Debt settlement
How do you know which debt settlement or debt consolidation program to choose, when theirs 1000's out there?
How do you know which program is good and which one is right for you. I heard their is a way to check there beruo report or something, not sure what its called. How can you see the results and reputation of the debt settlement program or debt consolidation program.
Watch the video related to debt settlement
A credit counselor discusses what debt settlement is and how it can help or hurt you.
Let’s discuss about debt settlement
Tags: bankruptcy, consolidation, credit card, Debt Settlement
This entry was posted on Friday, January 29th, 2010 at 5:29 am and is filed under Debt Settlement. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
16 Responses to “Debt settlement”
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The worst thing that can happen to you is that you will lose the case.
If your wife doesn't have a job, they can't garnish her wages.
If you own Real Property, they can put a lien against it.
Otherwise, lawsuit judgements can also be "settled" if the creditor agrees. Just because the plantiff wins the case doesn't mean you have to pay the entire judgement amount-it just gives the creditor more options to come after your assetts.
Most of the debt repair/consolation/settlement companies want their fees up front and leave you credit trashed.
Check nfcc.org for listings legit non-profit credit counseling services. They can help you set up a budget and work out clearing up your debt.
You can tackle your debt yourself by putting every extra penny on the highest interest rate debt, while making minimum payments on the rest. When the highest is paid, move to the next, till they are all paid off.
It will take 2 or 3 years but if you work at it, you'll be out of debt with a good payment history.
Heidi, you’re again presenting misinformation. The debt DOES go away. You no longer owe that debt.
Yes, the portion of the debt that has been forgiven may become income, which is taxable. But paying taxes on a fraction of the debt that has turned into income is not the same thing as owing a debt collector. Sheesh.
It is true. The agreement to accept service of process in case of inability to make payments on the settled account is almost always included in the fine print. Debtors’ blogs are full of people who only found that out after they thought they had settled their debt. If you miss a payment, you are immediately being sued.
After settling, the credit card company issues you a 1099MISC reporting the difference between what you admit you originally owed and the settlement amount – as INCOME.
Don’t settle. If you do, you will reset your state’s Statute of Limitations to the beginning again, giving them more time to sue you.
Many settlement agreements include fine print granting the collectors the right to sue you without having to serve you because you already admitted responsibility for the debt by settling. Just defeat them. Learn to defend yourself. I did, and I won.
watch?v=kkcnQdWzC3s
Do not fall for these debt consolidation scams. The debt will still be there and also are your spending habits that got you there in the first place. You won't get yourself out of debt by borrowing. The only true way to get out of debt is to change your habits. One way is to get yourself enrolled in a good debt reduction program. There are many good ones to choose from. Sometimes it can be hard to choose the best one for you. You can visit the web site below for reviews of some of the best ones.
The best thing to do is get a copy of "The Total Money Makeover" by Dave Ramsey.
Get yourself a written budget, where everything you make next month is spent on paper this month.
Nobody gets a dime until the essentials are paid for:
Food, shelter, utilites, transportation.
Then see what you can cut. Food = Beans & Rice. No restaruants, no steaks, etc.
———————————————-
To quote from Dave Ramsey's web site:
History also teaches us that debt wasn't always a way of life. In fact, three of the biggest lenders today were founded by people who hated debt. Sears now makes more money on credit than on the sale of merchandise. They are not a store; they are a lender with some stuff out front. However, in 1910 the Sears catalog stated, "Buying on Credit is Folly." J. C. Penney department stores make millions annually on their plastic, but their founder was nicknamed James "Cash" Penney because he detested the use of debt.
Henry Ford thought debt was a lazy man's method to purchase items, and his philosophy was so ingrained in Ford Motor Company that Ford didn't offer financing until 10 years after General Motors did. Now, of course, Ford Motor credit is one of the most profitable of Ford Motor's operations. The old school saw the folly of debt; the new school saw the opportunity to take advantage of the consumer with debt. "
i personaly work for the credit card collections department of a large UK based bank, and am faced with people in financial trouble everyday. rather than constantly harrass our customers we are trained to recomend debt management companies to card holders who are in financial trouble. consolidation loans like you would see on the televisoin, basically loan you the ammount you would need to pay off all your card debts, and then you pay them back over a period of time, many people find this easier because its only one bill to pay every month, rather than 1-10 credit card bills each going out on different days, however the interest on these cards is usualy higher than the cards interest, and as such costs more in the long run, they attract people by offering low monthly re-payments, however this just allows them to drag out the loan even longer, earning them even more money. as a collections specialist i never recomend consolidation loans
now for debt management compaines, these companies are a little different, they will usualy produce a financial assesment for yourself (the card holder) also known as an income and expenditure report. they will then decide how much you can pay to each creditor each month, they send the details to all your creditors and then if your offer is accepted you usualy get the interest and charges frozen on your credit card, and are allowed to pay back a lower ammount than usual for a fixed period of time.
one thing i will say is read your contract through very closely, as some debt management companies (such as gregory pennington ) actually wait 3 months before paying any of your creditors, even though you will be paying them money every month to sent to the creditors (and to pay for thier service) this pushes you further into arrears, and has caused some people to be issued default notices, the company do this to both earn interest on the money in thier holding accounts, but also to pro;long the ammount of time you will need thier services. in my job i only ever recomend FREE debt management compaines such as payplan, the CCCS (consumer credit counceling service) and your local CAB (citizens advice bureau) all of these comapines provide equal or better service than those you would pay for. hope this helps you out.
Check if people were satisfied with their service, read their websites for detailed description of their services and its effectiveness. I used Freedom Debt Relief's debt reduction program and it was good. Visit: http://www.freedomdebtrelief.com/
erase your debt asap. com
That’s just not true. Settling a debt makes it go away. If the creditor agrees to settle, the debt is gone. If you agree to let the creditor sue to collect a debt, then you haven’t signed a debt settlement, you’ve signed something else, something very very stupid.
well debt consolidation is stupid to do. Owning other loan on your head means you are in debt no matter what. Stay away from consolidation. For settlment, i have contacted creditanswers (866-944-3201)
Possibly, but less so than a bankruptcy would. Many companies now check credit records. Various HR studies have shown that on average, people that maintain their credit the best also tend to be the best employees (for various reasons- they have less drama at home, they are more organized, they can manage resources better, or whatever). So if it negatively impacts your credit, it may keep you from getting a job, at least until it washes off your record in about 7 years time. But like I said, I'd far rather have debt settlement on there than a bankruptcy.
I've recently looked up some debt settlement companies for my sister so let me give you a little info:
1) Always ask if the company is a member of TASC (The association of Settlement Companies) They are the Better Business Bureau of Settlement companies and make sure these companies are operating within compliance regulations.
2) Always ask how much it costs. Usually there's a setup fee, a servicing fee, and a negotiation fee. The setup fee will usually range from $100-$200. The servicing fee can go anywhere from $70-$10/month. The negotiation fee ranges from 8%-15%.
3) It would definitely behoove you to check out any attorney or attorney-based company to handle all your debt settlement as they are stricter on compliance guidelines.
Try going to: http://www.tascsite.org and looking up some companies.
A good blog I read: http://iclosem.wordpress.com has some great articles on debt settlement. I would definitely look into that.
I was listening to the Howard Stern show the other day and it looks like KC armstrong just signed up for debt settlement with this company called Envision Debt Solutions (www.envisiondebtsolutions.com). I ended up sending my sister there as they answered all my questions right. They have an 8% retainer fee (since they're an attorney based company) and all the contracts you sign are with the attorneys. They were actually very courteous and professional and guided my sister through the whole process. Give them a call at: 800-515-9603
Debt Settlements are very different from Debt Consolidations.
Typically, you can do Debt Consolidation *BEFORE* you get into too much trouble with your creditors. It is a way of reducing your multiple monthly payments into a single lower payment. The objective is to get your monthly budget more manageable. Debt consolidation only works though if you do not incur any new or additional debt after you complete the consolidation.
Debt Settlements are agreements (typicall entered into at some point after the debtor has defaulted on payment) with a creditor or the collection agency representing a creditor where the creditor agrees to accept an amount lower than the stated debt. While this seems like a good deal for the debtor, it has and can have many drawbacks.
Often the creditor and or collection agency have tacked on a significant sum to the original debt, so much so that even the discounted amount may be more than you originally owed at default. While it is legal for the creditor and/or collection agency to add interest, fees, and penalties, some of these additions can be quite high (in some cases they may even exceed the legal maximums). Further, if the agreement is to begin a payment schedule, the interest, fees and penalties may continue to accrue (often making it impossible for the debtor to ever pay off the debt). Don't forget that the dollar amount of the "discount" must be reported as taxable income by the debtor.
If entering into a debt settlement agreement , be sure to have everything in writing and be more than sure you understand everything you are agreeing to.
While many debt collection agencies are honest and sincere in helping you resolve your debt problem, some are not and can make things much worse.
Be careful out there.
no need to pay someone to take of your problems. Call the credit card companies and offer to make a lump sum payment of 25% the total amount owed.