Debt negotiation company

Compare Debt Negotiation Vs Credit Counseling

admin — Wed, 08 Sep 2010 03:43:14 +0000

Two of the most common options to help you deal with debt problems include debt negotiation and credit counseling. Today we compare debt negotiation vs credit counseling and discover why one option may be better for you than the other. Both options are designed to help you get your credit card debt under control.

First let’s take a look at debt negotiation.

Debt negotiation is the American way. You can haggle with your creditors and work out an agreement that both of you aren’t 100% satisfied with but will accept to reach a compromise on your accounts.

You use debt negotiation when you are having trouble keeping up with your minimum payments.

You can ask for a longer payment period, a reduction in the minimum monthly payment required, a lower interest rate, or even possibly a reduction in the principal balance.

The best benefit of debt negotiation is you can negotiate one lump sum payment to wipe out your entire balance in one fell swoop. This is also known as a debt settlement.

The disadvantage of credit card negotiation is that your creditors will usually not be willing to negotiate with you unless you are behind on your payments which has a very negative effect on your credit score.

However, this lower credit score can be overcome in a short period of time once you have no more credit card debt and can make all your payments on time in the future.

One last benefit of debt negotiation is you can learn to do it yourself. Your creditors would actually prefer you did it this way instead of hiring a third-party debt negotiation company.

Now let’s take a look at credit counseling.

Credit counseling is when you contact a credit counselor who will work with all your creditors and get them to accept a lower monthly payment stretched out over a longer period of time.

It is similar to debt consolidation.

You make just one monthly payment to the credit counseling service and they distribute that amongst all your creditors.

A credit counselor will also work to cease debt collection calls and get you a lower interest rate.

You may have to pay a small monthly fee of $25-$50 to the service for the administration of your account.

The benefit of credit counseling is your credit score is not as damaged as with debt settlement and negotiation.

One of the disadvantages is your principal is not reduced.

Another disadvantage of credit counseling is the prevalence of fraudulent companies in the industry. You have to do your due diligence and make sure he you are working with a legit company before you send them any money.

This is not a concern with do-it-yourself negotiation.

When you compare debt negotiation vs credit counseling you can see that each auction has its merits. While debt negotiation may be the solution for you, credit counseling may be a better option for someone else. Each consumer situation is unique and there is no one-size-fits-all debt solution that will work for everyone.

With a little bit of homework, you can discover which one is more appropriate for your credit card debt problems.

By: Adam Tijerina

Negotiating Credit Card Debt With the Creditors – Get the Professionals to Help You

admin — Mon, 30 Aug 2010 14:45:41 +0000

One of the options in order to solve your credit card debt is by going through a credit consolidation company. They will help you pay your debt off but in return they will charge you with different terms of interest rates. Another option is by negotiating credit card debt with your creditors.

You can directly approach your creditors, get an appointment and get further to negotiate your debt situation. There is a great possibility that they will make a negotiation with you since you are calling on your own behalf and at least willing to pay the bill off. If you feel not capable enough to face the creditors, then you can get a service from professional who is well verse in dealing with debt settlement. Their specialties in debt negotiation will help you get the most in settlement of your debt.

Most of the time when people opt to use a professional credit card debt negotiation company, it is well known that these companies can get better “deals” for people than if the people tried to make the negotiations themselves! One of the reasons why these professionals are capable to get better deals is because they are strictly deal with making negotiations and also they know how to barter and negotiate with the creditors!

One of the best ways to get the help from a professional negotiator is by looking up and reading up on many of them on the internet. It is there; that you will be able to see which ones are really the good guys and which are not! So, don’t hesitate in going for negotiating credit card debt. It is surely an option available for all.

By: Zul Wafiy

Simple Guide to Negotiating Credit Card Debt Yourself

admin — Wed, 25 Aug 2010 05:24:10 +0000

For many people, overwhelming credit card debt is not the thing that they fear having happen to them the most financially. When a wave of credit card debt crashes on you, though, you are sure to feel a distinct sinking feeling.

Take heart, though, because they are lots of ways to deal with credit card debt effectively. One option is credit card debt negotiation. This method reduces the total amount of debt that you owe or at least helps you to discover a payment plan that is easier for you to carry out.

Credit card negotiation plans can be employed once the account has been passed on by the credit card company to a third-party collection agency. You very well may be able to negotiate a four thousand dollar outstanding balance into two thousand dollars if you are willing to pay a lump sum.

The company’s ultimate goal is receiving some kind of money from you. For that reason, it is actually more advantageous for them to accept your lump sum payment. It also works out great for the person that owes the money since their debt goes away.

Both parties involved, lender and debtor, receive benefits from credit card debt negotiation plans. Filing for bankruptcy or ignoring your debt will cause much more damaging effects to your credit than debt negotiation ever will.

How to Do It

The most effective way to negotiate your credit card debt is also the cheapest; calling the creditors whom you owe money to and letting them know about your situation. This will not work out perfectly in every situation, but it is likely that at least one or even several may be willing to work with you.

In the perfect and thus unrealistic situation that we all dream of, all the debt collectors you call would be happy to reduce you debt. This is not the case, but if you manage to find even just one company willing to cut you debt in half, your credit card negotiation plans will have been completely successful.

By: W. M. Blake

Using a Debt Settlement Company As a Bankruptcy Alternative

admin — Tue, 24 Aug 2010 11:38:47 +0000

With the number of home foreclosures on the rise, people are finding themselves deeper in debt than ever before. Individuals are being faced with having to seeking a solution to this financial problem and many are turning to the bankruptcy courts. Looking for a bankruptcy alternative is in your best interests. A bankruptcy can remain on your credit record for up to ten years. Besides that, bankruptcy is not the fresh start that it has been in the past.

If you find yourself faced with this financial decision, consider a debt settlement company as a bankruptcy alternative. Debt negotiation can have you out of debt in as little as a year and most these programs take no longer than 3 years. It all depends on how much debt you have and how fast you can save the money to pay it off.

Debt Settlement companies work with your creditors to have your account balances reduced. Many of them can get your bottom lines reduced by 50% or more, enabling you to pay it off quicker. Why a debt settlement company? They have an established relationship with most lenders can often negotiate a better deal than most people can on their own.

This alternative to Chapter 13 is just that-a last resort option, but it works. Debt settlement companies have helped thousands of people pay off their credit cards and begin living their lives without debt.

You must understand that this is probably not the best option for you if your bills are current. But there are people that have a large amount of outstanding liabilities that opt for debt settlement, because it is the quickest way out of their present financial dilemma.

Like anything, there are some disadvantages to debt settlement. The first is that it will impact your credit record negatively, but not as negatively as a bankruptcy. Once you are out of debt, you will be in a position to rebuild your credit. So the quicker you pay your accounts, the sooner you will be able to see your credit score improve.

Debt negotiation will work for most unsecured debt. This is your bankruptcy alternative to paying off your debt quickly and discreetly. If you have past due balances or owe a large amount of money you may want to consider a debt settlement company as an alternative to bankruptcy.

Using a debt elimination secrets is a bankruptcy alternative that can get you out of debt quickly. Sometimes it is hard to know which way to turn when financial help is needed.

By: Arlene Schneider

Honest Debt Settlement Companies – Do They Exist?

admin — Thu, 12 Aug 2010 06:47:03 +0000

The short answer is yes – honest debt settlement companies do exist. Now, let’s closely examine why it is you’re inquiring. If you’re experiencing financial difficulty, and have a strong desire to avoid bankruptcy, you’ve probably found an infinite amount of information from various sources relating to debt negotiation firms. And, much of this information contains either negative remarks or plenty of cautionary tales.

Are these stories true? In fact, many of them are – but much of what you’re hearing about the entire debt settlement industry is also simply not factual. If you take the proper time to carefully research any firm you’re considering to assist you with debt settlement, you should be just fine. Here are some tips to help you choose the right company:

The Truth About Debt Negotiation (Settlement)

admin — Thu, 12 Aug 2010 05:40:51 +0000

LOWER YOUR PAYMENT BY 50% – You’ve seen the ads. They certainly are enticing especially when you are buried under a mound of debt. But should you do it? What’s this all about?

Chances are they are talking about debt negotiation or debt settlement. Is debt negotiation right for you? What are the pros and cons of debt settlement?

Many readers have commented about debt negotiation. The following, therefore is from numerous contributors and by permission. The content is intentionally both pro and con as the nature of these comments is based upon offering pointers for negotiation and settlement from those who have already experienced debt settlement.

CAUTION

But before offering comments from those who have been there I feel compelled to offer warnings about debt negotiation or debt settlement . A recent ad touts the excited relief of a young lady who is sooooooo at peace because her agency eliminated 60% of her credit card debt. I am not a credit card industry fan but a few issues are painfully absent from the ad.

First, consider yourself as the creditor. What would entice you to accept less than the full amount of the original debt. The only enticement I can think of is if the creditor believes he/she will not get anything more. The only way to make that strong argument is to stop making payment for a few months. In other words, the debtor’s credit history is trashed.

Secondly, you may owe income tax on the debt forgiven. Any write off of $600 or more is considered income to you, the consumer. The creditor will send you and the IRS a Form 1099-C at the end of the tax year and the amount forgiven will be considered added income by the IRS.

Third, there is no guarantee that any forgiven debt will not come back to haunt you in later years. It is possible full payment could still be expected in the future.

Finally, unless agreed to by the creditor, any negative comment placed on your credit report will remain for 7 plus years.

COMMENTS FROM OTHERS

Sound advice for anyone contemplating the use of any debt management services
Anyone who plans on using a 3rd party to handle their finances, should check them out with the BBB and State Attorney General’s Office of Consumer Protection services have mislead people about the impact the service would have on their credit rating, the fees involved, and the possibility of legal action from the creditors. On a debt management program, it’s important for people to know that their credit will be impacted- negatively for some lenders…. It’s important to know the fees. Is there: a monthly charge… a set up charge… a penalty for leaving the program? Are these fees mandatory? Genuine non-profits should not have mandatory fees.

The last thing to emphasize is that the creditors can take legal action against debtors even if they are using a debt management service….”

Settlement not the same as Chapter 13.

“… However, there are real differences: First, settlement is not a public record. Your credit record is not public. There is no record in the judicial court to show that you have settled the accounts. However, bankruptcy record is a public record. Second, if you settle, you answer “No” to the question, “Have you ever filed bankruptcy?”

You really do have to be quite delinquent on your payments.

“Not every call went the same. Some would accept my 50% offer. Some needed some prodding. Some, I hinted at bankruptcy. Some wanted to know the reason behind my situation. I wasn’t always honest with them, they never seemed to double check anything I said.

“I would seriously suggest though that you be close to 6 months delinquent. Keep in mind though, that if your credit is good now, it won’t be after these types of lates. In my personal situation, my score was so low, that it shot up just by virtue of getting thousands of dollars off my debt.

“Be prepared to do a little haggling. Always offer less than your actual goal. Be prepared to pay over the phone. But also refuse to do anything until you see an offer in writing. Remember, they have to believe that 50% of your money is better than 0% of your money.

“All in all, it was an extremely easy process. Certainly I would always recommend someone do it himself or herself. You can pay someone hundreds, or thousands, of dollars to make phone calls you can make yourself.

“Also, keep in mind there are tax implications for settling. “

Stages of Settlement

“… Also in the early stage, the offer of settlement (if at all) is usually around 70-75%. [XYZ Company] offered me settlement in that range when my account is 30 days past due. I think only in late stage of delinquency, you will get an offer like 50% settlement.

“But if you do a calculation, a 50% settlement after 6 months delinquency is not necessarily cheaper than a 70-75% settlement after 1 month delinquency. The bank will still charge you interests, late payment penalty, or even over limit fee (if applies) while your account is in delinquency.”

Settlements are not a good route

“… Settlements are reported to the bureau as ‘paid ‘. This is not ‘paid as agreed’ as you would want, but instead showing that you had to settle instead of paying off the full balance. This stays on your credit report for 7-10 years and lowers your overall credit score dramatically. If at all possible, I would try to work out a repayment plan to get out of debt. If the interest rate is too high and you cannot reasonably get out of debt in the next 5 years, you might want to look into credit counseling. Again, this is a short-term pain long-term gain philosophy. “

55% is pretty good!

“… 55% is a pretty good offer. They always want you too settle on the spot. I never agreed to anything without something in writing. I even went so far as to hold on the phone for 15 minutes while they typed up an agreement and faxed it to me, making small talk to the guy the whole time. I then gave them my information and did a check over the phone.

“I am pretty passionate on this issue. Those that give you gloom and doom scenarios for settlements make me a tad heated. My opinion is that suffering under large sums of debt is complete and total financial suicide. These are debts that you will carry on your back for years and years and years making the minimum payments, all the while having charges added to your accounts. Accounts never ever seem to get smaller.

Get out of debt any way you can!

“GET OUT OF DEBT ANY WAY YOU CAN! My score was in the bottom 1% of scores. A year after settling all my accounts (about 50k of debt) my score is way up, as is my wife’s, and we just bought a house with a no-money-down loan.

“Had we followed the advice of those that tout credit score over everything, we would still be killing ourselves making the monthly payments, hoping 10 years from now to have some relief. Now all of our debts are paid off, we have only mortgage, and monthly utilities, and we’re able to save almost $1,000 a month. Now THAT is something my family could have never done had we been scrapping for the next eternity, trying to pay off thousands of dollars of debt $20 at a time.

“What in the world good does a great credit score do when you can’t even pay your bills each month? Get out of debt first, then start worrying about buying a house, or a new car, etc. Claiming a high credit score, while wasting hundreds of dollars every month on 21% interest is lunacy, in my opinion.”

Negotiating company can do NO BETTER than you can do yourself

“I’m convinced after doing all my own negotiating myself, if an account has not had legal action taken against it, a negotiating company can do NO BETTER than you can do yourself.

“I negotiated about 50k in debt and paid it at about .50 cents on the dollar. One account charged-off and they wouldn’t talk to me. So after a suit had been filed I hired a ‘law-firm’ (debt negotiator) to represent me. The account was about $5,500, but they had added court costs of about $1,200. Finally negotiated these terms. Court costs dismissed, and $175/month, 10% interest on a balance of $5,700.

Attorney Robin Leonard

Attorney Robin Leonard in his book Money Troubles from Nolo Press offers the following debt negotiation tips.

Be honest but paint the bleakest picture of your finances. Elaborate on any illness, layoff, accidents, repossessions, back taxes, etc.

If considering bankruptcy, say so. But do not incur any other debt after saying so. If you do you may not be able to discharge them in bankruptcy.

Never disclose where you work or bank. If you are later sued by this same person and get a judgement against you, you have just made their job that much easier. Simply answer the question, “No comment”.

Rather than sending a check from your bank, get a money order or cashier’s check so as to protect the name of your bank.

If considering a lawyer, remember that though a lawyer carries clout and can do a good job, they cost money. Don’t hire one unless you owe a great deal and have a reasonable chance of a very good deal. If you have to pay a lawyer, sometimes what you save in settlement you lose.
If contacted by more than one creditor for the same debt, it probably means the debt was sold a second time and you have avoided the first collector superbly well. In other words you are very difficult to get hold of and it is a very old debt. Many secondary and tertiary collectors at this stage might be willing to accept 33-50 cents on the dollar and possibly even less.

If the collector agrees to settle for less, be sure it is also agreed to indicate “satisfied in full” in your credit report.

If the collector agrees to far less than the original amount, make sure the deal makes financial sense.

Readers will probably be interested to know Mike, the author of this article, also offers a free debt elimination mini-course via e-mail. You can enroll at Debt Free In 7.5 Years.

By: Michael Killian

Debt Consolidation Vs Debt Negotiation

admin — Fri, 23 Jul 2010 03:03:26 +0000

Debt consolidations against debt negotiation are two alternatives that are accessible to you if you require debt support. As soon as your monthly bills turn out to be surplus for you to manage, it creates some sense to utilize debt combination or cooperation for solving liability as well as credit troubles.

Debt consolidation services include reproved debt refund plans through most credit cards along with collection companionship. As soon as you recruit with a debt consolidation company, you are presented a lower monthly payment based on a lesser interest price they have acceptable in the company of the creditor.

This payment is lesser than what the credit card groups present you, saves you some amount each month and is frequently the best way to merge debt.

One advantage of a liability consolidation refund plan is it will discontinue you from being stressed by the creditors on condition that you make the new, lesser monthly payments.

Liability cooperation is more over referred to as settlement. This is most often presented to people who cannot manage a debt consolidation agenda. If you cannot make the smallest amount of the payment of a liability consolidation refund program or else haven’t prepared to pay in the earlier period of 3 months, a debt cooperation plan is the consequently step for solving debt as well as credit evils.

One advantage of a cooperation plan is you discontinue to make payments to your creditors. The cooperation company moreover receives monthly payments from you and keeps it in an account, or else allows you to keep the amount in your own account.

Despite the fact that you are making these monthly expenses to the debt cooperation company, they consult with your creditors for a lesser payoff of approximately 40-50% of your entire sum of liability. Once the consulted, agreement is settled upon with your creditors, the debt cooperation company builds a single payment to them.

A disadvantage of the cooperation plan is it reduces your credit score for as long as you are in the agenda. On the other hand, many debt negotiation companies want the creditor to build the credit report show paid in full so it does not show up as a unenthusiastic on your account once your report is established. Some debt cooperation company includes a credit repair service that will get rid of the harmful items caused by the debt cooperation plan.

By: Subodh Jain

Debt Management Systems

admin — Mon, 28 Jun 2010 03:29:31 +0000

What is a debt management system, and when do you need it? Like any kind of management system, debt help systems can be good or bad. We will take a look at what you can do to manage your debt better. One element is paying off debt, but that’s not the only one. It is much more than paying off your credit cards, and doesn’t end when you pay off your mortgage or car loan either. You have to make a system of good money management, and follow this system in your daily life. Here are the key elements in such a system:

Make a budget

The purpose of making a budget is to keep track of the money that comes in and get’s out of your economy. This is basic in every financial system and absolutely necessary to stay on track. Unfortunately too few people are actually doing this and many are even living above their means. Approximately 10 percent of the American people spends 10 percent more than they make each month. If this can be called a system for managing debt, it’s indeed a bad one.

Follow your budget

Now, it’s necessary and great to make a budget. But you’ll also have to follow it. There’s no meaning in using time and effort on making it, if it’s only function is to stay in a drawer.

The first symptom of not following it is experiencing a growing need for debt relief. As soon as you eventually see this, you must put all your effort in getting back on track. This might take a bit of time, but it’s absolutely obtainable.

What to do if you get off track

If you for some reason do not follow the budget you have made, you need to find a program that can help you get back on track again.

There are many such programs that can help you obtain debt relief. What such programs have in common are that they

help you organize a plan to pay off debt offer advice on how to stay on track with your budget.

The criteria for chosing a plan is that it must be realistic with regard to the time it will take to bring you back on track. If you make goals that are too high, you are setting yourself up to fail, which means a big risk of falling back into your old habits. The average length of a credit-counseling program for example, can range from four to six years.

Credit counseling

This kind of program for managing your debt, is to create a realistic budget, adjusted to the new financial situation you are in right now. Counselors are professionals, who teach their clients good money management.
You can also get help to reorganize your debt payments. This is done by consolidating all your monthly payments into one. You don’t have to pay each creditor bill by bill. The various payments are automatically distributed to all of your creditors, from this single payment. This normally means decreased interest rates and no over the limit or charging late fees.

Loan consolidation

Loan consolidation programs have much in common with the type of program described above. The main difference here is that all your debt is consolidated into one loan, which usually has a low interest rate.

Debt negotiation

This kind of program is also called debt settlement. The main element in this way to manage your debt is to outsource your problems to a debt negotiation firm, which negotiate with your creditors to reduce the total principal of your debt. The main difference from counselling is that your amount of debt are modified, not the interest rates.

This is the most radical program and is probably the quickest way to debt relief there is. In USA the average length of a such a program is three years.

By: Terje Ellingsen

Negotiations to Lower Your Credit Card Debt

admin — Fri, 25 Jun 2010 07:33:49 +0000

Credit card debt consolidation method has become a popular solution for those with huge credit card debt. In order to handle the debts, you can look for a reputable debt consolidation company to settle your credit card debt. Why is it important to find for a trusted company? Well, your consolidator can help you to negotiate with the creditors to lower the payment of your debt.

First and foremost, your creditor will negotiate about the interest rate. There are lots of different interest rates offered by the banks for as low as 0% (for a certain promotional period). Therefore, your consolidator will take the best rate as leverage to persuade them to offer a lower interest rate for your remaining debt.

Besides that, your consolidator will help you to negotiate the monthly payment. From the negotiation, sometimes, the credit card company might agree to hold the payment for a few months until you can afford to do so if you are having difficulties in paying for your debt.

Another thing that your consolidator will negotiate about is the type of credit. There are many credit-card companies which offer lines of credit with lower interest rate as compared to their credit-card. So, you can save the interest needed to pay if you have a good credit rating. Besides, if you can offer some sort of security to the credit card company such as your house or your properties, you can also save a huge amount of interest.

Therefore, choosing the right debt consolidation firm is important to help in negotiating with the credit-card company.

By: Simon Atasinchi

Which Debts Are Eligible For Debt Negotiation?

admin — Thu, 17 Jun 2010 08:09:55 +0000

Debt negotiation, also called debt arbitration is an aggressive approach to paying off your bills by reducing the amount of the balance that is owed on your unsecured debts. Also this is perhaps one of the best alternatives that you have to filing for bankruptcy. Debt settlement is becoming a more accepted method of getting out of debt and there are more agencies available to help people negotiate with their creditors.

This is not something that should be undertaken lightly. Once you enter into a debt settlement program it is something that you should follow as it is agreed upon. If you are not in position to do this, you may want to consider bankruptcy. But if you are serious and have the resources, this is a method that will get you out of debt relatively quickly and can save you a lot of money.

There are many types of accounts that can be settled through negotiation. Here are some of the accounts that are eligible:

*Credit Cards

*Medical Bills

*Department Store Credit Cards

*Gas Credit Cards

*Unsecured Personal Loans

*Past Due Rent

*Auto Repossessions

*Utility Bills

There are some debts that you will not be able to enter into a program. These are:

*Mortgages

*Car Payments

*Student Loans

*Secured Loans

*Income Tax Payments

Debt negotiation organizations can negotiate with your creditors to get your eligible balances reduced by a certain percentage that normally ranges from 30-50%, but can be as much as 85%. You will make monthly payments to the debt settlement agency and once the agreed upon amount is paid to the agency, they will in turn pay your creditors one-by-one.

Normally, the debt settlement company will have all the future contact with your creditors. Your creditors will deal with credit counselor as they negotiate your debts to come to a payment arrangement that is acceptable to both you and your creditors.

Most companies want their clients to have at least $10,000 in debt and each account must be at least $1,000. If your debt is less than this amount, there are other methods of paying off your accounts that would work better for you.

Entering into a program is not an easy decision, but debt negotiation can get you out of debt quickly and can save you a lot of money. Once you have enrolled in a program to payoff your bills, you will soon be able to concentrate your efforts on rebuilding your credit and getting your finances back on track.

By: Arlene Schneider