What is Debt Management
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There's a lot of information about debt consolidation on this website. There are a number of ways to do this and it depends on your level of debt and your circumstances as to which would be best for you.
Do your own research, get some quotes and choose what seems 'right' for you.
Good luck!
This is a lifesaver!
New blog post: Unsecured Loans for People with Bad Credit: Crack Your Financial Difficulties With Ease
debt settlement is the obvious choice. if you dont have the money to do, save up for it.
Skip that – they trash your credit for many years to come.
You can do the same things that they do.
Get this book from your library or buy it – Total Money Makeover by Dave Ramsey.
If you follow his program you can defeat the debt on your own.
I dumped $70k of debt in 16 months and now I am debt free and building wealth.
You can catch him on the radio also. If you cant get him there, you can get his broadcasts via his website.
If you want all his spreadhseets, etc – I have them in excel.
Speedracerx@gmail.com
The answer to the question “which debt settlement program should I choose?” is very simple: NONE OF THEM… but not for the reasons that most people offer. I’ll advise you not choose a debt settlement company because – even if you find a high-integrity, ethical debt settlement company – there is a far superior alternative: DEBT RESOLUTION. The concepts are similar, but Debt Resolution provides benefits that debt settlement can not offer, at a better price. I only have room for a limited explanation, but here are some of the key (very important) differences between debt settlement and debt resolution.
Basically, debt settlement companies act as a collection agencies for the credit card companies. They get involved before the creditor refers the account to an outside agency, collect a bundle of money from the borrower over time, take their hefty fees, and offer the balance to the creditor as a settlement. They are PRIVATE COMPANIES offering a service. They do not and can not represent the borrower.
Debt resolution, alternatively, is an attorney-managed process whereby an attorney negotiates with the creditor on the borrower’s behalf. This is a legal transaction that only an attorney can perform, and results in a settled mitigation on the borrower’s behalf. There are some critical advantages to this.
Key differences between debt settlement and debt resolution:
PERFORMANCE GUARANTEE – Debt settlement companies cannot guarantee a settlement amount. Debt Resolution guarantees settlement at 45% of the original debt (which also includes the attorney fees). Also, with Debt Resolution, no additional fees will be requested if the debt increases after the agreement is signed, which is very important because once credit card payments get behind, fees and rate hikes get applied to the account, significantly increasing the balance. Debt settlement companies may take advantage of this by charging fees on the balance when the account is settled, not the original balance. And since plans may take several years to complete, balances (and the corresponding fees) can increase dramatically.
TAX CONSEQUENCES – Debt settlement companies generally don’t point out to borrowers that when a creditor agrees to settle, they generally send the borrower an IRS Form 1099 for the amount written-off. This means that if the borrower has $50,000 in unsecured debt, and the creditor accepts 60%, or $30,000 as a settlement, they will send the borrower a Form 1099 which shows that $20,000 write-off as income to the borrower. Even though the borrower didn’t receive any actual cash from the creditor, they may still have to pay tax on $20,000 of additional income. With the attorney-managed Debt Resolution program, the resolved amount is a legal agreement between the parties, and since no cash was provided to the borrower in the form of actual income from the creditor, THERE ARE NO TAX CONSEQUENCES.
CREDITOR HARASSMENT – Debt settlement companies can’t represent a borrower, so they can’t really stop harassing phone calls from collection agents. They may explain that the borrower is in a debt settlement program, but that could potentially backfire and cause the creditor to accelerate their collection efforts, or even file a lawsuit. The attorney–managed Debt Resolution system leverages good faith debt laws to protect consumer rights. Once the creditor receives the first letter from the attorney, they are prohibited by law from pursuing collection efforts against a consumer who withholds payments due to a good faith billing dispute. If the creditor still communicates with the borrower, the borrower should notify the attorney, who will inform the creditor why they have no right to pursue further collection efforts.
FEES AND ALLOCATION OF PAYMENTS – Debt Resolution is, in most cases, significantly less expensive than debt settlement… and the fee structure is completely transparent. The Debt Resolution administration and processing is just 5% of the total contracted debt (compared to 10-15% or more that most debt settlement companies charge). And that 5% is based on the balances on the contract date, not the settlement date – so increasing balances will NOT result in increased fees. Debt Resolution also has a one-time $500 enrollment fee to establish the paperwork and accounts, and compensate the attorney for efforts to cease collection calls, etc… Some debt settlement companies don’t charge an upfront fee to enroll, but they “front-load” their monthly payments with fees – a majority of the payment for the first several months goes toward company fees rather than into the borrower’s settlement account (so they still get their money upfront). Some even charge monthly fees on top of their high percentage fee.
These are just a few of the reasons (there are more) why Debt Resolution is superior to debt settlement. If you’re friend is seriously interested in resolving their $70,000 unsecured debt for $31,500 (plus a $500 enrollment fee), and wants to do so while avoiding harassing creditor calls, surprise tax bills, and exorbitant fees, visit http://www.BetterThanDebtSettlement.com.
Get Help With Credit Card Debt – Tracking Down the Best Debt Settlement Companies
Please save your Business Reply Postage Paid Envelopes from credit card offers. Then Mail the credit companies a brick or other heavy object using their own postage permit. This is a legitamate business reply as long as it goes to the address printed with the permit #
Well Done! very impressed as an ethical debt consultant i feel that the most important thing is to tell people that they can do it them selves. Bravo
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uninformative
if you had only revoving credit and you are geting a loan that will actualy increase your credit score
I can almost answer your question. "How can I tell if a Debt Management Company is NOT reputible?"
Answer: Their mouth is moving!
Quit looking for someone else to fix your problem for you! Fix it yourself and learn the lessons from it.