As a consumer, you must have a clear understanding of the program you are selecting.  Do not let any lender give you answers to questions that are not clear or you do not understand.  It is the consumer’s responsibility to understand exactly what their monthly mortgage payment will be and if this payment includes property taxes.  The consumer needs to select a program what meets their financial requirements.

When meeting with the lender, the consumer must be do the following:

• Always be truthful to the lender
• Have complete copies of last two (2) federal tax returns including all W-2’s on all borrowers
• Have copy of most recent paystub for all borrowers on the transaction
• Have a copy of last two (2) months bank statements on all accounts and any stock/investment accounts
• If refinancing, have a copy of most recent mortgage statement
• If refinancing, bring copies of original documents in regard to mortgage
• Prepare a list of all assets, including names of banks, average balances along with a list of all liabilities, i.e., auto loans, credit cards, 2^nd home mortgages.  Note the lender can receive this information via a copy of your credit report.  But having the information available at the meeting is important.

At this meeting, the lender will be able to approximate, what your debt to income ratio. The final ratio is determined by credit underwriting. 

By having this information available, the lender should be able to discuss with the consumer various types of loan programs, which will meet the consumer’s financial position.  If you are a new home buyer, it is important that you have money available for a down payment. 

So what is the debt settlement option? Debt settlement is a method by which a third party negotiations on behalf of the consumer with their lenders to reduce their outstanding balances. Typically, this program works only for unsecured credit cards but may include any other types of unsecured debt like medical bills.

Today’s consumer is asking themselves, “How am I going to get out of debt?” The answer to that question is to consider a debt settlement program as a method to resolve their current financial situation. Consumers have not faced this type of financial climate since the Great Depression and in that situation; they were not overburden by unsecured credit card debt. Consumers are riding a roller coaster of emotions because of their financial situation. This along with the fact they are facing financial hardships because of a lost of job, reduced salary, divorce, death or medical emergency.

The consumer needs to select an experienced debt settlement company.  This company should be able to provide answers to all the consumer’s questions in a way that the consumer clearly understands how the program works.  The consumer should ask for the following:

• Upfront copy of all documents along with fee and cost schedules
• A company profile
• List of accreditations or afflictions, i.e., Better Business Bureau and associations

With any program, there are pros and cons when considering a course of action.  It is the consumers responsible to ask questions and do their research on the debt settlement company they select.

 The con’s are:

·         Tax ramifications – consumer will need to report any amount of forgiven debt that exceeds $600. This means an increase to your tax bill.

·         Credit score will drop

Some of the pro’s are:

• One single monthly payment
• Avoiding bankruptcy as an option. Always consult with an attorney about this step.
• Stopping collection calls
• Possible elimination of lawsuits and other legal action
• Stop any extra charges to the credit card

The biggest problem facing today’s consumer is unsecure debt.  When facing this financial challenge the consumer may want to consider a debt settlement program. They want to paid off their credit cards but have been struggling because of possible job loss or reduced salary or a medical emergency.

Let’s take a quick review of what it’s costing the consumer on their unsecured credit cards.  For example:

·         Credit Card debt of $30,000

·         3 years of interest at 19% is $17,100

·         5 years of interest at 19% is $28,500

The above interest figures do not calculate any principal reduction on the $30,000 outstanding. So you can see that you are not making any headway on reducing your debt only adding to your financial situation.

If you have faced a financial hardship, then consider using the debt settlement method.  Under a debt settlement program, a third party will negotiate with the lenders to reduce you debt possible up 50%.  This would mean you would cut your outstanding balances in half and would save up to $17,100 or $28,500 over the next three to five years.

Debt settlement may not be the right program for everyone.  However as a consumer, you need to call a consultant today to discuss a program that is right for you and your family.

The new credit card laws will come into effect in about nine months.  President Barack Obama signed the bill into law.  The credit card companies will not be happy about the new laws because it will limit their ability to make money off of you now.  So really, who cares about them.  They are assholes any.

Universal Default Rate Changed- Minimum Credit Card Payments

The old universal default rate rule will be changed.  It used to be if you were late on one card, the credit card companies could raise your interest rates on all off your credit cards.  So if you were having a difficult stretch financially, you really go nailed.  That seemed fair.  The new credit card law will eliminate this practice.

Get A Lower Credit Card Interest Rate

If you did make a late payment and your interest rates were raised, there is hope.  Under the new law you only need to make six months of on time payments to get your interest rates lowered.  With this measure the credit cards companies will not be able to trap you into a lifetime of debt.  Lets face it, minimum credit card payments is a financial death sentence.  I don’t feel bad for the credit card companies.  They are only interested in pumping out slaves.  They don’t make huge profits from people paying off their bills.  They only make money on peoople that go into debt and stay in debt.  The love customers that can’t control themselves and buy things that they can’t afford.

Don’t spend money you don’t have.  Get used to paying cash for your purchases and have a life and a future.

Barack Obama should be signing the new credit card bill that was passed by the Senate earlier this week.  The new credit card laws should be coming into effect within the next nine months.  This assuming that the bill actually gets signed.  It appears that it will.    The new credit card rules will be easier for people to understand.  Credit analysts believe that the new laws will make credit cards and consumer credit more difficult to get and more expensive for consumers.  We may see yearly fees come back on all credit cards.  Low income households may have a tough time obtaining new credit cards from credit card companies.  Card holders will have more time to pay the monthly bill, more notice of rate changes including late fees and interest payments.

What are The New Rules For Credit Cards for Consumers?

• Consumers will have more time to pay the bill.  Bills would be due 21 days after they are mailed.  Creditors would no longer be able to make early morning or other arbitrary due dates for paymenhts.  Due Dates that fall on weekends or when the credit card company is closed would not be subject to late fees.
• Over the limit fees would be a choice.  You would have to choose an option that would allow you to go over your spending limit rather than just being able to.  Many consumers get in trouble with over the limit fees because they don’t even know that they have gone over the limit.
• The consequence of making minimum payments must be spelled out clearly to the credit customer.
• Changes in interest rates could only occur after a 45 day notice.
• The practice of Double Cycling would be eliminated

Hopefully these changes will give all consumers a better chance to pay off their debt for good.  Maybe consumers will think twice about getting into debt in the first place and in the long run be more responsible.

On Tuesday the Senate voted to approve a bill that will make it tougher for credit card issueers to raise fees and interest rates starting early next year.  This action comes after years of abuse by credit card companies of their customers.  Chris Dodd said “To have the industry reaching and be as abusive to consumers, it needed to stop and it needed to change”.  The bill would make it more difficult for people under the age of 21 to get credit card.  It would also eliminate interest rate hikes unless a customer is more than 60 days late on their credit card bill.

No More Late Fees On Late Credit Card Payments

The new bill would prevent interest rate hikes on consumers who are late on their monthly credit card bills.  The new rules for consumer credit would allow a rate hike only after 30 days late.  As it is now, if you miss you payment by one minute, some credit card companies have the right to raise your interest rates to as much as 30%.  No wonder consumers are mad.  With the current economic crisis, many consumers are just throwing up their hands and walking away from their debt.  Hopefully this new law would have people be more willing to pay off their debt.  When asked about a debt bubble Timothy Geitner did not seem to be concerned about it.

How do I get rid of credit card debt fast?  Being in credit card debt can be a frustrating and scary experience.  The over the limit fees and the late fees can get burdensome if not pushing you over the financial edge.  If you have your back against the wall you do have a few options.

What Is The Quickest Way To Get Out Of Debt? Continue Reading »

Your credit card company is not your friend. They have one goal in mind and that is to make money off of you. You will probably not find any sympathy from them if you are unable to make your credit card bill.

How will my credit card try and trick me? Continue Reading »

What will happen if I stop paying my bills? It is important to know what will happen if you are unable to pay your monthly debt obligations. The first 30 day late that you have your credit score is going to drop like a rock. I have seen credit scores drop as much as 100 points just for one 30 day late. Your interest rates will probably go up as well. You credit card contract has a provision call the universal default rate. This is the rate they can charge you when you do not make a payment. Continue Reading »

How Does Debt Consolidation Work?

This article is about the advantages of doing a debt consolidation program. You may not be aware of this but debt consolidation, CCCS, credit counseling and consumer credit counseling are basically the same thing. Doing a debt consolidation plan is different than doing a debt settlement program. In debt settlement you are reducing the amount of principal that you will pay back and in credit counseling you are negotiating the amount of interest you will pay back. In consumer credit counseling you will pay all of the principal back plus some interest. Continue Reading »