installment or credit card payment each month.
  • Financial stability. Most loan servicers will also look at employment stability to ensure you’ll continue to have a reliable source of income for the term of the loan. If you have a full-time job that you’ve been working at regularly, you may be able to qualify.

Debt Settlement Qualifications

Debt settlement involves negotiating with your lenders to settle your account by accepting a lump sum payment that is less than what you owe. Typically, lenders will only accept this offer if you’ve already missed a lot of payments, and it doesn’t seem likely that you’ll be able to clear the full balance. A debt settlement company can negotiate with your lenders on your behalf.

The qualification requirements for debt settlement are simple. If you have over $10k in unsecured debt, and the ability to make monthly payments into a bank account to save for the settlement, you’ll likely be able to qualify for a debt settlement program. Your credit score is not a requirement for qualification.

Bankruptcy Qualifications

Bankruptcy is a legal process that allows borrowers to restructure or discharge their debts if they’re facing financial hardship. Chapter 7 and Chapter 13 are the two main types of bankruptcy for individuals.

To qualify for Chapter 7 bankruptcy, you must meet the following requirements:

  • You must pass the means test. The test takes a look at your family size, income, and expenses.
  • You shouldn’t have filed a bankruptcy petition in the last 180 days that the court had dismissed.
  • You shouldn’t have filed a Chapter 7 bankruptcy that discharged your debts in the last eight years or a Chapter 13 bankruptcy in the last six years.

To qualify for Chapter 13 bankruptcy, you must meet the following requirements:

  • You must have filed your income tax regularly.
  • You must have a regular source of income.
  • You shouldn’t have filed a bankruptcy petition in the last 180 days that the court had dismissed.
  • You shouldn’t have filed a Chapter 7 bankruptcy that discharged your debts in the last eight years or a Chapter 13 bankruptcy in the last six years.
  • You shouldn’t have over $419,275 of unsecured debt or over $1,257,850 of secured debt.

Affordable Debt Relief Qualifications

When seeking debt relief, it’s important to check the costs and fees associated with each program before you make a decision. Additionally, you should also compare the fees charged by different debt relief companies to ensure you’re getting the most affordable deal.

Credit counseling is inexpensive or free since it’s offered by government agencies and nonprofits. When you enroll in a debt management program, you may get a waiver on penalty fees or an interest rate reduction. But it may not be sufficient to help you pay off your debt, and the savings you get from interest rate reduction may not amount to a lot.    

In some cases, debt settlement can be the least expensive solution to get out of debt. The savings you’ll get will depend on a number of factors, such as the amount of debt you owe, but typically you can expect to save 50% of your enrolled debt before fees. The lender will forgive the remaining balance if they accept the settlement offer. With only about half of your debt to pay, it may be more affordable for you to save for a lump sum settlement amount.

The Bottom Line on Debt Relief Qualifications

Getting a better understanding of debt relief qualifications will help you determine which options are available to you to become debt-free. Debt settlement is usually the easiest to qualify for, while debt consolidation may be the hardest to qualify for if your credit score is less than perfect.

If you need help figuring out the right option for you, TurboDebt can help. Contact us for a free consultation to see what debt relief option suits you best. Our team will offer you a personalized debt relief option based on your individual needs.