The definition of debt settlement is a third party who negotiates with lenders on behalf of the consumer. Debt settlement is a method of getting out of debt for the consumer’s who have fallen on hard times.
Debt settlement is one of the methods used by consumers when they fall behind on their unsecured debt obligations. A debt settlement company may be able to reduce the consumer’s outstanding balances. The consumer may be asking why use a debt settlement company instead of trying to negotiate with the lenders themselves. As a consumer you can take this approach, however one of the drawbacks is you will be working with multiple lenders. These lenders would want the agreed amount money upfront in order to settle your account.
By using a debt settlement program, they will negotiate on your behalf and notice the lenders of your indications of using a settlement program. The debt settlement program will set up a “trust/escrow account” for the consumer. Each month the consumer is deposit an agreed to amount in order to start saving. Once the account has reach at least half of the lowest outstanding balance of one your credit cards, the company will begin negotiations with the lender.
The consumer will now be making only one monthly payment instead of multiple payments over a set period of time. It may take between 12 to 48 months to complete the cycle of reducing the consumer’s unsecured debt.
So start today and contact a representative so they can answer all your questions so you can start living debt free!!
Today consumers are facing a hardship that has been caused by not only the economic climate of losing their jobs or reduced hours to part-time but also by a medical emergency. Perhaps only making the monthly minimum payments on their credit cards but they were able to meet their monthly mortgage and car payments on time.
So during these trying economic times, the consumer is not only stressed out because of their job lost but their inability to meet their obligations. The consumer must decide what is best for them and their family. Because of the emotional toll it is taking on them.
After the consumer, has reviewed the various options such as, debt consolidation, debt consulting, bankruptcy, do nothing or debt settlement. They will see that a debt settlement option may be their best method to unburden themselves.
As what is debt settlement? Debt settlement is a managed approach used by a third party company. This company will negotiate on behalf of the consumer to reduce their debt by up to 50% of the outstanding current balance. Basically, the consumer places a set amount of money each month into a “trust account” until approximately half of what is owe on their lowest credit card balance. It is when the debt settlement company will start to negotiate with the lenders. The lenders are more willing to take something on the balances than have the consumer file bankruptcy on them. In a bankruptcy case, depending on the assets of the consumer, normally secured lenders get repaid first then the unsecured lenders. In most cases, the unsecured lenders receive no money from the consumer.
The consumer wants to do the right thing not only for themselves but their families. A debt settlement program can take from 12 months to 48 months to complete based upon the outstanding credit card balances. This program may cost the consumer less than their current monthly minimum payments. It is not a quick fix program but a program that will allow the consumer the ability to repay their debt and repair their credit score.
Has your monthly spending continued to outgrow your earnings? Have you suffered an medical emergency or lost your job? This is very typical of our economics in today’s reality and if this is your situation then a debt settlement company may be the solution.
Debt settlement is a method by which a third party negotiates with your lenders to reduce your unsecured credit card debt. With that said – it’s important for the consumer to have an understanding of their options and various alternative that may solve their finances.
The alternatives available to the consumer are: debt consolidation, debt counseling, equity loan on home, bankruptcy or debt settlement.
So a quick review of these alternatives:
· Home equity loan – This allows the consumer to borrow against their personal residence. There may or may not be enough equity in their residence to qualify for this loan.
· Bankruptcy – This is a major step for the consumer. The consumer needs to discuss with their attorney.
· Debt consolidation – This approach allows the consumer to pick and choose which debts to consolidation into a term loan with a lender. A term loan is normally secured by collateral from your lender and can try up to 5 years to repay.
· Debt counseling – The consumer meets with a counselor to determine an set budget to pay off your debt to the lenders. The consumer is still required to pay off their entire balances.
· Debt settlement – The debt settlement company establishes a monthly repayment plan. After at least half of your lowest outstanding unsecured credit card balance is achieved. The third party will negotiate with your lender to reduce your debt. This negotiation can be from 40 to 50% of the balance. This process can take between 12 to 48 months depending upon your debt burden.
When compared against the other alternatives it appears to be a better method in changing your financial situation. If is important for the consumer to understand all the step involved in a debt settlement. Call today to speak with a representative!
A historical look at a debt settlement program is nothing new for the consumer or for the lenders in regard to unsecured debt. Some type of settlement practice has been in place for over 100 years. The plan may not have been called debt settlement it might have been know as debt relief or debt forgiveness depending on the amount of the settlement.
The only form of relief for a consumer was bankruptcy, debt counseling or debt consolidation. Debt settlement was a little known way for consumer’s to find a way out from unsecured credit card debt.
If you call your credit card company to work out a deal, they typical will work out a payment plan for the whole outstanding balance. Therefore, the consumer is not gaining any ground is trying to get out of debt. Plus the consumer might simply walk away from the debt altogether, by filing bankruptcy then the credit card companies received almost nothing on the outstanding debt. This hurts the financial bottom line of the credit card companies. Therefore, they are more willing to work with a debt settlement company and receive at least 50% or less on the outstanding debt than maybe nothing at all from the consumer.
The phrase, “a bird in hand is better than nothing” can apply to why credit card companies are willing to negotiate with a debt settlement company. It’s a process which requires discipline by the consumer, but it is a better way to handle your outstanding debts, without having to file bankruptcy or doing nothing about your debt.
One question that every consumer asks is, why would a credit card company, be willing to work with a debt settlement company instead of with me the consumer directly? The answer to that question is simply. The debt settlement company has a better understanding of the consumer laws and has experience dealing with the credit card companies.
So take at first step and talk to an experienced debt settlement representative today!
In today’s economical climate – debt can make life difficult to enjoy. It’s part of our reality. Two possible solutions to resolving this burden can include bankruptcy or debt settlement. Let’s examine these possibilities.
You first need to determine if you can pay down your debts with your present income. If your current expenses exceeds your basic living expenses debt settlement may help you resolve your financial situation. If your income does not exceed your expenses such as mortgage, utilities, car payment and insurance and your basic household needs then debt settlement is not a solution for you. Examine the pros and cons of committing to a debt settlement company You want to work with a reputable debt settlement company. Look for companies with a sound history and proven track record. Also, ask how a debt settlement program will impact your credit in the future and what the long term effect on your credit as well.
If you have no other option for resolving your financial situation begin to do your research on bankruptcy. You need to determine if you even qualify for bankruptcy by reading the most current U.S. Bankruptcy Code’s. Depending on the types and amounts of your debts, a bankruptcy will not necessarily rid you of your obligations to pay some of your bills even though you filed bankruptcy. Make an appointment to discuss your financial situation with an attorney who specializes in bankruptcies. It is important to have the attorney give you a written quote for their services to represent you in court.
Finally, consider whether filing bankruptcy will resolve your financial situation. Keep in mind that a bankruptcy filing remains on your credit report for ten years and can have a significant impact on your future and your ability to re establish yourself.
If you have a loan with CitiMortgage and are having trouble keeping up on your mortgage payment, you may be eligible for a loan modification with Citi. The first step is to call the loss mitigation department at Citi Mortgage and see what you need to do to get the mortgage loan modification process started.
Citimortgage Loan Modification Requirements Continue Reading »
How do I know if I should do debt settlement or debt mediation? Financial troubles are now facing millions of Americans due to the credit crisis. Many Americans will have to make hard decisions about their personal debt. Unfortunately there are not many great choices you can make when you are in debt. You can choose from debt consolidation, cccs, debt settlement, debt negotiation, consumer credit counseling or bankruptcy. Each choice has its advantages or disadvantages.
Is debt consolidation like doing a chapter 13 bankruptcy? Continue Reading »
How does debt negotiation compare to consumer credit counseling? When you are in debt life can look like it is closing in on you. You may feel despair and hopelessness about your debt situation. The important thing is to not stop. The major choices in getting out of debt are filing bankruptcy, credit card debt settlement and CCCS.
Is credit counseling a smart choice for getting out of debt? Continue Reading »
BK is an acronym for the word bankruptcy. Bankruptcy is a legal action that you can take when you cannot pay your bills. A bankruptcy can stay on your credit for up to 10 years and you wont be able to buy a home for at least two years. You best bet is to try and avoid a bankruptcy at all cost.
For bankruptcy alternatives go call toll free 1-888-368-6668 or go to DebtNegotiationZone.com
Do not let a debt mediation company keep your funds in their house account. Use a debt negotiation company that insists on setting up a special trust account for you. When you give someone your money it magically becomes their money. Who would you rather have hold your money during your debt negotiation program. If a debt settlement company wants to hold your money and they are not a law firm, they are probably breaking the law. The law is very specific about how money can be held. Most states have laws about debt collection and their are laws about how money can be held. Your best bet is to use a debt settlement firm that has you set up your own bank account. You control it and if you decide that you do not want to do the program anymore, there is no question about getting your money back.
Should I refi to pay off my debt? Being in a financial jam can be a frustrating as well as an unsettling experience. Getting harassed by bill collectors and creditors day and night can be annoying as well as emotionally draining. But you do have options that you can take to take care of the situation. The two that we are going to discuss in the article are refinancing your home to pay off the debt or doing a debt settlement program. Continue Reading »
TASC stands for The Association of Debt Settlement Companies. The goal of TASC is to promote solid practices in the debt settlement industry and protect the interest of consumers and debtors. TASC also lobbies at the federal level on behalf of debt settlement companies. Continue Reading »
What does USOBA stand for? It is the United States Organizations for Bankruptcy Alternatives. USOBA was founded by the debt negotiation industry for representation for the debt negotiation and debt settlement outside of the consumer credit counseling and bankruptcy industry. The focus of USOBA is to cause advocacy and agenda for the debt negotiation and debt settlement industry. Continue Reading »
How Does Consumer Credit Counseling Work?
This information going to discuss the advantages of doing a Consumer Credit Counseling program. You may have heard of debt consoladation referred to as Consumer Credit Counseling, CCCS or debt management. To clear up the confusion, they are pretty much the same thing. Doing a debt management program is much different than doing a debt settlement program. In debt settlement you are negotiating down the amount of principal to pay back and debt consoladation you are negotiating the interest rates. In consumer credit counseling you will pay all of the principal plus interest. Debt negotiation will save you a lot of money in the principal but your credit score will get wrecked during the process. In debt negotiation you will pay back less than you originally borrowed. As you can imagine your creditors do not like that too much. Continue Reading »