Debt settlement company » Lump Sum Payment

How to Find a Reputable Debt Settlement Company

admin — Wed, 01 Sep 2010 18:52:40 +0000

Research from the Nilson Group says that households with at least one credit card had more than $10,000 in credit-card debt at the end of 2008. That figure has only gone up as the nation struggles through a weak economy. With the national unemployment rate rising past 10 percent as 2010 began, U.S. residents are relying more on their credit cards to pay their normal living expenses. The problem is, these debts can add up, what with the average interest rate on consumer credit cards standing at more than 16 percent in December of 2009. For many consumers who are overwhelmed with credit-card debt, the best solution might be to work with a reputable debt settlement company.

Such a company will negotiate with your creditors to reduce the amount of money you owe to them. The best companies in this business will be able to reduce your debt dramatically, significantly easing the financial burden that you face. This usually works best when consumers can offer a lump sum payment to their creditors, though skilled debt companies can still provide financial relief even if you can only afford smaller monthly payments.

Before settling their debt, though, consumers need to research the company with which they plan to work. As in any industry, the business of settling debts does have its share of unethical companies. These companies will take consumers’ money and then do little to help them relieve their debt. Or, they will charge them excessively high interest rates and fees. Fortunately, the majority of companies in the debt-settling business operate in an honest and fair manner. It is up to consumers to do their homework first to make sure that they are working with one of these reputable companies. With the power of the Internet, doing this research is neither difficult nor time-consuming.

First, consumers should run an online news search for the name of the debt settlement company they would like to work with. This will turn up any headlines that the company made. If this search turns up nothing, consumers should then check with their local office of the Better Business Bureau. This agency will list any consumer complaints filed against the company. Finally, consumers should always ask a company they are considering to list their rates, terms and late-payment penalties on paper. This way, there will be no unpleasant surprises as the work of paying down debt proceeds.

By: Hector Milla

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

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

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

Is Debt Settlement Legal?

admin — Sat, 10 Apr 2010 01:36:36 +0000

The simple answer to a complex question is YES. Debt settlement is a legal solution used by thousands of Americans to help them avoid bankruptcy. The theory behind debt settlement is very simple: negotiate deals with credit card companies that are mutually beneficial for both parties. This ultimately leads in the credit card company receiving a lump sum payment, and the consumer paying off the entire debt for a percentage of the outstanding balance. The greatest advantage for the credit card company is that they avoid any future problems with collecting on the debt, and any concession made on the creditor’s part is most obviously tax deductible. The consumer is at no time breaking any laws or committing any illegal acts.

So, if the answer is so simple, then why is the question so complicated? The problem with debt settlement is not the legality of the practice, but the ethics of those who practice it, namely debt settlement companies. Unfortunately, a number of unethical debt companies have been found to take advantage of consumers’ financial strife to boost business.

They essentially promise clients unrealistic results and then charge them outrageous administration fees for services they never provide. Thus, we see that legislation is not so much to protect credit card companies, but in fact to protect unknowing consumers. For this reason, a number of states are requiring debt settlement companies to complete forms and register activity with the state’s Attorney General in order for them to be more easily tracked. This helps the government to identify unethical companies in a legal and ethical industry. The idea is to eliminate those companies that have

So, if you are considering joining a Debt Settlement program, relax! What you are doing is legal, ethical, and morally correct; just make sure that the company you chose is also!

By: Scott Wallitsch

Shocking Facts – What Debt Settlement Companies Don’t Tell You

admin — Fri, 27 Nov 2009 01:02:02 +0000

If you’re thinking about using a debt consolidation or debt settlement service to help you get out of debt faster and save money on your monthly payments, make sure you do your homework before choosing a company. There are definitely shams and scams out there.

First let me say that debt consolidation is *not* the same as debt settlement/negotiation, which most people don’t realize.

Debt settlement companies charge hundreds of dollars as an initial “admin fee” to set up your account, plus a monthly service fee. The fees vary depending on the company and the amount of your debts.

Such companies take your money every month, but don’t make monthly payments to your creditors! Instead, they put it in a trust account, negotiate your debts with your creditors, then make a lump-sum payment when there’s enough in your account to pay a creditor in full.

That can take *years* depending on the amount of debt you have with each creditor. Meanwhile, you can be sued by your creditors and your wages can be garnished! (Or just don’t make payments to your creditors. You’ll end up in the same spot without paying someone to help you get there!)

Settlement companies don’t ask your creditors to stop all interest, late fees and overlimit fees from accruing. That means while the negotiations are ongoing, your bills will continue to grow! So if you’re sued and a judgement is brought against you, you’ll owe more money than before!

And shoddy companies, which there are alot of, don’t tell you *any* of this up front. I call it “getting permission by omission” because they simply don’t tell you how their program works *before* you sign an agreement with them. Or after, for that matter. But if you ask the right questions, eventually you’ll figure it out. (Or when the crap hits the fan. Whichever comes first.)

Let me give you an example of how debt settlement works.

Let’s say you have $20,000 in unsecured credit card debt. You owe $10,000 to one credit card company, $6,000 to another and $4,000 to a third. You agree to a 5 year plan where you pay $250 a month to the settlement company. (After all, $250 a month for 60 months is only $15,000, so you’re saving $5,000 and you’ll be debt-free in 5 years, right?)

The admin fee will cost you $750. Your first 3 monthly payments go towards that and nothing gets put into your trust account until your 4th month.

The settlement company keeps $50 of your $250 payment each month for the service fee. That means $200 a month is being added to your trust account.

Most debt settlement companies claim to be able to negotiate your debt for about 50% of what you owe. So let’s use the lowest credit card debt as an example.

If you owe $4,000 and your creditor agrees to accept $2,000 as payment in full, it will take 10 months at $200 per month to have enough in your trust account to pay off just that one credit card.

But remember, your first 3 payments to the settlement company only paid the admin fee. That means your first credit card settlement is 14 months *after* you started sending them money.

So what’s the problem? It’s simple. Your creditor won’t agree to accept half of your actual debt unless, or until, it can be paid in full. Otherwise, you’re expected to make your normal monthly payments.

Since you don’t have $2,000 in your trust account, and you won’t have it until more than a year after you stopped paying your creditor directly, they’ll probably take you to court and request that your wages be garnished long before you have that $2,000 built up.

And what about your other creditors? Well, they’ll be waiting even longer to get their money from the settlement company. The $6,000 debt will take 15 *more* months to pay off, assuming your creditor waits that long and agrees to 50%. And that $10,000 bill? You do the math.

On the other hand, if you signed up for a 3 year plan with the settlement company, your debts would be paid off sooner. But, the question is, will your creditors wait that long? Probably not.

The facts are, you can negotiate with your creditors yourself. Most will agree to take a smaller monthly payment from you and stop all interest and fees from accruing. And, of course, you’ll save thousands of dollars in fees to a settlement company.

Before signing up for any service, please be sure you check out the company thoroughly. And don’t let the words “non-profit” fool you either. Alot of debt settlement companies claim to be non-profit.

Going back to the example above, if you pay them $15,000 over a 5 year time frame and they settle your debts at half of what you owed, they’ll make $5,000 from you. I’d call that a profit, especially since they might not have actually helped you in any way.

Most companies will allow you to cancel your account and get a refund of what you’ve paid, less the non-refundable admin fee and the monthly service fees. If you feel you’ve been mislead about their program, don’t hesitate to argue til the cows come home. File a complaint with the Better Business Bureau or hire an attorney if you feel you’re getting nowhere.

You can visit the Better Business Bureau’s website ( http://www.bbb.org ) and find reports on hundreds of companies. Here’s a small listing of companies that have poor reputations with the BBB:

National Consumer Debt Council LLC – Irvine, CA (A.K.A. NCDC, United Consumer Law Group)

Financial Rescue Services – Burbank, CA

Debt Legal Services – Anaheim, CA

American Debt Relief – Los Angeles, CA (A.K.A. A M Debt, American Debts Relief, Debt Relief)

Please be very cautious when choosing a debt help company and ask lots of questions before agreeing to anything. If you find they’re evading your questions, run fast and run far. There are reputable companies out there, so keep looking until you find one.

By: Denise Hall

How to Take Help of a Professional Debt Settlement Company?

admin — Tue, 21 Apr 2009 21:55:58 +0000

Professional debt settlement company is an easy and effective way to help you get rid of your loan. You can repay your loan faster than expected through the process of systematic settlement of your dues, as it lowers your loan amount to a great extent.

Debt Settlement Is The Way To Go

It is extremely difficult for a debtor to repay a number of loans on his own, not just because of the financial pressure, but also mental anxiety. It is extremely important to plan your finances well in advance, in order to repay your loans comfortably. Normally, in case you have to pay several debts, you may also be liable to pay interests on each of them along with other charges, such as late fees or service charges, etc. This adds up to your loan amount, wherein you end up paying a lot more to your creditor(s) than required.

The process of a professional debt settlement company helps you negotiate with your creditor(s) to settle for a lower payable amount. The interest and other charges like late fees may be deducted from your loan amount; thereby reducing your burden and help you repay your debt much faster. There are a number of companies offering free debt consolidation service for you, in order to help you manage your monthly installments along with your budget. Theses companies primarily analyze your financial status as in your source(s) of income as well as expenditure and loan payments.

Once your financial condition is scrutinized with proper consultation and knowing about your repayment capacity, the professional debt settlement company then chalks out a plan for you, wherein your income and expenditure are balanced along with your monthly installments. In addition, your numerous monthly installments are clubbed into a single monthly payment, such that your payment is lowered to great extent. You can either opt to pay your loan amount as single lump sum payment or in monthly installments. You can avail the online debt consolidation program as well, wherein you can get professional help at the comfort of your home.

Take Intelligent Steps For The Financial Freedom

Nevertheless, you must be vigilant about certain mandatory facts before you get into the process of professional debt settlement company. If you decide to pay a lump sum amount, make sure you have your finances ready on time and can manage your budget as well. Also, ensure that your loan amount is lowered substantially with no interest or other charges, so that you get the best deal possible. If you choose to make monthly payments, you must make certain that you can comfortably manage your monthly expenditure along with your installment. Once you are through with your plan, you can repay your debt comfortably and sooner than anticipated. A significant aspect to take care is that, you should see to it that the professional debt settlement company you are working with should present your case in such a way to the creditor that it does not affect your credit record; thus ensuring you are on a safe way to debt recovery.

By: Andrina James