Debt settlement company

Do you know that some forms of credit counseling are just another name for debt consolidation? Debt consolidation credit counseling programs have become as common as standard forms of debt counseling. This dual concept of combining counseling and consolidation serves to help people who are struggling with their debts and need a quick fix. Like many of the other programs this program also has its advantages and disadvantages.

These kinds of programs usually start with an advisor who helps those in trouble by consolidating their debts into one loan. They end up with one payment; a reduced interest rate and in most cases they negotiate to waive the penalties as well as the late fees. If you select the right debt consolidation credit counseling company, they can help you in many ways. The advisors will set you up with a plan with which you can be free from debt.

After examining your financial situation, the advisors will also provide you with a time frame in which your debt problem will be solved. That time frame is usually based on the amount of debt you have, your current budget and how far your creditors are willing to negotiate. As you can see, debt consolidation credit counseling has lots of benefits. But you must also keep in mind that these programs are not suitable for everybody.

Some of the creditors may not be willing to negotiate at that particular time. Others might reject the first offer presented to them by the consolidator. For example, if they consider the time frame to be too long then the credit companies might to just send the account to a debt collector. It’s crazy but no one said this business was based on common sense. Certain credit card companies still have a negative take on credit counseling. So you need to be careful about these things before you decide to go for a counselor.

So you need to learn about these rules prior to enrolling in a debt consolidation credit counseling program. To find out the best company you need to compare the various companies that offer credit counseling and debt consolidation. Choose the one that is the best suited for the situation you are in.

By: Joel Marks

Debt settlement letters are used by consumers to show willingness to repay debts. The goal of this letter is to negotiate with creditors to convince them to clear some of the consumer’s debt from the total and eliminate any fees that have accumulated. The lowering of interest rates is also negotiated within this letter.

The first step for negotiation between debtors and creditors concerning total debts is this debt settlement letter. Consumers can send out these letters directly or a debt settlement agency can be used. When an agency is used, letters are sent out on behalf of the consumer to the creditors.

To receive the success needed from a debt settlement letter; the first thing to learn is how to write an effective letter in a convincing yet professional manner. Before sending out a letter, it is recommended to look at all the pros and cons of the debt negotiation. Anything that is written about the debt settlement must be stated very clearly.

The main goal of a settlement letter is to lower a total repayment amount. Below are some tips for reference when writing this type of letter:

1. Make sure research is done before completing the letter. Understanding all terms and conditions of all debt is very important. Balances, interest rates, taxes, etc but all be clear.

2. When negotiating, have a figure in mind that you want to pay off.

3. It is important to have the funds available to pay for the debt before requesting the settlement.

4. After posting the debt settlement letter, a time period of waiting will be spent for the reply from the creditor.

5. If a settlement amount is rejected, a slightly higher repayment amount can be then be offered.

6. Do not stop writing to creditors until an approval is granted.

7. Begin to pay the settlement offer right away.

8. Ask for an official receipt from the creditor after payment is made.

9. Keep all correspondence with creditors.

By: Hector Milla

You’ve probably heard all kinds of stories about debt consolidation. Some of them portray it as the simplest and best way out of debt. Others paint a disturbing picture of escalating debt that leads inevitably to financial disaster.

The reality, of course, lies somewhere in-between. Debt consolidation may or may not be the best way for you to get out of debt. It all depends on a wide range of factors: not just how much you owe, but how much you earn and what kind of debts you’re thinking about consolidating, as well as your attitude to debt and to money in general.

There are, however, a few ‘dos and don’ts’ that should apply to just about anyone.

DO

Do talk to a professional debt adviser if you’re thinking about taking out a debt consolidation loan. You need someone who can help you explore your options, so make sure you talk to a company that doesn’t just provide consolidation loans. Maybe all you need is some advice on budgeting more effectively, so you can handle your debts yourself.

Do think carefully about the repayment term for your debt consolidation loan, if you take one. In general, the longer the repayment term, the lower your monthly payments will be, but the more you’ll pay in total, as your debt will spend longer accruing interest.

Do find out whether you’d be better off with a debt consolidation loan or a debt consolidation mortgage. A mortgage might give you a lower APR (Annual Percentage Rate) and more time to repay the debt, but you’d be putting your home at risk.

DON’T

Don’t keep on struggling if you really can’t afford your debt repayments. If it’s obvious you need help, ask for it – a debt adviser should be able to help you decide whether you need a professional debt solution, and if so, which one.

Don’t assume that the right solution for someone else is the right one for you. Just because debt consolidation worked (or didn’t work!) for someone you know doesn’t mean it will (or won’t!) work for you.

Don’t keep on using your credit cards, store cards and/or overdraft facility once you’ve taken out a debt consolidation loan. This is a real danger of consolidation – if you run up fresh debts, ‘replacing’ the ones you’ve just paid off with the consolidation loan, you’ll be in a much worse situation than you were before you took the loan out, as you’ll have to make payments to it every month as well as to your new debts! It might be a good idea to keep one credit card for emergencies, but you should never consolidate your debts without sitting down and thinking about how those debts got so high in the first place. Are there any mistakes you could avoid from now on? Is there anything about your habits you need to change?

By: Melanie Taylor