Do you have more than $5,000 in debt on more than 3 credit cards? One of your options is to consider debt settlement negotiations.
There are basically two types of debt – unsecured  and secured.  The debt which causes us the most problem is the unsecured debt on your credit cards.
Understanding how we got into this problem and finding ways to resolve the problem is the first step in giving you  a piece of mind.
The credit cards were flexible and easy to use for everyday expenses. But something happened along the way, I started just paying the monthly minimum and my balances continued to grow.  The interest rate  and fees increased on your credit card. That is no longer acceptable because you are drowning in debt.
It may be tough in the beginning to made concessions and accept the fact you have a problem.  But once you understand the problem and the solution to your credit card problem the easier your life will be for you and your family. This allows you to  get started placing the money into a saving on a monthly basis. You will begin to build up the monies needed to pave the way for the debt negotiations settlement process to work for you and your family.
An experienced debt settlement company has the resources and the ability to negotiation on your behalf.  They will work with you to structure a plan that fits your current financial situation.  The way for debt negotiation to be successfully is the consumer faithfully following the plan.  The financial plan may take as little as 12 months or more than 48 months depending on your outstanding unsecured debt position.

Most of us go into panic mode when we receive notices from bill collectors and collection agencies. I know I do. Although it is upsetting, my sense is that most of us are not aware of the risks associated with our unpaid debt accounts. Creditors have many options at their fingertips to get their money. This article is meant to ease your fear about your creditors and to put you in the driver’s seat as you get out of debt.
Debt Collectors Exploit Your Fear
The biggest tactic used in getting past due money is wage garnishment and seizure of property. This method is based completely on exploiting your fear. The collection agencies usually fail to point out that they need to go to court first to be able to do anything to you.  It is possible for a creditor to take you to court and obtain a judgment against you allowing them to garnish your wages and possibly put liens against your home. While this could happen, the chances are small that they would go this far. It is too much time and expense to try and collect from you in this way.
Take It Slowly and Get the Debt Validated My sense is that most of us jump too quickly with the collection agency in paying the debt that they are calling about. I can only imagine how much money has been paid unnecessarily out of reacting to fear. What’s not to believe when it comes to hearing from the collection agent’s threats of impending doom and gloom if payment isn’t made immediately?
Hold on however. If you get a call, take a breath, you have options. The first thing you need to do is debt validation. Make sure that it is a valid claim and that it belongs to you. Given my years of experience in the mortgage and debt settlement businesses, I have seen thousands of mistakes on credit reports and have concluded that the credit reporting system in the US is flawed. Ask for the debt to be confirmed in writing and ask for copies of where you signed the contract or agreement that caused the debt.
Check the Statute Of Limitations For Your Debt
You may also want to check the statute of limitations for your State. There are limits to how long debt against you can be collected. Contact the attorney general in your state for this information. My recommendation is to call them. If the debt has been on your credit report for over 7 years (in most cases), the derogatory and the collection related to it should disappear from your credit report.  If the debt has not been paid for 7 years, then it can no longer legally be on your credit report. You can challenge the item and it will come off. If the debt is removed from your credit and the statute of limitation is up on this debt, you should be in the clear. Bankruptcies can remain on your credit report for no more than 10 years.
What Are Secured and Unsecured Debt? Know the type of debt you have. It makes a difference in how you proceed with getting out of debt. There are two types of debt, secured and unsecured debt. Secured debt includes homes, automobiles, and taxes. Unsecured debt includes checks, student loans, personal loans, medical bills, credit cards and department store credit cards.
It is unusual for secured debt to be settled.  If you cannot pay these bills the creditor will most likely foreclose on your home or repossess the automobile. If either of these happens be prepared for the possibility of additional money being charged to you if they cannot sell your home or car for what you owe them. This debt you may be able to settle. With unsecured debts, there is nothing “attached” to the loan for repayment, therefore there is nothing for the creditor to repossess. With nothing to take from you that they can sell, the creditor is more likely going to settle this debt. Make sure to document everything in writing.

Should I file for bankruptcy?  This is a very tough question to answer.  It would depend on what your situation is.  If you have more debt than you could ever conceivable pay back you may want to talk to your attorney about filing bankruptcy as an option to get out of debt.  Filing bankruptcy over small amounts of money might be a silly choice as well.  I have seen people file for bankrupty for as little at $8000 dollars.  That is crazy.  Your filing fees are going to about $2000 or more.  For that much you could just do a credit debt settlement program.  A credit settlement can cut your debt in half or more and you would not have to have all of the money together at once.  You could actually pay your creditors back over a period of a few years.

How Do Debt Settlement Programs Work? Continue Reading »