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Debt Consolidation Credit Counseling – Pros and Cons

admin — Wed, 23 Feb 2011 13:54:45 +0000

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 Consolidation Care – Product Review

admin — Tue, 18 Jan 2011 03:21:53 +0000

With the current economic situation there have been so many credit repair services and debt consolidation offerings come into the marketplace. In my years in the finance industry, I have found some of them to offer good advice, while others offer bad. Creditors are trusting you to pay them back when they write you a home equity loan or an auto loan or any kind of loan for that matter.

Debt Consolidation Care, the “Internet’s first get-out-of-debt community” offers good advice, free of charge, through their counselor analysis and their community of other people, just like you, that may have found themselves in a credit mess.

Their website offers free debt counseling, online debt consolidation help, company ranking chart, and forums where you can discuss your problems with other members that may have already been through the same thing. There is also a lot of other good information listed. One of the articles even includes sample letters you can use to send creditors.

Debt Consolidation Care goes through the pros and cons of other options such as self-repayment plans, debt management, debt settlement, debt consolidation loans, bill consolidation and bankruptcy. They give you some insightful information to fit your own scenario to help you make a more informed decision.

You can get advice on how to lower your monthly payments, reduce interest rates, waive late fees, eliminate collection calls, avoid bankruptcy, have only one monthly payment and become debt free. A plan of action will be developed between you and your debt consultant after the included debt counseling session.

Debt Consolidation Care has a unique forumn based website that really strives to tie in a community to help members get out of debt. Many of the other websites out there are trying to sell you something and give little in the way of information you can use on your own. Not only do you have a chance to get free advice from a panel of different experts, but by using their forums, you may find other people who have already gone through different options and can tell you what to expect, or the best one for your case, based on their experiences.

You credit score is a number that affects future loan interest rates and ability to borrow. The options you choose during times of credit trouble can not only determine your future borrowing ability, but can also save you thousands in interest and legal fees, if you make a well-informed decision. Anyone who is currently being hounded by debt collection calls knows that overcharging your credit cards can lead to serious trouble. By knowing your rights, and the sequence of events to expect, you can make your life less stressful and worry-free, by following the right advice.

You can go check Debt Consolidation Care Community for a free look at what they offer and read some of the articles and forums. You can become a member and get your free debt counseling analysis and start on your way to stress-free debt reduction, like thousands of others have.

By: Suze Fulton

Do Debt Settlement Companies Offer Real Debt Relief Help?

admin — Tue, 07 Dec 2010 14:16:59 +0000

There is no question that debt settlement companies offer solid debt relief. The facts support this financial management program in reducing consumer debt by at least 50%. This type of repayment plan has been successfully assisting customers with too much unmanageable debt for decades. Consumer debt is primarily credit cards, store accounts, and personal loans. These types of unsecured loans carry variable, double digit interest rates. There is no reasonable consumer method to pay these loans off, without the help of a debt management system of repayment. The small required monthly payments are used as a tactic by creditors, to keep consumers bound to paying on these loans for many years.

Breaking the cycle of paying high interest rates, and late fees can be accomplished with a debt settlement approach to repayment. These companies offer expert assistance with financial negotiators that work with their client’s creditors, to secure loan balances that are reduced through the lowering of interest rates. Late fees and penalties that have accrued will also be negotiated for removal from account balances. The settlement agencies work until an agreed upon amount has been reached, and approved by all concerned parties. The clients are notified when the negotiations have been completed, and a repayment plan will be presented for their approval.

A settlement service is a consumer friendly method of debt reduction and elimination. The agency’s service fees are conveniently combined with the monthly payments, to avoid any extra out of pocket money from their customers. The client, enrolled in the program, sends one affordable payment to the settlement company each month that is held in a trust, until enough money has been accumulated to pay off one debt at a time. This system enables customers to know exactly how much money is going out every month, and a new budget can be implemented to improve money shortages, this is part of the debt counseling those services offer.

Rely on the experts that have been in business for years assisting clients with personal finance management. Read about the process and customer testimonials at different online websites. Visit consumer websites that offer their financial advice about the benefits of a settlement agreement to restructure household finances. Enlist the help of the settlement experts today to begin savings thousands of dollars and years of repayment. Check out local and national consumer advocates who advise consumers to get out of debt and pay off credit cards.

By: Hector Milla

What Debt Settlement Companies Do Not Tell You

admin — Sun, 30 May 2010 16:13:09 +0000

A debt settlement company negotiates on a consumer’s behalf to help them settle debt. Negotiations are made between the company and the creditor to begin the repayment of debt. If you are considering working with a debt settlement company, it is recommended that you do plenty of research before deciding on a particular company. It is easy to fall into one of many scams that are present today.

Debt settlement does look to be very appealing because of the lower interest rates and lower payments. However, it has been found that the lower payment does exist but not because it is lower, it is because the extension of the term. If the debt is carried out longer, you will have a lower monthly payment, but it is also true if you stay in debt for a longer period of time, you will end up paying more money. This is the reason why these companies stay in business and continue to succeed.

There are many things that debt settlement companies do not tell consumers:

1. It is not the same as debt negotiation.
2. Sometimes the program charges hundreds of dollars as an initial fee to set up the account, plus a monthly fee. The fees and the amount of the total debt to be paid varies with each company.
3. There are companies who take payments each month but do not pay creditors monthly. Instead, they put the money in a trust fund while negotiating and then make a lump sum payment when the debt can be paid in full.
4. Creditors may sue you and your wages could be garnished in the time it takes to complete the entire settlement.
5. It is not asked that all interest, over the limit fees and late fees be stopped from accruing.
6. Creditors are not legally obligated to listen because they are not law firms.
7. About 15% of the total debt is charged in fees upfront.
8. Debt settlement is not right for everyone who has debt.
9. Your credit will suffer with the settlement.
10. Any debt balance that is forgiven and is more than $600 is taxable income.

Before you decide on debt settlement, it is highly recommend that you research and find a company that is reliable and trust worthy. You want to feel comfortable with the company itself before you feel comfortable with them handing your debt. While this article could sound negative, be certain that there not one but several reputable companies in this field.

By: Hector Milla

Negotiate Unsecured Debt

admin — Thu, 27 May 2010 00:10:52 +0000

Delinquent is a term used by creditors and collectors to describe accounts which payments are no longer being made on. As soon as a payment is missed an account becomes delinquent. These accounts must be at least 90 days behind in order for creditors to consider settlement offers on them. Meaning for three months before the account can be negotiated on the account is accumulating late fees, penalties and increased interest rates. Some accounts are usually better negotiated on with the original creditor before they are sent to a collection agency and some are better off going to a collection agency for negotiation. This information is key when negotiating unsecured debt.

Who knows this information better than an unsecured debt negotiator? Not too many people do. That is why it is best to let a professional handle all negotiations on delinquent accounts. The experience and the know how a debt negotiator possesses is unique and invaluable.

If collection calls and letters, threats from collectors are too much too handle maybe it is time to seek help. Debt negotiation companies can help lessen that stress greatly. Debt negotiation companies will contact creditors and collectors and aim for all phone calls on a client’s behalf to go to them. Not all calls will be stopped but they will lessen. Negotiators will use a document called a Power of Attorney to try and give clients a chance to eat dinner in peace. If accounts are delinquent and phone calls from collectors are a problem, debt relief is a great option.

Negotiating on unsecured debt is a way to save large amounts of money. Depending on how many months delinquent the account is and who is collecting on the account will dictate a savings that is much needed after allowing the account to accumulate late fees and penalties for non-payment. Settlements can range anywhere from 30 to 70 cents off on the dollar. It may be worth exploring the possibility of settlement to get back some of the money lost on late fees and penalties.

Settling accounts in delinquent status will also help credit scores begin to repair by lessening the debt to income ratio. This is extremely important if there are wishes to take on new loans such as buying a house. Think of it as getting back your financial health. Additional help may be required by credit repair companies to speed up the process of repairing the credit score to good standing. Ask the debt negotiation or settlement company to try and negotiate with creditors and collectors to remove the information they have reported to the credit bureaus.

Negotiating unsecured debt can bring back peace of mind for many people as long as it is done in a responsible manner, consult various debt settlement, negotiations companies before deciding on one of your choice. Remember in order to settle delinquent accounts funds must be made available to close the offers brought back by your negotiator, this is perhaps the most essential part of any negotiation, money.

By: Dan Delgado

Best Debt Consolidation Company – How Do I Find One That Actually Works?

admin — Thu, 29 Apr 2010 01:21:04 +0000

Finding the best debt consolidation company for you and your needs can be overwhelming and seem impossible to do. In your search for the most competent debt consolidation company, there are several of them to sift through. A lot of these companies offer different interest rates and payment plans so be sure you look carefully in order to find the best consolidation company you can. This is because everyone has a unique plan that is best for him or her and this takes a lot of research to find the one that is right for you.

First you must understand exactly what a consolidation corporation is in order to find the best. They are companies that that help you on your way to financial freedom even though they don’t necessarily give out loans. They mostly are known for giving out advice and help people along the way to financial freedom. The best company will help you with good advice and help you make the best choices possible.

Another aspect of the best consolidation business is how they help you. First and foremost they will direct in you the direction of the best and most responsible ways to get out of debt. When looking for the finest consolidation company you should look for one that will help you lower interest rates as well as show you how to make sure that your payments are on time. Lower interest rates are an important aspect of getting rid of debt but so is avoiding at all costs any late fees. When late fees are left to accumulate you is only making your balance grow unnecessarily, making it much harder to pay off.

Of course the most important thing to do to make sure you are getting the finest consolidation corporration is to compare, which involves a lot of time and effort on your part. The most convenient and fastest way is to look online. You can decide from companies near and far and compare by looking at some of the aspects discussed earlier. Though this makes some time and hard work on your part it can be the best thing to do when looking for the best debt consolidation company for you and your financial needs. Make sure whatever you do that you get references and recommendations, as many as possible, that way you are more confident that you have found the best debt consolidation company possible.

Now that you are ready to consolidate, it is time for a little hard work and discipline to find the best deal you can. This is not to be taken lightly, because finding the best company possible can mean the difference between being debt free or not.

By: Mike Singh

Legit Debt Relief Programs

admin — Sun, 25 Apr 2010 19:08:55 +0000

I have written in the past about programs that do not tell consumers the truth, hiding every little detail possible in order to cash in on retainer and monthly maintenance fees. First and foremost avoid most agencies with these unnecessary charges unless they come highly recommended from a reputable source.

What is the truth? Many of us do not want to hear our interest percentage rates will rise, late fees and penalties will continue to accumulate, etc.. when we stop making our monthly payments to our creditors, and there is no one that can make them go away except for consolidation programs that will negotiate to lower interest rates. When consolidating all payments must be made on time otherwise we will be dropped from the program. In order to consolidate debt we must be current on all payments. Settlement programs can not stop these charges at all, and that is the truth.

So now we now if we consolidate we will be paying everything we owe back to our creditors plus interest. What most consolidation companies fail to tell consumers is that for as long as they are in the consolidation program their credit report will look as if they have filed for chapter 13 bankruptcy. This little detail is often not told by credit counselors. If credit score is important any type of debt relief program must be avoided.

The same goes for settlement programs, credit score will be affected as well. The only difference is the person’s credit report will not show a chapter 13 mark. The accounts will be reported as delinquent until settled or payed in full. Again, if credit score is important debt settlement is not the route to go either.

Are there any tax implications on debt settlements? YES. On any savings over $600.00 on any particular settlement a person will receive a 1099 statement and any money saved over $600.00 will have to be claimed as income unless the persons losses for one year are greater than the gains. Meaning if when tax time rolls around a person shows a negative margin on their earnings, for more information on this matter we should consult a licensed tax broker.

Can we be sued, have wages garnished, property attached to? YES. Any creditor has the right to the assert legal action to claim money owed. When we sign our contract agreement we give the credit company or companies the right to do so. If any debt relief agency tells anyone none of the above can happen, they are lying. Some individuals are very lucky, and never even get a phone call from a creditor or a collection agency and have the statue of limitations expire on their debt. I believe everyone must be aware of these possibilities before pursuing settlements on their debt.

So far we know of the fees that will be accumulated on our debt if we discontinue our payments to our creditors, what will happen to our credit reports and scores, the tax implications of debt settlements, the legal implications. Do we really need someone not telling us all this? If I were looking for debt relief help more specifically debt settlement I would like to hear all these little nasty details before deciding to negotiate on my debt. I would be able to sleep better at night knowing the consequences that may or may not happen.

Debt negotiation has yielded great savings to many, especially if they are well informed and the debt relief agency they choose to work with is honest and up front. Even with some of these difficulties waiting to happen some of us have no other choice but to seek debt relief, BE SMART and ask questions, if the answers you are getting do not satisfy you, keep searching. The right debt relief agency is out there for you, just look hard enough and you will find it.

By: Eric Gartle

Is Credit Card Debt Settlement the Way to Go?

admin — Sat, 10 Apr 2010 15:59:47 +0000

If you currently face a financial crisis due to unforeseen hardship, you may have considered settling your debt. But, how do you know credit card debt settlement is the right way to go? With careful consideration and planning, it may be the best option to get out of debt.

What Does It Mean to Settle Debt?

You may find yourself paying minimally on your credit card each month, only to find that the next month you owe more than you did previously. It is an vicious cycle caused my high interest rates and late fees. Debt settlement stops this process and allows you to negotiate a lump sum payment to your creditors. However, you must stop all payment in order to get debtors to cooperate with you.

Once you stop payments, your debt settlement company will work out a deal with your creditors. Rather than taking out a loan, you negotiate down what you owe to a reasonable amount that satisfies both parties.

By working with your creditor to repay your loan, you regain their trust and begin rebuilding your credit. Due to the current economic crisis, more and more credit card companies are will to settle with consumers. Remember, debt settlement is only good for credit cards. You may not settle debt for other financial obligations such as students loans, mortgages, or car loans.

How Does the Debt Settlement Company Work?

Typically, debt settlement agencies have a long-standing relationship with creditors and can settle debt quickly. They work on your behalf to settle debt for a lower percentage than what you owe so long as you agree to make monthly payments on time. They are able to negotiate a payment between 35%-50% of the money owed.

The company will charge an upfront fee for services. Once your fee has been paid and you have stopped paying all creditors, negotiations begin. Once you negotiate, you begin redirecting your payments to the settlement companies.

Remember that some creditors will strongly resist settlement. Though you are most likely to settle all debt, some may be more difficult than others to negotiate down.

How Do I Find a Debt Arbitrator?

Finding the right company to advocate on your side may seem tricky. However, by checking references and reviewing compliance on the BBB website, you are sure to find the right representative for your needs. Research several agencies before settling on the right one.

By: Hector Milla

Guide To Debt Settlement Programs

admin — Mon, 15 Mar 2010 14:47:35 +0000

What are Debt Settlement Programs?

Debt settlement Programs (a.k.a Debt Negotiation or Debt Reduction Programs) are debt relief programs that help you negotiate with your creditors to significantly reduce your overall unsecured debt (includes the original debt amount + interest charges and late fees). In layman’s terms, experienced negotiators help you alleviate your debt and pay up only a small portion of your total debt by identifying the best debt settlement program that suits your needs. Most debt companies can reduce your debt from 22% – 55% of your total debt. This allows you to settle your debt much more quickly. This kind of program is perfect for those who want to eliminate their debt in a couple of months.

Most debt settlement companies charge a client 9% – 14% of their total debt.
How does it work?

Step # 1
Decrease your Main Debt amount
Most debt settlement programs start by negotiating your main debt amount. On the average, the main debt amount is decreased by 35 % to 50 %.

Step # 2
Decrease Late fee charges
One of the reasons why debts increase to unmanageable amounts is the accumulation of late fees. In some cases, late fees can be more than the main debt amount. Most Debt Settlement programs work to remove the majority, if not all, of your late fees.

Step # 3
Decrease the APR (Annual Percentage Rate)
Just like late fee charges, the APR can also accumulate and add a whopping amount to your outstanding debt. Agencies negotiate to decrease this fee to a much affordable amount.

Step # 4
Pay the Monthly Settlements
Once your agency has settled the reduction of your total debt you must then make sure that you pay your settlements regularly. Keep in mind that your agency worked hard in reducing your debt to a manageable amount. Missing any payment might cause you more problems than what you had to begin with. The amount you have to settle is based on your current financial situation.

TIME FRAME
In most cases, the debt settlement process takes around 4-8 months. This timeframe, however, is not a strict rule. It can be reduced or stretched depending on the client’s request and capability of settling their account. It is not uncommon to hear that a normal credit card debt settlement can last up to 4 years or sometimes even more.

Why make use of debt settlement services?
Many countries all over the world are slowly waking up to the dangers of paying liberally through their credit cards. In many cases, even students right out of college are accruing debts that seem monumental. Bad debts can seriously affect your creditworthiness, making it almost impossible for you to get loans when you really need it. By availing of the services of a debt settlement agency, you can work out the easiest way to pay off your loans.

One of the best ways to get in touch with the best debt settlement companies is through online services that will give you access to a nationwide network of qualified debt relief providers. These services search the ongoing trends in the debt relief market and give you the best solution based on your unique financial needs. They do not require you to provide them with any secure or sensitive information. In most cases, you will get comprehensive data just by entering your debt amount, state and pin code into their search engines. With services such as these, debt settlement has never been easier.

By: Devendra Mishra

Debt Settlement

admin — Tue, 09 Mar 2010 22:10:25 +0000

The art of negotiating can be applied to anything, many of us are expert negotiators and we do not even know it. When we go out and buy the car of our dreams, we negotiate on its color, tires, stereo and much more. When we buy a house we use the art of negotiation, we look for a discount on the price to pay. It is exactly the same idea behind negotiating delinquent unsecured debt. No program or negotiation company has re-invented the wheel, there is nothing new to how negotiations took place a thousand years ago or how they are done today. The only thing that must be kept in mind is to know about what you are negotiating on. Before buying a car we buy a million magazines and get informed, before buying the house we talk to many different sources. We get informed. The same must be done before we decide to reach settlements on our unsecured debt.

Many debt relief programs are presented in a complex way, it does not have to be that way. Most of us are confused with the rules set up by many of the companies handling these programs. Debt negotiation is quite simple if you have the time. Most of us can save ourselves a huge amount of money if we take our time to get informed. It is true there are many laws to follow when negotiating unsecured debt, but these laws are easily accessible on the internet. Again, most of us would just require time to negotiate or own debt. All of the money paid out front to debt relief agencies is a waste, any money paid in between is a waste also. The only time we should pay any of these agencies is when a settlement is reached on any of our accounts because they actually took the time out to negotiate on it. Why should we pay any money out before anything is actually done?

Keep this in mind. If anyone stops making the regular monthly payments to their creditors the interest rates will go up, late fees and penalties will continue to accumulate until the account is brought back to a current status, we pay our debt in full or we reach a settlement on the amount owed. In the case of a settlement we will be agreeing to pay back a part of the money owed after we have accrued late fees and penalties. If this is the case, why do most debt relief programs place us further into debt by charging us retainer and maintenance fees that do absolutely nothing to help us get out of our debt?

Same as when we buy that new car or that home, we need to research our best options when it comes to finding the help we need to lessen our debt load. Debt settlement programs are not presented properly most of the time, many important details are left out so that prospective clients are not scared off right off the bat. The truth is money can be saved by negotiating unsecured debt, what is often not told are the possibilities of wage garnishment, having property attached to, lawsuits, etc.. If we are behind on our payments with out the advise of a debt relief agency debt negotiation is probably the best alternative, keep in mind the amounts of accounts settled is dictated by how fast funds can be accumulated for settlements.

Negotiations are dictated by funds available, no one will ever settle any account if money is not being set aside. Keep in mind the amount being negotiated on. We cannot set aside $200 a month on $25,000 worth of debt and expect to reach settlements on all accounts, this will be financial suicide. We must set realistic goals, most people usually save anywhere from 40 to 50% off their total debt if all the conditions are met, especially having the funds to settle when the offers come along. Do not be lured by false promises from companies that have nothing to lose on your behalf and get informed before making a decision.

By: Dan Delgado