Most people don't know it, but a bad or shady debt reduction company can actually land you in a worse spot financially than you were in the beginning. In fact, in many cases filing bankruptcy is preferable to working with a credit counseling company. Given the amount of confusing information out there, it is critical that you arm yourself with the truth about these businesses. WARNING: Credit Counseling Isn't Always What It Appears When you first start out, you go over all your debts with a counselor. They contact each of your creditors to lower your interest rates, which lower your payments. Together, you develop a strict budget. They hold you to this budget by asking for one lump payment from you each month, which they then use to pay your bills on your behalf. Unfortunately, this sunny scenario hides the real truth. Yes, for a fee, credit counselors will ask your credit card companies to lower your interest rates-but you can do that yourself. Yes, for a fee, they will help you develop a budget-but you can do that yourself. debt consolidation Yes, for a fee, they will take one large payment from you each month and use it to pay some of your bills-but you can do that yourself, too. In fact, you can do it better. When you're in debt, the last thing you need is a credit counseling agency charging you high monthly fees for performing tasks that you can do yourself for free. Otherwise, any savings from lower interest rates is quickly lost in new fees for your credit counselor. Does that sound like good financial advice? Driven By Client Successes, Or By Personal Profits? Years ago, a small number of newly created credit counselors actually made a positive difference in the lives of their clients. Before the industry exploded, many credit card companies considered professional credit counselor to be a step in the right direction. Creditors were willing to lower interest rates and make other compromises to help customers in counseling to get back on track. No longer. Sadly, today's credit counseling companies exist to create profits for their owners-not to help customers get out of debt. In fact, some debt reduction companies are not actually dedicated to helping consumers with debt management plans at all; rather, they serve as fronts for bankruptcy attorneys or home equity mortgage brokers. Don't be misled into believing that a non-profit credit counselor is better than a for-profit one. In fact, recent federal investigations have revealed that many of these non-profit companies are actually owned by the same people who own their for-profit "competitors." The credit counseling industry is unregulated, meaning there is no set of central standards that companies must follow. Once the shady credit services opened their doors, the credit card companies closed theirs. debt consolidation In fact, it is now harder than ever to get credit card interest rates lowered. Credit counselors, not credit card users, are to blame for this situation. It All Adds Up... To Even Higher Bills Specific debt consolidation companies have specific guidelines as to what their clients are and are not allowed to do. For example, some companies do not allow you to open any new credit accounts under any circumstances. If the family car finally breaks down, you may not be allowed to get a new vehicle. The average debt reduction plan lasts at least three years - that equals at least three years of your life, where total strangers restrict your every expense. Whether or not you can take out a new car loan may be the least of your concerns after hiring a credit-counseling agency. Consider how important it is to pay your credit card bills on time. Multiple late payments hurt your credit score, which means even higher interest rates on a future mortgage or student loan. What guarantee do you have that your counselor is paying attention to your due dates? Many of these businesses have been exposed for repeatedly paying bills months late. Their innocent clients never knew until it was too late. Then there is the matter of simple math. Shockingly, the monthly payment you make to your credit counseling company may not even be covering your total minimum payments. After the counselors subtract their own hefty fees, they then pay your bills at their discretion. Some cards could remain unpaid for months as most of your money is put on another card. At best, this means a lower credit rating and multiple late fees; at worst, it means legal action against you and worse credit than you had originally. debt consolidation It would have been faster, easier, and much cheaper to file bankruptcy instead. Dealing with debt can be stressful, but turning such an important aspect of our lives over to people we do not know is a big risk. It's great to get outside help, but not if it costs you hundreds or even thousands of dollars that would be better spent on paying off your current balances.
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Monday, July 5, 2010
That Pesky Debt Habit
It appears that debt is one addiction that we cant appear to kick the habit. For countless being in debt has become a way of life and we are addicted to allure of being able to buy now and pay later. We fool ourselves into believing that the eventuality of having to pay will come and it does quicker than we expect. Unfortunately, with a slow economy that has never gotten of the mat since 2008 the day of reckoning came faster then many hoped for. We piled on the debt feeling safe about our jobs and our capability to pay. Both now seem like illusion of some yester year. Many having lost their jobs and their unemployment benefits.. debt consolidation The credit card and other bills have not stopped arriving even though the paycheck have. Faced with putting food on the table, paying the rent or mortgage and paying the credit cards, the decision is not hard. The credit cards can wait and will be paid when the situation looks better.. Perhaps this was the only way that we could learn our lessons and come to grips with reality that we cannot live beyond our means. This lesson must be learned by those affected as well as those that are not, as they witness what those around them are experiencing. To blame this totally on the consumer would be irresponsible. Credit card companies lured many into credit with flavorful offers that the debt addict could not resist. Buy now, pay later, zero interest rate for a year, no annual fee were some of the marketing cries of these companies. Now with the business slow down and faced with ever rising write offs they have turned against the same consumer. They have raised their interest rates to 30%, invented new fees and lowered credit limits, all of which has inflected further pain on the consumer who is already drowning in debt. Mortgage companies also played the same game by offering low teaser rates, low or no down payment and many bought homes that were to big or simply could not afford.. debt consolidation Those homes are now being foreclosed and its occupants left looking for a place to live. This situation has not played itself out and we now face another tsunami of foreclosures. To put blame on anyone is an useless exercise because everyone involved consciously new the possible consequences and still moved ahead. Pointing out a single party as responsible would be opportune, but useless. It cannot change was has already been done. However, learning the lessons is all-important, so that we will not repeat the same errors. This and kicking the debt habit once and for all possibly will be the positive legacy of this period in time that we are still in middle of living through. debt consolidation
This may not be of much help to those in deep debt currently. But there is hope and a way out and debt relief programs such as debt consolidation and debt settlement exist to help them get back to financial sanity and move on. As with any problem, it does not go away ignoring, it must be dealt with.
This may not be of much help to those in deep debt currently. But there is hope and a way out and debt relief programs such as debt consolidation and debt settlement exist to help them get back to financial sanity and move on. As with any problem, it does not go away ignoring, it must be dealt with.
Friday, April 16, 2010
How Debt Settlement Companies Run And When They Make Sense For You?
A debt settlement organization will assist you figure out a method to negotiate your money owed so that you could flip your credit all-around. The following are just some of the numerous advantages of utilizing a program or organization for settling your debt.
One Of the greatest things about utilizing these kinds of supports is that they're in your corner and will assist you perform out deals with the individuals you owe. Thus, you'll have an proficient service walking you through this tangled fiscal web. Actually, such a organization will assist you hunt down consolidation loans and credit cards so that you could completely pay down your money owed and accomplish streamlining your debts. This will save you lots of cash within the long haul. Rather than having a few different interest rates to deal with, you'll have a individual loan or payment to conduct on paying down.
A debt settlement organization wants to assist you perform through your debt. They aren't like credit card businesses: they aren't going to add additional fees and overcharge fees to ensure that getting out of debt keeps getting more demanding. Alternatively, a settlement group wants you to discover achievement so that you could pay them and so that you pass their name along to buddies and family members.debt consolidation
By the way, by searching and judging the greatest debt settlement services within the market, you'll be able to determine the one that meet your particular financial situation. Even so, it's wise going with a dependable and reputable debt counselor prior to making any choice, this way you'll save time through specialized advice coming from a veteran debt advisor and pay by getting much better outcomes in a faster amount of time. A debt relief organization will assist you to figure out a method to work out your bills so that you could move your credit around. The following are just a number of of the numerous advantages of utilizing a support or organization for reducing your debt.
One Of the greatest things about utilizing these sort of supports is that they're in your corner and will assist you perform out deals with the individuals you owe. Thus, you'll have an competent company walking you through this complicated financial web. Actually, such a organization will assist you hunt down consolidation loans and credit cards so that you could pay off your bills and accomplish streamlining your expenditures. This will preserve you lots of cash within the long haul. Rather than having multiple interest rates to cope with, you'll have a single loan or payment to conduct on settling.
A debt settlement organization wants to assist you perform through your debt. They aren't like credit card businesses: they aren't going to add more extra fees and overcharge fees to ensure that getting out of debt keeps getting more demanding. As an alternative, a negotiation group wants you to discover results so that you could pay them and so that you pass their name along to classmates and friends and household members.
Having a financial group root and perform for you are able to allow you to not only get out of debt but to totally alter how you see and use credit. This kind of support is certainly not a bad deal. They can only win if you do well.debt consolidation
By the way, by considering and judging the greatest debt relief services within the market, you'll be able to determine the one that meet your particular fiscal situation. Even so, it's highly recommended going with a honest and reputable debt counselor prior to making any choice, this way you'll save time through specialized assistance coming from a veteran debt advisor and pay by getting much better final results in a reduced period of time.
One Of the greatest things about utilizing these kinds of supports is that they're in your corner and will assist you perform out deals with the individuals you owe. Thus, you'll have an proficient service walking you through this tangled fiscal web. Actually, such a organization will assist you hunt down consolidation loans and credit cards so that you could completely pay down your money owed and accomplish streamlining your debts. This will save you lots of cash within the long haul. Rather than having a few different interest rates to deal with, you'll have a individual loan or payment to conduct on paying down.
A debt settlement organization wants to assist you perform through your debt. They aren't like credit card businesses: they aren't going to add additional fees and overcharge fees to ensure that getting out of debt keeps getting more demanding. Alternatively, a settlement group wants you to discover achievement so that you could pay them and so that you pass their name along to buddies and family members.debt consolidation
By the way, by searching and judging the greatest debt settlement services within the market, you'll be able to determine the one that meet your particular financial situation. Even so, it's wise going with a dependable and reputable debt counselor prior to making any choice, this way you'll save time through specialized advice coming from a veteran debt advisor and pay by getting much better outcomes in a faster amount of time. A debt relief organization will assist you to figure out a method to work out your bills so that you could move your credit around. The following are just a number of of the numerous advantages of utilizing a support or organization for reducing your debt.
One Of the greatest things about utilizing these sort of supports is that they're in your corner and will assist you perform out deals with the individuals you owe. Thus, you'll have an competent company walking you through this complicated financial web. Actually, such a organization will assist you hunt down consolidation loans and credit cards so that you could pay off your bills and accomplish streamlining your expenditures. This will preserve you lots of cash within the long haul. Rather than having multiple interest rates to cope with, you'll have a single loan or payment to conduct on settling.
A debt settlement organization wants to assist you perform through your debt. They aren't like credit card businesses: they aren't going to add more extra fees and overcharge fees to ensure that getting out of debt keeps getting more demanding. As an alternative, a negotiation group wants you to discover results so that you could pay them and so that you pass their name along to classmates and friends and household members.
Having a financial group root and perform for you are able to allow you to not only get out of debt but to totally alter how you see and use credit. This kind of support is certainly not a bad deal. They can only win if you do well.debt consolidation
By the way, by considering and judging the greatest debt relief services within the market, you'll be able to determine the one that meet your particular fiscal situation. Even so, it's highly recommended going with a honest and reputable debt counselor prior to making any choice, this way you'll save time through specialized assistance coming from a veteran debt advisor and pay by getting much better final results in a reduced period of time.
Debt Relief - How To Prevent Ripp Offs And Find Established Debt Negotiation Firms
Numerous debt settlement organizations have been mentioned for getting really efficient in giving a valuable program to buyers. You will find, nevertheless, some businesses that have advertised as debt relief firms that have been revealed as a con. Numerous buyers have become distrustful on account of accounts of such scams active. That ought to not distress away buyers from the relief choice though.
There are lots of businesses who are established and extremely efficient in relieving buyers of debt worries. The greatest organization retains a staff of registered pro's who have reputations through the marketplace of getting qualified in their fields. Buyers can usually refer to the Better Business Bureau to have a look at the qualifications of the relief businesses that they're thinking about.debt consolidation
The International Association of Professional Ddebt Arbitrators (IAPDA) is also a great source of research when thinking about a settlement organization to overcome one's affairs. The IAPDA offers a list of competent experts within the field of debt settlement. The United States Organization for Bankruptcy Alternatives (USOBA) and also the Association of Settlement Companies (TASC) provide great insight on businesses which are have the ability to take care of debt consolidation troubles.
The better established an organization is means that it will have a a lot more well recognized reputation with the debt collectors with whom the settlement group negotiates. Numerous of the true settlement businesses are capable to lower debt for buyers by as much as fifty percent. They settle with collectors by supplying them an alternative to the losses experienced through customer bankruptcy and also the substantial losses of revenue experienced by selling accounts to collection organizations. The creditors will also receive tax breaks by forgiving customer debt.debt consolidation
With such incentives, relief businesses are capable to tremendously decrease the debt that buyers owe considerably. Because of to such positive benefits, settlement ought to usually be considered an option prior to the declaration of bankruptcy.
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There are lots of businesses who are established and extremely efficient in relieving buyers of debt worries. The greatest organization retains a staff of registered pro's who have reputations through the marketplace of getting qualified in their fields. Buyers can usually refer to the Better Business Bureau to have a look at the qualifications of the relief businesses that they're thinking about.debt consolidation
The International Association of Professional Ddebt Arbitrators (IAPDA) is also a great source of research when thinking about a settlement organization to overcome one's affairs. The IAPDA offers a list of competent experts within the field of debt settlement. The United States Organization for Bankruptcy Alternatives (USOBA) and also the Association of Settlement Companies (TASC) provide great insight on businesses which are have the ability to take care of debt consolidation troubles.
The better established an organization is means that it will have a a lot more well recognized reputation with the debt collectors with whom the settlement group negotiates. Numerous of the true settlement businesses are capable to lower debt for buyers by as much as fifty percent. They settle with collectors by supplying them an alternative to the losses experienced through customer bankruptcy and also the substantial losses of revenue experienced by selling accounts to collection organizations. The creditors will also receive tax breaks by forgiving customer debt.debt consolidation
With such incentives, relief businesses are capable to tremendously decrease the debt that buyers owe considerably. Because of to such positive benefits, settlement ought to usually be considered an option prior to the declaration of bankruptcy.
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Thursday, April 8, 2010
Where to Find Trustworthy Debt Advice
Personal debt is not only a very common problem in Western countries; it is a very difficult problem to prevent, or overcome, at an individual level. It is, indeed, very personal. For that reason, many people may want to keep quiet about it, and maybe not even tell close family that there is, or is about to be, a money problem. They would probably benefit from some help, but who do they go to for debt advice?
Prior to actually receiving debt advice, most people will go through three phases: Firstly, acceptance that there is a debt problem; Secondly, deciding whether to seek advice from a third party about the problem; and Thirdly finding out where to get advice and then seeking it.
Acceptance of a Debt Problem
Personal debt is something that many people may not even be aware of as a problem, even when it is. They may be in a revolving debt situation, whereby they keep borrowing more to make repayments on existing loans and credit card debts. As each facility reaches its maximum, they may seek another credit card, to add another creditor to their revolving debt cycle. Eventually, the debt roundabout stops, and creditors come after their money. If acceptance of the problem has not be there before, suddenly a person may be forced into acceptance.credit solutions
Deciding Whether to Seek Debt Advice
Once the debt problem is accepted, or acknowledged, by an individual, they then have to decide if they need to seek advice.
Some people may be aware that they have a problem, and for a variety of reasons, may think that they can get by without any outside advice. They may think they do not need help as they can sort the problem out themselves. It is also quite common for some people to be too ashamed and embarrassed to admit that they have a debt problem, especially if they live in a country where being in debt has a social stigma attached to it, such as the UK. Others may just think that getting debt advice is either too expensive, or that they will be conned out of their money, or both.credit solutions
Eventually, though, the weight of the debt burden forces most people to consider seeking advice on their debt situation. The pressures from creditors may become so overwhelming that even the most reluctant may seek some sort of expert debt advice or counseling.
Who Can Provide Debt Advice?
The next stage can be as difficult for many people as the earlier two: finding somebody appropriate, trustworthy and knowledgeable, who can be relied on to provide sound financial advice in a way that benefits you, and will help you extricate yourself from the burden of debt.
As with any problem, it is best to share with those close to you; indeed, with debt, they may well be affected anyway, so they should know. While you have been quietly suffering with debt worries and keeping it to yourself, your spouse or close friend may know somebody who can give free and useful advice, as well as share the emotional burden.
Should there be nobody in your close circle who is able to give you useful advice, which is normally the case, then you need to consider your local options.
The local options for debt counseling and advice will depend on where you live. The local laws may vary greatly, and it is important that you consult somebody who is aware of current regulations on consumer debt, and the treatment of debtors by creditors. That way, you may have your worries eased about your creditors coming to your house, and taking your possessions as a way of recovering their money. You will be aware of any legal protection you may have in your country or state, and act accordingly to protect yourself.credit solutions
For those who live in the UK, there is a free option for debt advice: the Citizen's Advice Bureau (CAB). The CAB have specially trained people who concentrate mainly on consumer credit counseling work. They will provide the advice you need on your rights, help you assess the debts, and then write to your creditors on your behalf. Having an advisor who will contact your creditors, and deal with them on your behalf, can reduce the personal pressure enormously.
In other countries, options will vary. What can discourage many from seeking advice about their debt problem is a fear that they will be cheated by an unscrupulous counsellor. Debt is an industry that, unfortunately, does attract some who prey on the unfortunate. They may lure customers with claims of being able to clear a bad credit record, when in fact it is not possible to do so. They may tempt people in bad debt with consolidation loans, demand a high up front payment, and then get a high commission on the loan as well.
Such sharks are quite easy to avoid if you shop around for the best counselling services at a reasonable cost. The following tips may help wherever you live:
1. Check with local and central government agencies to see if there are any free debt advice services. If not, ask if there is a licensing system for legitimate advisors, and stick to those.
2. Be wary of outrageous claims to clear your debt, and requests for large upfront payments.
3. If you decide a consolidation loan may help, shop around carefully, and select the lowest interest rate option, with no upfront charges.
Once you have found an advisor, be sure to take their advice, and co-operate in every way you can to allow them to improve your debt situation. It will be worthwhile in the long run.
Prior to actually receiving debt advice, most people will go through three phases: Firstly, acceptance that there is a debt problem; Secondly, deciding whether to seek advice from a third party about the problem; and Thirdly finding out where to get advice and then seeking it.
Acceptance of a Debt Problem
Personal debt is something that many people may not even be aware of as a problem, even when it is. They may be in a revolving debt situation, whereby they keep borrowing more to make repayments on existing loans and credit card debts. As each facility reaches its maximum, they may seek another credit card, to add another creditor to their revolving debt cycle. Eventually, the debt roundabout stops, and creditors come after their money. If acceptance of the problem has not be there before, suddenly a person may be forced into acceptance.credit solutions
Deciding Whether to Seek Debt Advice
Once the debt problem is accepted, or acknowledged, by an individual, they then have to decide if they need to seek advice.
Some people may be aware that they have a problem, and for a variety of reasons, may think that they can get by without any outside advice. They may think they do not need help as they can sort the problem out themselves. It is also quite common for some people to be too ashamed and embarrassed to admit that they have a debt problem, especially if they live in a country where being in debt has a social stigma attached to it, such as the UK. Others may just think that getting debt advice is either too expensive, or that they will be conned out of their money, or both.credit solutions
Eventually, though, the weight of the debt burden forces most people to consider seeking advice on their debt situation. The pressures from creditors may become so overwhelming that even the most reluctant may seek some sort of expert debt advice or counseling.
Who Can Provide Debt Advice?
The next stage can be as difficult for many people as the earlier two: finding somebody appropriate, trustworthy and knowledgeable, who can be relied on to provide sound financial advice in a way that benefits you, and will help you extricate yourself from the burden of debt.
As with any problem, it is best to share with those close to you; indeed, with debt, they may well be affected anyway, so they should know. While you have been quietly suffering with debt worries and keeping it to yourself, your spouse or close friend may know somebody who can give free and useful advice, as well as share the emotional burden.
Should there be nobody in your close circle who is able to give you useful advice, which is normally the case, then you need to consider your local options.
The local options for debt counseling and advice will depend on where you live. The local laws may vary greatly, and it is important that you consult somebody who is aware of current regulations on consumer debt, and the treatment of debtors by creditors. That way, you may have your worries eased about your creditors coming to your house, and taking your possessions as a way of recovering their money. You will be aware of any legal protection you may have in your country or state, and act accordingly to protect yourself.credit solutions
For those who live in the UK, there is a free option for debt advice: the Citizen's Advice Bureau (CAB). The CAB have specially trained people who concentrate mainly on consumer credit counseling work. They will provide the advice you need on your rights, help you assess the debts, and then write to your creditors on your behalf. Having an advisor who will contact your creditors, and deal with them on your behalf, can reduce the personal pressure enormously.
In other countries, options will vary. What can discourage many from seeking advice about their debt problem is a fear that they will be cheated by an unscrupulous counsellor. Debt is an industry that, unfortunately, does attract some who prey on the unfortunate. They may lure customers with claims of being able to clear a bad credit record, when in fact it is not possible to do so. They may tempt people in bad debt with consolidation loans, demand a high up front payment, and then get a high commission on the loan as well.
Such sharks are quite easy to avoid if you shop around for the best counselling services at a reasonable cost. The following tips may help wherever you live:
1. Check with local and central government agencies to see if there are any free debt advice services. If not, ask if there is a licensing system for legitimate advisors, and stick to those.
2. Be wary of outrageous claims to clear your debt, and requests for large upfront payments.
3. If you decide a consolidation loan may help, shop around carefully, and select the lowest interest rate option, with no upfront charges.
Once you have found an advisor, be sure to take their advice, and co-operate in every way you can to allow them to improve your debt situation. It will be worthwhile in the long run.
Debt Settlement - Eliminate 70% of Your Credit Card Debt With a Lower Credit Score
Amidst this relief process of credit liability that can exceed up to 3 years, the credit score would be largely affected. This makes it necessary to know several other options that are available before carrying on with negotiations. Prioritizing values with regards to debt settlement and also credit scores is very much essential. If you think of making a very stable income during the course with no destruction of credit then this kind of debt settlement might not be your choice. For such kind of people, counselling program for credit of consumers is apt. For ones who cannot pay back huge arrears or even cannot make this payment, the above said program is very good. The credit counsellor will reorganize liability and loans, even sometimes consolidate them to monthly payment that has got a low interest rate. The net amount outstanding is not much lower even though the interest rates are reduced which help debtors to pay the creditors back their amount in a short span of time with no hindrance to the credit score.credit solutions
There are several such rooted in liability which results in people filing bankruptcy that will completely demolish credit score along with the entire thing that you owe. Hence with debt settlement one can settle just 30 to 70% of liability to file this bankruptcy. The negative aspect of this is that the credit will drop down. Say the credit score of yours is on scale of 100 point. Good credits are at 100 whereas bad credits are at eighty and lower. Meaning to say that you enter into credit negotiation and you have hundred. Towards the end, settlement score would come to 60. While 60 does not seem to be bad at all when compared to the affect of bankruptcy on credit, but huge work is involved to get credit back to 80.credit solutions
If you have over $10k in unsecured debt it would be wise to consider debt settlement. Creditors of unsecured debt are very concerned about collecting on their delinquent accounts and you can take advantage of this. Consumers and small business have never had a better opportunity to eliminate debt through a settlement process.
There are several such rooted in liability which results in people filing bankruptcy that will completely demolish credit score along with the entire thing that you owe. Hence with debt settlement one can settle just 30 to 70% of liability to file this bankruptcy. The negative aspect of this is that the credit will drop down. Say the credit score of yours is on scale of 100 point. Good credits are at 100 whereas bad credits are at eighty and lower. Meaning to say that you enter into credit negotiation and you have hundred. Towards the end, settlement score would come to 60. While 60 does not seem to be bad at all when compared to the affect of bankruptcy on credit, but huge work is involved to get credit back to 80.credit solutions
If you have over $10k in unsecured debt it would be wise to consider debt settlement. Creditors of unsecured debt are very concerned about collecting on their delinquent accounts and you can take advantage of this. Consumers and small business have never had a better opportunity to eliminate debt through a settlement process.
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