How Do I Get Credit Counseling?

To obtain credit counseling services you must participate in an interview with a non-profit credit counseling company that is approved by the office of the United States Trustee.  In most cases, this credit counseling will take about an hour and can even be done over the phone or web.  The fees for credit counseling are minimal.

This information is of general interest and not considered legal advice.  Should you require legal advice seek the services of a qualified professional or attorney.

Is debt consolidation through a credit counseling company bad?

Many consumer credit counseling programs are under the gun these days. Many are being sued by their state attorney generals. The IRS and the FTC are investigating their supposed “non-profit” status. Be very careful before you do business with an consumer credit counseling company. Make sure that they are not under investigation before you sign up. You may be left high and dry.

How can I check out a credit counseling company?

If you want to check out a credit counseling company you can go to the BBB or local consumer protection agency. Keep in mind that most people do not go the extra mile when they have a complaint against a debt consolidation company. You should also check out the FTC and your state attorney general to see if there are any complaints against them.

What is the best debt consolidation company? I think it might be better to ask what can I do to get out of debt other than signing up for credit counseling or a debt consolidation loan? If own a home and have equity in it, you have the ability to do a refinance and pull money out to pay off your bills.

How can I get out of debt fast?

If you have a home that has equity, you can do a cash out refinance with a new mortgage and pay off your credit cards and other debts. Putting your credit card debt into your home loan will give you a much lower payment. Credit cards are designed to work off of simple interest and a mortgage loan is amortized. A credit card balance of $30,000 may give you a payment of over $1100. If you moved the balance into a new mortgage, your new payment would be just under $205 when it is calculated on an amortized basis. Keep in mind that doing a new mortgage will have closings costs that could cost you a few thousand dollars. Keep in mind that when you put your credit card debt into a new mortgage you are now putting your home at risk in the event you still have a problem paying the debt back. If you do not pay your credit cards, there is nothing to take from you. If you stop paying your mortgage, the bank will foreclose and take the property back.

Is getting a heloc a good way to get out of debt?

Instead of doing a traditional refinance you may want to consider getting a home equity loan or a second mortgage instead. Most of the time a home equity loan or heloc will have no closing costs. Credit card payments are not tax deductible however if you use your mortgage to pay off your credit cards, you can write off the interest payments on your taxes.

Ask your credit card company for lower interest rates

It can’t hurt to pick up the phone and see if you can get better rates from your credit card company. You may need to threaten that you will move to a company that is offering you a lower interest rate. They don’t want to loose you as a customer

This information is designed to be of general interest and should not be considered legal advice. The specific information discussed may not apply to you. Before acting on any matter contained herein, you should consult with your personal legal adviser or attorney.

For a no hassle debt review call toll free 1-888-368-6668 or go to DebtNegotiationZone.com

Many Americans now feel that their debts are spiraling out of control and there is nothing they can do but have an attorney file for a bankruptcy. Most debtors believe all of those freighting stories told by the bill collectors of the impending doom that faces them. The biggest scare tactic used is utterance of a wage garnishment and seizure of property. The collection agencies usually fail to point out that they will first need to go to court and get a judgment to be able to do anything to you. I recommend that bankruptcy would be your last option in trying to get out of debt. Most debtors jump to quick to do a bankruptcy before examining all the possibilities that exist to resolve the debt. Usually this option is exercised out of fear and wanting it to go away quickly. I hope that this information will educate you in this area of the unknown for you.

Creditors will try to scare you into paying them

Most consumers go into breakdown mode when they receive correspondence from collectors and law firms. Most debtors are not aware of what the risks of not paying their bills are. It is a possibility that a creditor can take you to court and obtain a judgment which would allow them to garnish your wages and place liens against your property. This can and could happen, but the chances of this actually happening are slim. It is too much money and time to try and collect from you. If they do take you to court, they often have no solid case. Even if they win, collecting from you can still be difficult.

Debt Validation is the first step in responding to a collection agency

The first thing you need to do is have a debt validation done. Make sure that it is a valid claim against you. The credit reporting system in this country is loaded with errors. You want to make sure that it is even a valid claim against you. Thousand of people just pay bill when threatened by a collection agency. I think most consumers would be shocked to find out that they probably paid a bill they did not have to. If they only would have had the debt validated, they could have avoided making an unnecessary payment.

Check the statute of limitation on the debt

You may also want to check the statute of limitations on the debt in your state. You need to check the statute to see if the debt is still even collectable. Contact the attorney general in your state to check what the terms are in your state. Someone may be trying to collect on a debt that has past the statute of limitations on collecting it.

If the debt has been on your credit for over 7 years (most cases), the derogatory and the collection related to it should have been removed from your credit. If the debt has not been paid for 7 years, it can no longer be allowed on your credit report. You can challenge the item with the credit bureau to have it come off. If the debt is removed from your credit and the statute of limitation is up on this debt, you are in the clear.

What is a secured debt?

The two types of debt are secured and unsecured debt. Secured debt would include cars and houses. Unsecured debt would include bounced checks, student loans, medical bills, personal loans, credit cards and department store cards.

What is an unsecured debt?

With an unsecured debts, there is no property “attached” to the loan promised for repayment. Unsecured loans are given based on your credit score and income. This is the type of debt that a collection agency is wiling to settle on. There is no guarantee that they will ever get anything from you should a default take place. You may have an advantage in this scenario if you are trying to negotiate a debt. You have one thing that the creditor wants, your money. Keep in mind that they have no guarantee that they will ever collect anything. You want to get everything in writing. This will be the only proof that you actually settled. If there is a reporting issue on your credit report, you will have something to fall back on. On the phone they will try to stress you out so they can collect more money from you. Most bill collectors are be happy to work with you like this.

A secured debt will be very difficult to be negotiated. If you are unable to pay these bills the creditor will foreclose on your home or take the car back. Once the car is repossessed, you may be able to negotiate the deficiency.

Some good rules of thumb to follow when in the settlement process;

Never talk on the phone to a collector.

1. Be sure to get everything in writing first before you send any money.
2. Keep good impeccable records of everything. Send all correspondence by registered mail.
3. Keep a log of whom and when you called.
4. Follow up a call with a letter by mail.
5. Penalties and interest are typically made up amounts of many added on by the collection agency to increase profits. Ask for validation of the claim.
6. The longer you can not pay them, the better settlement you can get.
7. Do not settle fast. If you are trying to buy a home and you probably to have it off your credit report, make sure they don’t know about this. Keep in mind that Fannie Mae will allow you to have up to $5000 in collections and still be eligible to buy a home.

Filing a bankruptcy should be your last option. The collection agency is not your friend. Do not be intimidated by the collection agencies. Usually your worst fears about what can happen wont anyway. I hope this article will save you a mountain of money when settling your debts.

This information is of general interest and not legal advice. Should you need legal advice seek the services of a qualified legal adviser or attorney.

For a no hassle debt review please call toll free 1-888-368-6668 or go to DebtNegotiationZone.com and fill out the request for a review form.

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