Debt settlement company » Debtor

Is Debt Settlement a Good Idea?

admin — Sun, 27 Feb 2011 07:33:13 +0000

Debt settlement is a very good idea for individuals who are having difficulties with overwhelming credit cards debts that never do seem to go away. The idea of this program is a very positive alternative for individuals who do are having difficulty with their debts, but do not wish to experience a bankruptcy which has a drastic impact on one’s credit report.

If you are unable to pay your bills and declare a bankruptcy, the court which you declare your bankruptcy through will impose restrictions on your finances. The restrictions will be very invasive and limit what you are able to do financially. Consequently, settling financial obligations is a much better alternative. In this situation, an individual, lawyer, or a company representing the debtor will negotiate with the creditor in order to lower the amount owed to a more manageable amount.

Creditors are willing to do so because if they allow for the consumer to declare bankruptcy, they would stand to loose as much as the entire amount owed. It is typical for settlements to decrease debt amounts by as much as fifty percent. The creditor will take a slight loss, but they are more willing to loss half of the owed amount than all of it.

In addition, the creditor is able to claim the amount of forgiven debt for a nice tax break at the end of the year. Settlements allow for the debtor to be able to pay the remainder amount within three to five years. The company usually charges a fee that is based on a percentage of the amount of money that is forgiven by the creditors. With all of the positive effects, settlement is definitely a good idea for consumers and creditors alike.

By the way, by researching and comparing the best debt settlement services in the market, you will be able to determine the one that meet your specific financial situation. Nonetheless, it is advisable going with a trusted and reputable debt counselor before making any decision, this way you will save time through specialized advise coming from a seasoned debt advisor and money by getting better results in a shorter span of time.

By: Hector Milla

Debt Resolution

admin — Tue, 15 Feb 2011 22:52:09 +0000

Debt resolution refers to debt settlement. Settlement involves a debt reduction where a borrower and lender agree on a reduced balance. This is regarded as payment and can either be partial or in full. Settlement of a debt can also be referred to as debt negotiation or debt arbitration.

A debtor can make his or her own arrangements to settle a debt or can hire a lawyer to act on his or her behalf. Debtors also have the option of settling their debts through companies that offer such services. These companies may charge a certain amount up front or take monthly fee from the debtors account.

A borrower who is facing a lawsuit because of defaulting can hire a debt settlement company to negotiate with the creditors on behalf on his or her behalf. The company will always try to convince the creditors to reduce the debt in exchange for regular payments .This is beneficial to the borrower because through the company, the overall debt can be lowered and at the same time, he or she will have ample time to repay the company.

Debt resolution serves various purposes. First, it protects the borrower from lawsuits. It also damages the scores in the credit report of the borrower thus raising his or her credibility as a borrower. When it comes to lending, creditors normally use a credit report to asses an applicant. Settling a debt also protects a borrower from tax related consequences. Debt settlement also helps to clear one of all debts so that he or she can concentrate on things such as investment.

By: Mercy Maranga

Debt Collection Protection

admin — Mon, 14 Feb 2011 20:36:18 +0000

People that are in debt are often scared of debt collectors, but in fact (unless you have borrowed money from a loan shark or the criminal underworld) they have very little to worry about. Debt collection protection laws exist in many countries (certainly in the UK) and actually give very little power to the debt collector and a lot of protection to the debtor.

The best idea if you are experiencing problems with debt collectors is to seek qualified advice since the range of rules per country/state are very complicated and depend on many factors. There are some general principles that apply to most debt collection protection laws:

1. Debt collection agencies are not allowed to harass debtors. Activities that constitute harassment vary from place to place but would typically include calling too frequently or at unusual hours.

2. Revealing the debtors situation to other people (employers etc.). Debt collection agencies are supposed to take all reasonable steps to ensure that their actions do not alert other people to the debtors situation. This would include speaking to your boss at work or someone that lives in your home.

3. Using abusive language. Deb collection agents have to deal with you in a professional manner. Petty insults and bad language are not tolerated.

4. Misrepresenting their powers or actions that they are going to take. Unfortunately debt collection agents will frequently imply that they are going to take money direct from your employer if you don’t agree to pay them. This is completely untrue and illegal since they cannot do this without further legal action.

5. A debt collection agent that visits your home has no right to speak to you and no right to enter your home. In the UK it is only bailiffs that can sometimes do this, and even they have no right to force entry into your home in most cases.

6. I’m not sure whether this last point is against the rules (this site is only based on my personal experience) but beware of debt collection agents that try to get you to stop/reduce priority debt payments (mortgage, rent, food, tax, fines) to be able to pay them some money. Some will try because they don’t really care what trouble you get into.

If you feel that any debt collection agent that you speak to has broken the rules then your first action (other than getting some professional debt advice) should be to write a letter to the collection agency involved stating what they have done and that you know that it is illegal. This will stop the activity in most cases, but if it does not then you really do need to get some qualified free debt advice.

By: Neil Douglas-Campbell

Debt Settlement Programs – Advantages of Using Them

admin — Sat, 22 Jan 2011 22:00:48 +0000

A debt settlement program or debt arbitration is considered successful when both the debtor and the creditor reach an agreement. The agreement is that the debtor will pay a lesser amount than is owed and this will be considered payment in full. This will not work as long as you continue to make the minimum payments due, as many do regularly in their credit card debt. But if you stop making any payments at all when the late fees and interest start to add up you will be able to discuss a settlement on the original amount.

Do It Yourself or Hiring a Debt Settlement Company?

There are companies that can do this for the debtor. Many people prefer this because they are not sure enough of their ability to negotiate the right amount or they may feel ill at ease dealing with these problems. Some of the settlement companies will charge an upfront fee while others may charge a monthly fee. There are also those who charge after the settlement of the debt. They may get a percentage of the debt that is negotiated off the entire amount.

A debt settlement program differs from a debt consolidation program. The consolidation program will require that you take another loan to pay off the bills that are causing your financial problems. While this is beneficial for consolidating all your loans into one loan there are often stipulations to which you may not want to agree. Committing to an agreement to allow a foreclosure of your home to pay the loan if you default is one such stipulation.

This is because typically to get the loan you have to put up collateral which is often your home. Yes, you should get a lower interest rate but in the end if you cannot make the payments on this loan, you stand the chance of losing your home. Debt consolidation may be a good idea for some, especially with the state of the economy today. But jobs are not 100% secure and the possibility of losing your home is very real.

Is Bankruptcy An Option?

Bankruptcy is another alternative if you have gotten yourself in so deep there seems no way out of debt. However, the type of bankruptcy you declare is important. Chapter 7 will sell your assets such as your home to pay off your debts. So, you may end up losing your home using this method. Chapter 13 will allow you to keep your home and any other assets such as a vehicle if you make your payments to the bankruptcy court and the lender of your mortgage. If you default on these payments, the creditors can ask for a lift of the bankruptcy and file foreclosure or for repossession of a vehicle.

The disadvantage of a bankruptcy over a debt settlement program is the bankruptcy will stay on your credit report for 7 to 10 years. While in bankruptcy the debtor may not apply for credit cards or credit from any source without asking for permission from the bankruptcy court. This is not likely anyway because most creditors are leery about lending to someone who is in bankruptcy.

When it comes to debt consolidation, the impact on your credit may not be good. As a matter of fact, not all loan consolidation companies report your payments to the credit bureaus. So deciding between the options that are open to you can take some time and thought. With a debt settlement program normally the payments you make will show on your credit report even if they are settlement payments, it does show you made an effort, which is a positive thing when viewed by future possible lenders.

By: Jon Arnold

Credit Card Debt Negotiation – Easy Ways to Negotiate Debt Settlement

admin — Fri, 12 Nov 2010 10:56:40 +0000

One way of getting out from under all of your credit card debt is through credit card debt negotiation. In this process, you can contact your debtor and get them to settle your debt for a fraction of what you owe.

Though this will hurt your credit rating, it is a far better option than not paying at all or declaring bankruptcy. Those two options will make it very hard for you to get decent rates on future loans and make it hard for you to get a loan period.

Credit card debt negotiation is a very delicate process, involving a bit of give and take from both sides. You don’t have the money to continue making payments over the long term, but the credit card company wants their money back.

The truth is, credit card companies would rather have you pay something and sever the relationship, rather than keep your debt with them, dragging things out with no intention of paying. They don’t want to pay collection agencies to track you down; they would rather just cut their losses.

Many times it can help to employ the services of a debt settlement company through a debt negotiation program, but sometimes you can negotiate with creditors yourself and find positive solutions. If the debt negotiation is successful, it will save you not only money due to reduction in APR but also the hassle that is associated with looking for a new credit card to transfer balance.

If you are negotiating credit card debt by yourself the first thing that you need to do is find a proper mailing address for your credit card company to send all correspondence to. Don’t use the address on your bill, as that is for payment only. Once you have an address that is where you should send all correspondence regarding your negotiations.

Make sure you use registered mail with receipt. This paper trail forces the debtor to honor anything you can verify with mail, as opposed to phone calls, which mean nothing in court, should it come to that.

Also, it is imperative that you stay calm and conduct yourself with professionalism during credit card debt negotiation. Your debtor may try to verbally bully you, but don’t fall for any of the old tricks. Simply express your desire to settle your debt, no more, no less. Don’t include any personal information, such as why you want to settle, as that will likely get you denied.

In the end, you simply need to realize that although you got yourself in this situation for whatever reason, there is a way out. Systems have been put in place for situations such as yours; you just need to avail yourself of them. Regardless, it doesn’t hurt to call up your credit card company and ask, just make sure you follow up that call with registered mail.

By: Paul Sarwana

Debt Settlement Companies – How Does a Debt Settlement Company Work?

admin — Mon, 11 Oct 2010 02:54:50 +0000

Debt settlement companies make the settlement process hassle free for the debtors. Usually a settlement procedure takes several months. During this time a debtor has to deal with many different creditors. He or she has to handle the many collection and negotiation calls made by the creditors and their collection agencies. A debtor has to then analyze the terms and conditions offered by each one of them. Most of the time common debtors are unaware of their rights and end up settling for not so beneficial agreement terms. This entire procedure can be very stressful for the common debtor. Hiring a settlement company on the other hand ensures that a debtor does not have to deal with the creditors at all.

The entire settlement procedure is handled by the company. They negotiate with the different creditors and reach a negotiated amount payable. Debt settlement companies are able to reduce the loan amount by almost 50%. These companies also have the know how and expertise regarding other debt reduction options like debt consolidation, conversion of unsecured debts into secured ones etc. They provide a combined package of all these procedures to the debtors to make the burden of the loan as light as possible. The settlement companies charge a reasonable fee for their services. This fee is usually a percentage of the debt amount saved and is payable after the settlement procedure is complete. Hence legitimate debt settlement companies can only make money after they have saved some for the debtor.

At the same time all good settlement companies also offer many free services to their customers. They provide advice to the debtors on how to rebuild their credit scores after a settlement. They make a list of healthy expense habits and advise the debtors on how best they can follow them. They also analyze the annual income of the debtors and compare with their necessary day to day expenses. They then chalk out a monthly budget for the debtors. By following this advice the debtors can avoid debt in the future.

By: Mary Kuriakose

Debt Relief Network – How to Locate Professional Debt Settlement Companies

admin — Wed, 25 Aug 2010 06:02:49 +0000

You may have heard from lots of people of how they have managed to work towards coming out of debt using the power of negotiation which put creditors on the back foot. You no doubt are dying to know how they made the initial contact and how they went about it. Your first step towards working off your debts would be to get in touch with a debt relief network, plenty of which are available online. Once you sign up or give them a call, they will be prepared to give you advice, usually free of charge.

They will hear out your debt problems and will then look through a list of debt settlement companies they will have on their roster. These companies usually have a very high success rate in negotiating down debt with creditors and are manned by professionals. They are experts in the field of negotiation and are also largely drawn from the banking and credit industries, meaning they have innumerable contacts ready to listen to them.

Moving closer:-

A reliable debt relief network will only have highly reputable such companies on its rolls, those with a success rate of 90 percent or even better. They should also have an impeccable reputation, a strong network and the ability to listen to the debtor and come up with a tailor-made plan for him or her.

You will not have to locate the companies yourself but the debt relief network will do it for you. They will find you a compatible `partner’ and let you two decide how to go about things. Conducting a search on your own could be a futile and thankless job, not to mention time-consuming. Networks know what they are talking about and have conducted thorough background checks on the companies on its rolls. And after a conversation with one you it should be just a matter of minutes before they come up with a company who would measure up to you standards.

Till date, few complaints have been received from consumers who have gone to a legitimate network for help. Inevitably, they seem to emerge satisfied once negotiations are over indicating the network has done a good job in playing matchmaker. The organizations have benefited a lot of people and are seen as the first stepping-stone to getting out of debt, which in any case is a reason for cheer.

By: Katherine S. Young

Taking a Look Into Debt Settlement Companies

admin — Thu, 17 Jun 2010 07:34:57 +0000

Debt settlement companies are growing enormously in popularity and they are doing so for good reason. Many people are in a situation where their debt is completely out of their control and they need a reliable means of paying off their amassed debt. Paying the minimum payment every month simply will not get a person out of debt. It will only delay the payoff until it becomes impossible. That is why companies that offer a means of being able to settle debts are so helpful. They can allow a debtor to close out an account and put an end to such piles of delinquency notices.

But, what does a debt settlement entail? It is a rather simple process that is not even very complicated to engage in. Basically, a debt settlement program offers a lump sum payment with the intention of closing out an account. That means if you owe $4,000 on a credit card, an upfront, lump sum payment of $2,000 could be offered and once the credit card company received the payment, the bill would be considered paid in full. The credit card balance would be zeroed out and no more payments would be required for the debt. Yes, debt settlement companies can push such a deal through on your behalf and this will certainly allow you to get your financial accounts in order.

Some may wonder why the credit card companies would accept such a deal. The reason is simple. This is the best option they will have to acquiring a payment since a person who is headed into an out of control debt situation will surely present a potential default threat. If the person goes into default, the credit card company will have a very difficult time collecting anything on what is owed.

Also, when someone is heavily in debt, the possibility of filing for bankruptcy will rear its head. This can be a nightmare scenario for both the lender and the borrower. For the lender, bankruptcy could mean they will receive next to nothing as a payment on the money owed. The credit cards would have to rely on a judge’s decision in terms of what they will collect and this is not a good scenario. Hence, they would be much more open to what the debt settlement companies are willing to offer.

For the borrower, a debt settlement is a much more painless process than dealing with the complexity of bankruptcy court. Debt settlement is less involved and is much more immediate. As such, it is a much better plan to engage in than walking into the trap of bankruptcy court which can take weeks and even months to get worked out.

Of course, it is also important to select the right service to handle your debt settlement offer. While most debt settlement companies are top of the line, there are a number of scams out there. That is why it is best to perform a little due diligence research on any company you opt to deal with. This way, you can avoid being taking advantage of when you seek to close out your credit card debts.

By: Jon Arnold

Signs of a Legitimate Credit Card Debt Settlement Company

admin — Sun, 09 May 2010 12:38:49 +0000

If you are in a business, you will know that everything in business is negotiable, but did you realize that this includes your credit card debt as well. However, as in any good negotiation, you can only win your arguments if you know what to say and to whom in just the right way. In other words, you need to know the rules of engagement.

The best way of settling the money owing is to negotiate for debt settlement.

Debt Settlement

Debts can be resolved by a mutually made agreement between the creditor and the debtor. When the debtor is unable to meet his or her financial arrangements, it may be necessary to negotiate the debt, finding an amount that the debtor can afford to pay and the creditor is willing to receive. This negotiation can slash as much as 60 percent of the total amount owed. However, while negotiation is possible, it takes considerable skill and strategy to persuade the creditor to accept less than the full amount owed. For this reason, a financially savvy third party may be invited to do the negotiation on behalf of the client.

Finding A Legitimate Credit Card Debt Settlement Company

Bearing this in mind, you will want to look for a legitimate company to help you with resolving the charge card bills that are ruining your life. You will need a company that may even be able to help you negotiate a discounted payment of as much as 60 percent. This will enable you to pay off the entire amount you owe and begin a new financial life in 2010.

Since the economy has taken a downturn, so too has the level of indebtedness in the economy. This has resulted many debt relief companies appearing, and, unfortunately, many of them are not fully qualified to represent your interests, lacking either in professionalism and legitimacy.

How, then, do you find a legitimate company to represent you? What are the qualifications that you should be looking for in the company itself as well as the training of its representatives?

Here are some of the things that you should look for in a legitimate company:

1. It is an accredited company.
2. It is a member of The Association Of Settlement Companies.
3. It is a member of the Better Business Bureau.
4. It is a member of the local Chamber of Commerce.
5. It is licensed and bonded in your state.
6. It has professional counselors, staff who are certified debt arbitrators.

Although it is possible to manage debt settlement by yourself and it is possible to find many debt relief companies to assist you, your fastest results with the biggest discounts on your debt will come when you do your due diligence and find a company that meets most, if not all, of the 6 point criteria.

By: Hector Milla

Served a Summons Or Credit Card Debt Lawsuit – Don’t Call the Creditor!

admin — Fri, 30 Apr 2010 17:01:52 +0000

I receive e-mails every week from people who have had the misfortune of receiving a summons notice on their doorstep or the joy of having a stranger sidle up to them and say, “You’ve been served.”

Not fun. Oftentimes, these same people tell me that the first thing they did was to pick up the phone, call the collection agent or collection attorney in many cases and try to work out a payment plan or settlement agreement. This is WRONG, WRONG, WRONG.

Once you have been served a summons, this means that the collection agency is SUING YOU. You are being sued and the collection agency is now the Plaintiff and you are the Defendant. Any and ALL communication with the Plaintiff should be done via written correspondence only.

It’s too late for “I’ll send you $50 buck a month, I promise.” Way too late. Now is the time to take responsibility for your financial future and face your fears (debt) head on. Even if the collector was to agree to a payment plan, they cannot be trusted. While you are “working it out” they could be in the process of putting a lien on your property and searching for your bank account information in order to seize your assets.

Here’s what you need to do. First of all, DO NOT BE INTIMIDATED. This is difficult, after all I’m sure you feel badly about the debt in the first place and it’s probably been haunting you for years. The sad truth is that many of these debt lawsuits are brought about on out-of-statute debt and the collection agencies and debt attorneys are notorious for re-aging the DOLA or Date of Last Activity on your credit report. It’s in your best interest to dig up any old credit reports and bank statements to prove the the date of the last payment you made on the defaulted account. If that date is past your state’s statute of limitations on open credit card debt, they have the right to try and collect, but they cannot sue you and must drop the lawsuit.

Additionally, very rarely is a debtor sued for the actual amount they owe…penalties, interest, and other assorted fees are generally tacked on to the balance. Make them prove their case!

There are many other defenses that can be raised against one of these collectors. The key is that you need to communicate with them through the court system. They don’t expect you to fight back, over 96% of debt lawsuits end in default judgment. The chances of them backing off and dropping the lawsuit are HUGE if you take the time to properly format what is called a Notice of Appearance, Answer, and Certificate of Service.

It takes some time and research to properly file these documents, but it’s your financial future at stake. A default judgment can not only freeze your bank account or garnish your wages but it will also ruin your credit for a minimum of 7 years. A few states offer basic templates for the forms you will need to file with the court, a simple Google search should offer up some resources. You can purchase Word templates (w/ affirmative defenses for third-party debt collectors) for the “Answer to Complaint” document and more at www.IHaveBeenServed.Info and alternatively there are very helpful people on several internet “debt” message boards who can offer up advice when drafting your own documents.

Additionally, you should fax and mail (certified, return receipt) a Cease & Desist Letter to the creditor informing them that they must communicate you with via written correspondence only and now that they know how to communicate with you they must refrain from contacting any of your neighbors, friends, relatives or employees in an attempt to collect their debt. If they violate your request, you can threaten to sue them for an infraction of the FDCPA (Fair Debt Collection Practices Act) which allows $1,000 for each violation.

Now is the time to action. If you do nothing, the creditors will find your assets and take them. Bottom line. File your Answer and other supporting documents and wait and see. The best that can happen? They won’t want to fight you in court and drop the lawsuit (they rarely have the supporting documentation to back up their claims) or you’ll receive a courtdate and you’ll be given the chance to work out a settlement agreement at that time. Either way you will have avoided a default judgement which is looked upon as poorly as bankruptcy in many cases.

Fight back! You have nothing to lose and everything to gain.

By: Jay M Johnson