Debt Settlement - All You Must Know

[ Bookmark this page! ] [ get HTML Version ]

Debt Help and Advice - How to be Debt Free
Common questions regarding IVA's (Individual Voluntary Arrangement's)

An IVA is a legally binding arrangement supervised by a Licensed Insolvency Practitioner, the purpose of which is to enable an individual, sole trader or Partner ("the Debtor") to reach a compromise with his creditors and avoid the consequences of bankruptcy. The compromise should offer a larger repayment towards the ... Read debt consolidation article



Credit repair - The right way
The Right Way To Credit Repair by Dan Farrell If you have a bad credit rating, then you might find that your ability to get financing, loans, and even some jobs is greatly diminished. Once you have a bad credit rating, it might seem like there's nothing that you can do about it... but you don't have to believe that. It's not as difficult as you might think to get by with a b... Read debt consolidation article



Debt Settlement - All You Must Know
Debt Settlement companies work with your creditors to help you reduce your unsecured debts though arbitration and negations. The important thing to realize about Debt Settlement is that it is a different type of program than Consumer Credit Counseling or Debt Reduction. Traditionally, these types of programs work with your creditors to lower your interest rates. Debt Settlement companies work with your creditors to reduce your credit card and unsecured debt balances, sometimes by as much as 40-60%! While this type of program can be quite effective, there are some major issues that must also be considered.

Typically people in need of Debt Settlement are people who have suffered some type of financial hardship. This can range from job loss or divorce to medical issues. Debt Settlement is for people who are deep in debt and are without the means to repay their creditors. These types of people should be the only ones to use Debt Settlement. Debt Settlement should not be used by someone who is simply trying to escape their financial obligations.

When you begin a Debt Settlement program, there is normally some type of startup fee that will be charged for services. However, this fee should never be more than you're your monthly payments will be. Additionally, the company will most likely charge you a monthly maintenance fee. Some companies charge a flat fee of that ranges from 10-15% of your total outstanding balances.

Once you have joined a Debt Settlement program, you will start saving money, on a monthly basis, so it can build until you have enough money to begin settling on one or more of your current accounts. Under no circumstances should you do business with a company that requests that they hold your money in an "escrow account". You should always be in complete control of your settlement funds. The Debt Settlement Company will contact your creditors and begin negotiating a reduced payoff amount. Once the company negotiates an acceptable, written, settlement offer, they will arrange for you to send funds from your settlement account to pay off that debt. This process will be repeated for each creditor until all of your debts have been repaid. As each of your creditors receives payment, you should receive written confirmation documenting that your debt has been paid in full. This documentation should come from the creditor via your Debt Settlement Company.

It is important to remain cognizant of the fact that while you are accumulating funds in order to pay off your debts you are still accruing late fees and interest charges, which is increasing your balance. If the Debt Settlement Company that you are working with charge a settlement fee, request that the fee be based upon the original balance, not the current balance!

By not making the required minimum monthly payments to your creditors, it is possible that you are breaking the terms of your agreement with them and most likely will be reported to consumer reporting agencies as a delinquent customer. This is the case whether you are currently enrolled in a Debt Settlement program or not. Upon enrolling in a Debt Settlement program, your credit score will probably get worse before it gets better. Additionally, it is possible for creditors and third-party collection agencies to use legal means as a way to collect debts. However, the likelihood of being sued or having your wages garnished depends largely on the creditor that is owed money. If you currently earn a respectable salary, own a home that has a sizable amount of equity, or can most likely afford to repay your current debts without the use of credit counseling, Debt Settlement, or bankruptcy, then there is a possibility that a judgment may be filed against you if begin to miss your monthly payments.

It is important to consider both the pros and cons of Debt Settlement prior to using it as alternative to filing bankruptcy. In many cases, with a sound budget and proper planning, it is possible to avoid debt related problems altogether.

Alan Barnes IAPDA Certified Debt Arbitrator President and CEO of Debt Regret http://www.debtregret.com

What do you want to do?
Bookmark this page before you lose it
Search this site for FREE information
Help spread the word. E-mail this page to a friend

Debt Settlement Company - How to choose one

As consumer debt continues to spiral out of control, debt relief is fast becoming a major concern for many American's. In 1999, American's made $1.1 Trillion worth of credit card purchases. In 2001, American credit card debt hovered around $690 billion. Unfortunately, in today's unstable economic conditions, many American's are being forced to turn to credit cards as a way to extend their income. Consumer debt is at an all-time high and American's need to know what they can do to get out of debt. Often, consumers are seeking the services of professional debt settlement companies to help regain control of their finances. However, prior to making such an important decision, it is important to fully understand who you are doing business with.

The most important thing you can do when making the decision get help with your debt related problems is to be an informed consumer. It is absolutely critical to do your research. Do not rush into things; this can cause more harm that good. Prior to signing on with any Debt Settlement company, make sure you ask the following questions and consider their responses:

* How much does the service cost? For example, many debt settlement companies request that you pay your first three to four months of payments to them and set aside nothing for debt settlement. You want to choose a company that allows you to beginning saving for settlement from the day the program starts. A company that does this will most likely have your best interest in mind.

* Does the Debt Settlement Company you are considering report to any of the three major credit bureaus about your enrollment in their program? Traditionally, debt settlement companies do not report to credit bureaus; however, I have heard of a few that do. Creditors will normally elect to report derogatory information on your credit report, but the debt settlement company you do business with should not.

* Does the company offer any type of service guarantee? If so, what is the guarantee? If a company can not get settlement on your debt, you should never have to pay a fee, or the fee should be fully refunded. Additionally, steer clear of any debt settlement company that promises a quick fix to your debt related problems or tells you that debt settlement will not have a negative effect on your credit. Upon enrolling in a debt settlement program, your credit score will probably get worse before it gets better. This is a minor price to pay for being given a substantial debt settlement and not having to file for bankruptcy! However, it is important to realize that if you want to maintain a "good credit rating", you have to pay you bills on time; anything else will cause your credit score will suffer.

* Does the debt settlement company you are considering have IAPDA certified debt arbitrators? IAPDA certified debt arbitrators possess a solid understanding of the laws governing the Debt Settlement industry and fully understand your current financial situation.

* Does the debt settlement company you are considering offer any type of bankruptcy assistance should debt settlement not work out for you? For example, some debt settlement companies will offer a refund of some of the program costs to help pay for a bankruptcy attorney of your choice. Of course, the funds would have to be paid to a licensed attorney and not directly back to you. Again, a company that does this will most likely have your best interest in mind.

* Does the debt settlement company you are considering belong to the local Chamber of Commerce? If so, is the Chamber an accredited member of the Chamber of Commerce of the Unites States? This type of affiliation will help ensure that the company is conducting business in a proper manner.

* Is the debt settlement company you are considering a member of the Better Business Bureau? If they do not advertise this, you can always inquire with the BBB first. The BBB is a great way to determine if the company has a list of prior complaints. Any company with more than a few complaints per year is a company that you do not want to do business with.

Alan Barnes IAPDA Certified Debt Arbitrator
President and CEO of Debt Regret
http://www.debtregret.com


Top rated articles for debt consolidation

1. Government credit repair
If you are building a credit history, suffering bad credit or else your credit is great, there are sources available that will help you maintain credit, repair credit, and build credit history. If you... Read debt consolidation article

2. Reduce credit card debt - Tips and advice
Debt consolidation is the most effective type of credit card debt help. Most people get into credit card debt when they end up getting more than one credit card, and unfortunately, they usu... Read debt consolidation article

3. Credit Card Debt
Credit card debt is easy to ignore. You make the monthly minimum payment on your credit card debt and you just keep charging. Have you thought about the fact that you are spending your retirement mone... Read debt consolidation article

4. Debt Consolidation Service
Debt consolidation means many things to many people. For some a home equity loan is a form of debt consolidation. Many people obtain loans from banks, loan companies and credit unions to bring all the... Read debt consolidation article

5. Be Debt Free
Living debt free is the phenomenon of having credit available, using it wisely, saving religiously and planning accordingly. Some financial gurus explain that living debt free means having no debt at ... Read debt consolidation article

6. Different ways to repair bad credit
If you are looking for ways to repair bad credit you are like thousands of people in America that want a solution to bad credit problems. The good news is you can repair bad credit yourself and raise ... Read debt consolidation article

7. Consolidate Your Debt - You don't need a Home
No House, Alot of Debt, What Do You Do?

If you have a great amount of debt, especially if it's mostly from high interest credit cards or store accounts, you'd typically get a debt consolida... Read debt consolidation article

8. Debt consolidation - They found a fortune on the internet
It's exciting when people burdened with debt find a solution. Bill and Shona (real names changed for privacy) were up to their ears in financial problems when they decided on an unusual str... Read debt consolidation article

9. Eliminate debt with a 0 percent APR credit card
It is interesting to note that what started off as a marketing gimmick has now become an almost permanent part of the credit card industry in America and today 0% APR credit cards can in fact play a s... Read debt consolidation article

10. Joining a Consumer Credit Counseling Service for Debt Relief and Financial Freedom
Do You Need to Join a CCCS - Consumer Credit Counseling Service?

Are you in a "debt hell"? If you are unsure, ask yourself these questions:

Do you have bill collectors calling ... Read debt consolidation article

1. Student Loan Debt Consolidation Secrets
2. Debt Negotiation - What You Must Know
3. Consolidate debt and rebuild credit - Debt help online
4. How to deal with debt stress
5. Debt consolidation for the homeowners
6. Debt Consolidation Services - Get out of debt fast
7. Consolidate Credit Card Debt
8. Unsecured Debt Consolidation Loan
9. Low Rate Debt Consolidation
10. Get Out of Debt - A Teacher Takes Responsibility

Debt consolidation, debt counseling and debt management in Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi,



Debt Settlement - All You Must Know
Debt consolidation, debt counseling and debt management services in Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania,

Debt management, debt counseling and debt consolidation in Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington, Washington DC, West Virginia, Wisconsin and Wyoming.