debt consolidation
Should I File Bankruptcy Or Is Debt Settlement A Better Alternative?
When personal debt reaches the kind of level where you just cannot see how you could ever be debt free again, many people think that bankruptcy is their only option. While bankruptcy is a way of ending a very serious debt situation in a relatively short period of time, it is an extremely serious step to take, with drastic and long lasting consequences. These include losing control over all your assets and possibly losing your home, having your bankruptcy publicised in the press, difficulty getting credit or even opening a bank account and not being allowed to work in certain professions.
For most serious debt situations, bankruptcy is not the only option, and consideration should at least be given to the alternatives before deciding to file for bankruptcy. In the US, the most common solution used as an alternative to bankruptcy is debt settlement. In the UK the main alternative is what is known as an IVA. I shall explain how these work, but they are both ways of eliminating very serious debts without the lasting consequences of bankruptcy.
Debt settlement has had some bad press recently, but only because of a small number of unscrupulous companies. It is an area of work where vulnerable people can be exploited, and this has proven too hard to resist for some organisations. However, there are plenty of reputable and reliable companies too, and when debt settlement is done effectively it can wipe out more than half of your debt, making it possible to repay the rest.
The process of debt settlement is one in which a skilled debt negotiator approaches all your creditors with view to agreeing deals to settle your debts for much less than their full value. The incentive for the creditor to settle is that the remaining amount can be paid back all at once or very soon. Getting huge discounts is not easy and not a matter of luck. The debt settlement companies understand the processes that each creditor goes through and they know how to time their approaches just right to maximise discounts.
While your negotiator is working away at your creditors, you will have stopped paying them any money and will be putting it away in a new account instead. This is saved up and used to pay creditors when settlements are made. The time is takes to reach agreement can vary enormously, depending on many factors, but the settlement process will typically take between two and four years.
In the UK, debt settlement is not offered as a service in the same way as it is in the US, because there is a government scheme called an individual voluntary arrangement (IVA), which achieves the same result. With an IVA you make payments of an agreed amount, which goes towards your unpaid debts, but after a set period of usually five years, your remaining debts are written off. This scheme was specifically set up as an alternative to bankruptcy, and is a very effective way of ending a serious debt situation without the consequences of bankruptcy.
If you approach a good debt settlement or IVA company, they will give you straight advice and tell you if you would be better off just filing for bankruptcy. If your situation is that serious, then you should at least approach a specialist company and see whether they can offer you an alternative solution or not. You must be careful to ensure you only approach reputable companies that will give you honest advice though, otherwise you may end following a course of action that leaves you with even more debt.
Unless you are prepared to undertake a lot of research yourself, the easiest way to narrow down your search is to follow recommendations for companies that are known to be reputable and well established. If you start with a list of companies that have a long history of having already sorted out the debt problems of many people, you can approach perhaps three of them and make a comparison between their suggestions and recommendations. The application process will give you a feel for each one and you can go with whichever you feel confident about.
Article Source: http://www.articlesbase.com/debt-consolidation-articles/should-i-file-bankruptcy-or-is-debt-settlement-a-better-alternative-1233681.html
About the Author
Read reviews and recommendations for the most reputable debt settlement companies and a list of the top IVA UK companies. K D Garrow has worked as a senior manager with significant financial responsibility for the last twenty years. His Debt UK/US website offers free, unbiased advice on a range of debt related issues, including debt consolidation, loans, bankruptcy, and budgeting.
Debt Settlement Comany Vs. Settling on your Own
Before seeking debt settlement, there are a few things you need to know. Once you have decided to go through with it, then you need to make sure that you are aware of the costs involved in going through a debt settlement company or seeking debt settlement on your own.
Debt settlement is for those whose debt is no longer with the original creditors. However, if the debts are old, you may not want to even attempt debt settlement because you will no longer be legally accountable for them after a certain number of years. If this might be the case for you, contact an attorney’s office to determine if you could still be held liable for the debts.
Debt settlement allows you to pay an amount less than your owe to your creditors. Because they collection agencies paid less than the full amount to acquire your debt, they are willing to get whatever they can out of you. To avoid having to deal with the collection agencies themselves, many want to go through a debt settlement company.
Once you have determined that you do need to attempt debt settlement, you need to become aware of what debt settlement companies offer. These companies will allow you to pay them a monthly payment to hold until you have enough to settle your debts. There are several problems with this. Not only is the debt settlement company charging you huge fees to take care of your debt settlement, they also cannot keep you from the complications of your debt as you seek to pay the monthly payments to them (usually for three years). During that time, collection agencies will continue to contact you wanting you to pay up, and they can even seek legal action against you in the form of a judgment.
By the time you have completed the process with the debt settlement company, you have paid thousands of dollars more to get the debts paid off than you would have on your own. The debt settlement company is unable to get any better deals than you can on your own.
The costs of using a debt settlement company far outweigh the benefits. If you are in need of debt settlement, don’t use one of these companies.
Article Source: http://www.articlesbase.com/debt-consolidation-articles/debt-settlement-comany-vs-settling-on-your-own-183887.html
About the Author
Ronnica Rothe is a graduate with honors from the University of Oklahoma and a current student at Southeastern Baptist Theological Seminary. She works with stopccdebt.com to help individuals get out of debt and reach their financial goals.
What Happens to my Credit in a Debt Settlement Program?
In determining what effect a Debt Settlement program will have on your credit it is important to know what your credit score currently is. There are very few people with debt trouble that have near perfect credit scores to begin with. It is a fact that Debt Settlement programs generally have a negative effect on your “FICO” score. Although as the Debt Settlement program nears completion and your debts are satisfied your score will begin to improve again. This happens because you are becoming debt free. It is my recommendation that you should not apply for any new credit while going through a Debt Settlement program. It just doesn’t make any sense to take on any new debt while trying to satisfy your existing debt issues.
If you are concerned with your credit score and the negative effect a Debt Settlement program will have, it is important to reflect on what you credit score is currently doing for you. Have you tried to apply for any new credit? Have you applied for a consolidation loan through your bank? Have you applied for a Home Equity Line of Credit? If you have applied for any of these recently you have probably been denied, either for your low credit score or your high debt to equity income ratio. At this point your credit, if it’s high, isn’t doing anything but holding you back from tackling your debt issues. You can rebuild your credit, a Debt Settlement program is not permanent on your credit score like a bankruptcy. Believe it or not credit card companies have a very short term memory and they will most likely extend credit to you again in the near future.
Article Source: http://www.articlesbase.com/personal-finance-articles/what-happens-to-my-credit-in-a-debt-settlement-program-1416430.html
About the Author
Adam Sthay is a founder and owner of Square One Debt Professionals out of Brea, California. www.squareonedebtprofessionals.com (877) 702-9112.
How to Find a Reputable Debt Settlement Company
In today’s tough economy many consumers are finding it increasingly difficult to pay their minimum monthly credit card payments. In response to this trend there has been a drastic increase in the number of Debt Settlement Companies opening up for business. With so many new companies offering to help settle your debts how do you choose which company to use? How do you know you are dealing with a reputable Debt Settlement Company and not a scam artist?
It is important to perform some level of due diligence when choosing a company to help settle your debts. The first place you should look as a consumer is on the TASC website. TASC stands for The Association of Settlement Companies, www.tascsite.org. TASC is a non-profit organization who’s “goals are to promote good practice in the debt settlement industry, protect the interest of consumer debtors, and lobby on behalf of debt settlement companies on the federal and state level.” When a Debt Settlement Company is member of TASC they agree to perform business with the standards set out in the TASC bylaws. “The Bylaws have been developed in consultation with a number of debt settlement companies, discussions with different states’ legislators, and major lenders. The aim of the Bylaws, and that of TASC, is to encourage debt settlement companies to provide services of the highest standards to ensure the public and the credit industry’s confidence.” There are currently roughly 2500 Debt Settlement Companies in the country, only 197 of these companies are members of TASC. If you choose not to do business with a member of TASC you will be dealing with a company who is flying under the radar.
Once you have verified that the company is a member of TASC, which you can do so by visiting their website, you should also know the answer to the following questions. Does the Debt Settlement Company hold your money for the settlements? Debt Settlement Companies should never hold your money for you. Your money should be held in a personal checking or savings account or in a special purpose account set up in your name, not in the Debt Settlement Companies name. This is important because you should always be in control of your money. The account should also be FDIC insured.
How long is your program? On average you should try to get out of debt in 24-36 months, no longer than 48 months. If a Debt Settlement Company is offering to get you out of debt in less than 12 months be cautious. Also if they are offering a 60 month term or longer be cautious.
How will this program affect my credit? Debt Settlement will have a negative effect on your credit score. If any company tells you any differently they are lying to you.
What are the legal consequences of settling your debts? Creditors do have a legal right to sue you for failing to pay your debt. This doesn’t happen very often but it is a possibility that you should be made aware of. If a company tells you any differently you should not do business with them.
Besides being a member of TASC the debt specialist you are speaking to on the phone should be IAPDA certified. International Association of Professional Debt Arbitrators, www.iapda.org. On this site you can type in the sales reps last name and you will be emailed within 24 hours letting you know if that person is an active member of IAPDA. “The IAPDA training and certification program is dedicated to serving its members by defining and validating the profession of Certified Debt Specialists through practical industry knowledge, debt and credit education and by certification of professional successfully completing the program.”
I own and operate a very reputable Debt Settlement Company called Square One Debt Professionals, www.squareonedebtprofessionals.com. I can’t tell you how many people I speak with on a daily basis who have recently been ripped off by a shady company that was more interested in charging the customer fees than helping them get out of debt. I hope that by reading this article you will find it a little easier to find a reputable Debt Settlement Company that will in fact help you in your time of need.
Article Source: http://www.articlesbase.com/debt-consolidation-articles/how-to-find-a-reputable-debt-settlement-company-1412294.html
About the Author
Adam Sthay, a native of Hawaii, is a founder and owner of Square One Debt Professionals out of Brea, California. www.squareonedebtprofessionals.com
Debt Settlement program means negotiating over the price of a purchase
Debt Settlement, also known as debt negotiation, is a form of debt consolidation in which the debt settlement company consolidates, and negotiates all your unsecured debts for a low flexible payment. Debt relief has become a major concern for many americans now a days, many people are being driven to use credit cards as extended income. Debt Settlement has a negative side where in numerous calls are made by collection companies to collect the debt. There are many debt settlement companies available at your disposal now a days but it is vital to know which is the right company. It works when a client stops making payments to his creditors. You will find most debt settlement program suggesting you to stop any communication with the creditors, where as creditors on the other hand dont stop calling you, harassing you all the time until they are paid or some legal action is taken.
The error that people make when paying off their credit card bills that result to rising credit card debts. When you are using a credit card, it is very easy to think you have limitless amount of money. If you pay less i.e only the minimum balance, your creditors could care less for the reason that they will be getting a fraction of interest on that. But this never happens.
Here are the question we would like to ask: -
do you want to avoid bankruptcy?, Do you have more than $5k in credit card debt?, Do you want to finally find within 6-8months, a final closure to your debt by negotiating the final amount owed for only 50% to 20% of the original balance?, Do you want to rebuild your credit between 24 to 30months from the settlement date at or before charge off vs. the 10year bankruptcy mark on your credit? If the answers to the above questions are Yes then Debt Settlement Negotiation provides reliable customer service providing constant contact with every client from their customer service representative.
We are using a new ways which can help solve you the above problem. It allows for calls to be asap routed to a law firm and forward calls to appropraite debt settlement company. You will be guided through establishing a savings account that will be build every month until enough money is saved to make a full payment to you creditor
People need to be comfortable with the Debt Settlement Companies which are going to work with them. You can no longer afford to wait anymore to move on the right track with your family and business in financial stability. Doing business with the expensive debt management program has a negative effect which could get back on you. Rebuilding and restoring credit after debt settlement program is complete does not take all that long if the appropriate steps are taken. The client should consider credit repair to remove any inaccurate derogatory information.
Debt Settlement Companies specialized in reducing all types of unsecured debts such as Credit Card Debts and other bills by the method of Debt Negotiation and Debt Settlement, this way you avoid the creditors calls as we take care of them through a well planned Debt Settlement program. We offer you: Bad Credit Card Debt Settlement, Credit Card Debt Settlement and Credit Debt Negotiation. Our job is to eliminate all of your debts without you having to file for bankruptcy.
Article Source: http://www.articlesbase.com/negotiation-articles/debt-settlement-program-means-negotiating-over-the-price-of-a-purchase-1417770.html
About the Author
Kelvin working as a seo for Debt settlement program. Debt settlement program or Credit Card Debt Settlement and Debt Negotiation program is most convenient strategy to help you achieve financial freedom and a debt-free Business
Shocking Facts – What Debt Settlement Companies Don’t Tell You
If you’re thinking about using a debt consolidation service debt settlement or to help get out of debt faster and save money on your monthly payments, make sure to do your homework before choosing a company. Definitely there are frauds and scams out there.
First let me say that debt consolidation has not the same as negotiating the settlement of the debt that most people do not realize.
Business debt settlement charge hundreds of dollars as a down payment “admin” to configure your account, plus a monthly service fee. Rates vary depending on the company and the amount of their debts.
These companies take your money every month, but not make monthly payments to your creditors! Instead, they put in a trust account, negotiate your debts with your creditors, then make a lump-sum payment when there is enough money in your account to pay a creditor in full.
That can take * years * depending on the amount of debt to each creditor. Meanwhile, you can be sued by its creditors and wages can be garnished? (Or not making payments to your creditors. Will end in the same place without having to pay someone to help you get there!)
Settlement companies do not ask your creditors to stop all interest, fees and overlimit fees from accruing. That means that while negotiations are ongoing, their accounts will continue to grow! So if you’re sued and a verdict against you, you owe more money than before!
And shoddy companies, which are a lot of, do not tell you * any * of this up front. I call it “getting permission by omission” because they simply do not tell us how their program works * before * you sign an agreement with them. Or after, for that matter. But if the right questions, eventually you find out. (Or when the shit hits the fan. What comes first).
Let me give an example of how the debt settlement.
Say you have $ 20,000 in credit card debt unsecured. You need $ 10,000 to a credit card company, $ 6,000 and another $ 4,000 to a third party. 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 be debt free in 5 years, right?)
The administration fee will cost $ 750. The first 3 monthly payments that go to and nothing is put in his trust account until the 4th month.
The settlement company keeps $ 50 of your payment of $ 250 each month for the service fee. That means $ 200 a month has been added to your escrow account.
Most companies’ debt claims to be able to negotiate its debt by approximately 50% of what you owe. So let’s use more credit card debt as an example.
If you owe $ 4,000 and your creditor agrees to receive $ 2000 as payment in full, it will take 10 months at $ 200 per month to have enough in your escrowaccount to pay only a credit card.
But remember, the first 3 payments to the settlement company only paid the administration fee. This means that your first credit card settlement is 14 months * after * they began sending money.
So what’s the problem? It’s simple. Your creditors will not agree to accept half its actual debt unless, or until they can be paid in full. Otherwise, you are expected to make their normal monthly payments.
Since you do not have $ 2,000 in your trust account, and will not until more than a year after he stopped paying your creditor directly, they’ll probably take to court and ask that their wages be garnished long before $ 2,000 that have accumulated.
What about your other creditors? Well, we’ll be waiting longer to receive their money from the settlement company. The $ 6,000 debt will take 15 * more * months to pay, assuming your creditor expects long and agrees to 50%. And that $ 10,000 bill? Do the math.
Moreover, when you subscribe to a plan of 3 years with the company agreement, their debts would be paid faster. But the question is, will your creditors wait that long? Probably not.
The facts are, you can negotiate with your creditors yourself. Most would agree to take a small monthly payment from you and stop all interest and fees from accruing. And, of course, will save thousands of dollars in fees to a company in liquidation.
Before signing up for any service, please make sure you check out the company thoroughly. And do not let the word “profit” fool you. A lot of debt settlement companies claim to be nonprofit.
Returning to the example above, if you pay $ 15,000 in a frame of 5 years time and they settle your debts at half of what was, will the $ 5,000 you. I would call it a benefit, especially because they might not have helped in some way.
Most companies will allow you to cancel your account and get a refund of what you paid, less the non-refundable administration fee and monthly service charges. If you feel you have been misled about its program, do not hesitate to argue til the cows come home. File a complaint with the Better Business Bureau or hire an attorney if you feel you are getting nowhere.
Article Source: http://www.articlesbase.com/debt-consolidation-articles/shocking-facts-what-debt-settlement-companies-dont-tell-you-1507440.html
About the Author
For more info please visit our site @ www.debtsettle.org
Put an end to collection calls – Contact a Debt Settlement Company
Are you mired in debt and annoyed with the collection calls from the creditors? Do you think no one can save you from this financial crisis? All your worries stop at one place and that’s a reputed and reliable debt settlement company.
You can resort to the debt management service providers. If you are seeking debt settlement in the USA, you can easily find a debt settlement company with its branch on the net. Many of the reputed debt management companies operate through their net branch where you can find the list of debt settlement services offered by them. You just have to contact them to avail their services. Taking the help of a debt settlement service provider is beneficial for the debtors in many ways.
The debt management company will first of all provide you with respite from the maddening collection calls. They forward every incoming call for you from the creditors to their executives who talk to the creditors on your behalf. This way they save you from attending to harassing calls and answering the repetitive questions regarding the payment of the debts.
These service providers negotiate with the creditors to smooth the progress of paying off for you. Since they share a good rapport with most of the prominent creditors, it’s easy for them to negotiate with them. Generally, creditors don’t want to face bad debts. The negotiators provide the creditors with an escape from bad debt while providing debt relief to the debtors. They help you mitigate your debts by either getting the final payable amount reduced or the term of the payment extended for months or sometimes even years.
The debt settlement service providers not only help the debtors pay off their debts but also help them have a solid financial condition. The back end service providers provide the debtors with the right education and counseling about the better ways of managing their finances. They counsel them about the different ways to save money and invest it for better returns. Once they have gained enough understanding of efficiently handling their money matters, it’s easy for them to keep their finances in control and avoid financial crisis in future.
Article Source: http://www.articlesbase.com/debt-consolidation-articles/put-an-end-to-collection-calls-contact-a-debt-settlement-company-1741258.html
About the Author
Author Bio: I am the webmaster of Settlement Corporation of America http://www.settlementcorporation.com – a Debt settlement company working in affiliation with various Debt Settlement Branch.
Credit Card Debt Settlement! Is It A Scam Or Can It Work?
I have been working in the credit card debt settlement industry for over a decade now and have been working in the financial industry for over twenty years. My mission with writing this article is to offer debtors a heads up on credit card debt settlement companies also known as debt negotiation companies. I will provide you with the advantages and disadvantages of a credit card debt settlement program and what to look out for when speaking with a rep from one of these organizations to help you get out of debt. Before continuing I want to inform you that this will be somewhat of a long article and by the conclusion of it my goal is for you to understand how the debt negotiation/settlement process works in case you don’t already know and I would like you to fully comprehend the techniques of companies out there that do not honestly have your best interest in mind.
For starters I would like to say up front that this process of debt settlement as your means to consumer debt relief isn’t for everyone, some debtors are more suited towards bankruptcy and others simply don’t have the proper state of mind to go through this method.
A great place to start is for me to offer you the understanding of what debt settlement is and how it works. The intent of a debt negotiator is to work out a debt settlement for you on the current debt balances you owe towards your creditors. As an example you might owe one particular creditor $10,000 so the goal of the negotiator would be to have you end up paying back no more $6,000. The two primary advantages of completing this program are to save money on what you currently owe your creditors and to save time. By merely continuing to pay just the minimum payment with even a moderate APR you will be looking at somewhere around thirty or more years to finally become debt free, with a reliable credit card debt settlement program you will be out of debt within two to three years or sooner depending on your present financial state of affairs and how much you can afford to set aside each month.
Now you must realize these are tremendous benefits but as with most things in life there are drawbacks, not a single thing in this world is perfect and a credit card debt settlement program isn’t any different. First off your creditors won’t be willing to work out a debt settlement whatsoever if you are current and up to date with your monthly minimum payments. They would like you to remain on their credit treadmill for the next three plus decades and pay them well over five times the original balance in interest alone. So you need to fall past due on your payments to place the creditors into a position where they will be willing to negotiate a settlement. After you cease paying them the ball game quickly changes and they will then be significantly more open to talking in the terms of negotiating a settlement.
Without really having to say, for some folks the starting point of this process will have an adverse effect on their credit rating; for people who have already fallen behind the negative effect won’t be any different than it already is. The unfortunate thing is for some debtors this will be the deterring factor that prevents them from entering into debt settlement making them a financial servant to their creditors for the next three decades. On a positive note this negative effect doesn’t have that long-lasting of an effect, in fact once the settlements get worked out your credit rating will begin to rebound and increase in score. This is because more than 30% of your credit rating according to MyFICO is made up by how much debt you owe. However if you are trapped in a terrible debt situation even if you are up to date with your payments your score is more than likely not all that good to begin with, and besides when stuck far in debt your priority should be set on how to escape this debt problem as rapidly as possible, not on your capability to accumulate more debt.
Now by falling past due on your monthly payments you must realize that these creditors aren’t just going to roll over and play dead, they will be attempting to call and collect the debt. Some people don’t find this to be a problem whatsoever, but for others it may be, hence why I stated in the second paragraph this process won’t be for everyone and the debtor must be in the proper mind set. From my years of assisting debtors there is no rhyme or reason to how many calls you will receive, some clients of mine rarely get calls while others receive them on a daily basis. Something to remember is that no company has the power to by law stop the calls, so any organization that tells you they can is strait up lying. Only a law firm handling the negotiation process has the power to stop the third party collectors.
As you can now tell, like I said earlier there are advantages and disadvantages, but if you can deal with the disadvantage’s you will be quickly on the path to financial freedom and will save a large amount of cash in the process. Now to get to the meat of the matter and why I titled this article “credit card debt settlement scams”.
We here in the United States over the last few years have been going through an extremely negative downward spiral with our economy. Thus placing many consumers in a compromising position financially, leaving boat loads of people left holding the bag with large sums of credit card debt. So understandably this opened up a much bigger market for credit card debt settlement. A lot of fly by night companies have been sprouting up all over our country, tons of which are ex mortgage brokers who offered unwary consumers awful mortgages and helped force them into this nightmarish position in the first place. Now I use the word scam which can take on a couple meanings, while yes there are some companies out there that are outright scams and have no intention of doing any work for you at all, most of the times that is not the case. The problem lies when companies simply do not give prospective clients all the facts on how credit card debt settlement works nor do they truly place them on a plan for success, which I will get to in a minute.
One usual problem that many debtors have with debt settlement companies is they don’t fully disclose to them about how the process works in detail both the good and the bad, instead they sugar coat things and just go on and on about the tremendous benefits of saving money and time. I have talked to numerous amounts of debtors who have enrolled with companies and had no idea they would be falling behind with their creditors and will be receiving collection calls. So needless to say this turns into a big problem once they begin the process.
Another bad habit tons of these companies have is deceiving consumers into the amount of savings they will be receiving on their debts. Some companies are claiming to save you more than 70% of what you currently owe. Now while occasionally they may get settlements this low what their choosing not to inform you about is how much you will be saving once you have A) paid them their service fees, and B) paid back the creditors. Honest and reputable companies will quote you on what your true total savings will be. If you will save somewhere between 40-50% of what you owe including their fees and paying the creditors than that is very good. One more deception is many of these companies will try and guarantee a definitive amount of savings, if you hear this run for the hills. NO one in this industry can honestly guarantee a certain amount that is why it is called DEBT NEGOTIATION! They are negotiating to get a settlement for as low as they can get.
Then there are the organizations who will allow you to pay however much you can to get enrolled into their program. These are the worst because they do not honestly have your best interest in mind and are fully aware that they are setting you up to fail and not succeed. You must realize to obtain the kind of savings I mentioned above this program should last no more than 36 months, ideally two or less. And the bottom line is some debtors realistically cannot get the program finished in that time frame and should seriously be looking into bankruptcy. What these un-reputable consumer credit card debt settlement companies will do is place you on a plan for 4 or more years and basically take whatever payment you can afford. With full understanding that you aren’t going to be saving much of any money and will more than likely not graduate the program, all they are concerned with is collecting fees and that’s all. An honest company will meticulously review your budget with you and ensure you this is a plan that you can manage, as well as completely explain to you both the advantages and disadvantages of doing this. And allow you to make the choice as to whether this is the most ideal consumer credit card debt relief method for your current financial state of affairs.
One more extremely good way to research a company is to make sure they are a registered member with the BBB (Better Business Bureau) and that they are in decent standings with little to no complaints. And if there are complaints make sure they were resolved to the clients liking.
As I mentioned above I have been in this industry for over a decade now and currently I work for an outstanding debt settlement law firm with an amazing track record and an outstanding record with the BBB. If you would like an honest evaluation of your current debt situation to see if this is the correct plan of consumer debt relief for you than click the link below in the signature file and fill out an application. I will explain in tremendous detail how this program works and whether you are an ideal candidate. I hope after reading this article you feel more educated and enlightened as to how this process works and what to watch out for when you are interviewing companies to potentially assist you with credit card debt settlement.
Article Source: http://www.articlesbase.com/debt-consolidation-articles/credit-card-debt-settlement-is-it-a-scam-or-can-it-work-1939214.html
About the Author
Stephen Bis works as a research analyst and debt counselor for the nations largest credit card debt settlement law firm. The firm helps consumers make an educated and responsible decision on how to handle their debt situations.
How Can A Debt Settlement Attorney Benefit You?
If you are reading this article because the title caught your attention than chances are your stuck in a pretty deep financial rut; with the majority of your financial problems stemming from an overwhelming amount of credit card debt. If so do not feel bad or embarrassed right now there are millions upon millions of people all across America who are stuck deep in credit card debt. In this article I would like to present to you information concerning how a debt settlement attorney can really help you to get this mess figured out and put behind you.
There is also a good chance that if your reading this article you are either already falling behind on your credit card payments or are on the verge of doing so. In order to achieve a debt settlement you are going to have to fall behind if you haven’t already, there is no way around this.
Before continuing to go further with what a debt settlement attorney can do for you I would like you to understand why the creditors will not settle with you when you’re current.
If you are current with your monthly minimum payments and pay them their high interest each month why in the world would the creditors offer to settle your account for less than what you owe? They have no reason too, they have you precisely where they want you; stuck running on their “credit treadmill”. This vicious cycle is the minimum payment scheme at high interest; where you will be stuck in debt for over 38 years and pay back well over five times the original balance in interest alone.
So you must fall behind and unfortunately this is where many people will instantly be turned off from debt settlement and therefore dooming themselves to being financial slaves to their creditors for decades to come.
Debt settlement does offer some amazing benefits such as saving a tremendous amount of money and time; however the negative side affects of falling behind are real and you should be made aware of them.
But there is good news! A debt settlement attorney has the legal power to greatly reduce the negative effects of falling behind so you can still pursue debt settlement. Continue reading and I will explain the negative affect from falling behind and tell you how a debt settlement attorney can help alleviate that problem.
For starters you must realize your credit score will be negatively affected and this is something that no one but yourself can help to fix, no attorney, no company, only yourself. The initial process of falling behind on your payments is what will cause the detriment to your credit score. Thirty five percent of your score is made up of your payment history and this will take a negative hit. However after a few years this negative affect no longer holds the same value, reason being your credit score itself only reflects the past two years of your payment history.
Another thirty percent of your score is your debt to credit ratio. This is where debt settlement will help your score. Once you clear out your bad debts this ratio becomes a lot more favorable and will help your score to rebound. But if you are stuck deep in debt ask yourself what’s more important, finding a way out of debt or maintaining your ability to accrue future debt? And in many cases if you are stuck deep in debt even if you are still current your credit score will still be very low. Like I mentioned above your debt to credit ratio is thirty percent of your score is very negatively affected when you owe large sums of credit card debt. So the number one priority should be finding a way out of debt!
Now back to other affects of falling behind and how a debt settlement attorney can help.
One major inconvenience of falling past due is that the creditors will be calling you in an attempt to collect the debt owed. With this process the original creditor will hold onto your account in the beginning stages of you falling behind and by law has the right to contact you and nobody can stop that. However not long into the collections process they will hand the debt over to a third party collection agency. This is where a debt settlement attorney can step in and have the calls by law stopped, at this point they will only be able to deal with the law firm and are supposed to cease calling the client. This is according to the FDCPA (Fair Debt Collections Practices Act). Thus greatly alleviating the stress a debtor will go through when using debt settlement.
This is one nice benefit that a debt settlement attorney has over a standard debt settlement company. A debt settlement company has no legal standing to stop the calls from either the original creditor or the collection agencies. And any company that claims they can should raise an instant red flag to you!
Perhaps what scares people the most about falling behind on their credit card bills is the chance they will be sued. While this is a legitimate concern let me state that it is not the mainstay of the creditors. Simply put it costs them too much money and time to bring someone to court with no guarantee that they can collect the money. However it is a real possibility and whenever making any large financial decisions it is best to have all of your bases covered.
The benefit of having a debt settlement attorney if you were to get sued is that the attorney still has the legal right to contact the collectors’ opposing attorney and negotiate a settlement. In the vast majority of cases the attorney can keep their client from ever stepping foot in court and get the settlement all worked out from outside of the courtroom. Thus benefiting all parties involved, it is much easier for them to work out the settlement with a reputable attorney and know for a fact they will be receiving some kind of compensation for the debt; instead of spending money and time taking you to court with the chance they will never receive a penny.
There is also an issue that does not get brought up very often and this is “full disclosure” and attorneys must offer potential clients full disclosure to the debt settlement process. They have the State Bar to answer too and cannot mislead clients and not explain to them in detail how this process works. Then must fully review your personal unique financial situation to ensure this is the best possible debt relief solution for you.
Many unscrupulous debt settlement companies simply preach the benefits of debt settlement and never fully disclose to their clients the potential downfalls. This is what often times gives the debt settlement industry such a bad reputation.
I know I have been pretty much discussing the bad aspects of debt settlement but I feel that it is important for people to understand the whole process before enrolling with any company or attorney. But the reality is debt settlement has been helping millions of people find financial freedom again by helping them to regain control of their finances by breaking free from the shackles of credit card debt. The fact remains there is no other method of debt relief available that will help the debtor to save as much money and get out of debt as quickly, other than bankruptcy; which has a much worse affect on the credit and also stays a public record for life.
I hope after reading this you now feel more enlightened and can see the benefit of using a debt settlement attorney if you are stuck in a dismal situation with credit card debt. I welcome the opportunity to personally review your situation to see if you may benefit from the process, if you would like more information simply follow the link below and fill out an application.
Article Source: http://www.articlesbase.com/debt-consolidation-articles/how-can-a-debt-settlement-attorney-benefit-you-2041375.html
About the Author
Stephen Bis is research and debt analyst for the largest debt settlement law firm in the country. A nationwide firm that has a debt settlement attorney in every state.
Lump Sum Debt Settlement Letter – What It Should Look Like
A lump sum debt settlement letter will give us a better chance of obtaining a larger discount, a well written and well formatted letter will go a long way. There are many examples of settlement letters on the net, I will explain what this letter should look like.
Before we reach the stage of sending a settlement letter we have had many discussions with our original creditor or collector and have a feel for what we think they will accept. As I said before a lump sum letter carries more weight than a letter proposing to pay in installments. A letter offering to settle unsecured credit card debt should be formatted in the following fashion:
- The current date.
- Your complete name as it appears on the credit card.
- Your current address.
- The name of the company or agency whom we are sending letter to.
- Address of company or agency we are mailing letter to.
- Original account number we are sending letter about.
- Body of letter. It should look something like this:
XYZ creditor or collection agency,
In an effort to save all of us a great deal of time and expense I´m offering to settle this account for $x,xxx.xx in one lump sum payment due on 7-15-2010.
If you accept my offer, please send written confirmation to my PO Box address. Once I receive your written confirmation, I will make payment to your organization by phone. However, please understand that I will not make any payments until receiving written confirmation that you accept my offer.
Sincerely,
XXX XXXX
This letter is precise and to the point, it is not complicated to write or to amend; changes can be made to it depending on the situation. Nevertheless this is the model to follow when writing to a creditor or collector when offering a lump sum debt settlement.
Article Source: http://www.articlesbase.com/debt-consolidation-articles/lump-sum-debt-settlement-letter-what-it-should-look-like-2114505.html
About the Author
Dan Delgado is an active unsecured debt negotiator, he has Ten years experience negotiating personal as well as business debt. For more debt related articles please visit our blog.
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