Monday, February 28, 2011

Credit Card Debt Repair - Repair Your Credit and Settle Your Debt

I am sure you are wondering about what it takes to repair your credit and improve your FICO score. Well, you have indeed come to the right place. Credit card debt repair is by no means a simple process, but certainly a feasible one if you go about it the right way. By following these simple steps, you will be well on your way to improving your financial situation.

The first step of credit card debt repair is to assess the situation. To do this, you must run your credit report and see exactly what is going on. Are your accounts behind or are they current? If they are behind, you are in a perfect situation to negotiate on the balances and settle for less than what you actually owe. But if you are current, the creditors will be unwilling to settle for less. In this case, it might be a good idea to stop making payments to them. If you have a low FICO score already, it doesn’t make much sense to keep making minimum payments on an unsecured debt. The idea here is to become completely debt free as soon as possible. The most affordable way to do so is by using a debt service that provides debt settlement

Debt Settlement can be done on your own, but it would be advisable to hire a professional debt service company to handle the process for you. Most creditors and debt collection agencies are highly skilled in the art of negotiation and you may become frustrated while trying to deal with them. Good debt settlement companies generally are able to reach settlement agreements of 20-40% of what their clients originally owed. The best debt settlement companies do charge a fee, but the money they save you more than covers that.

Once your accounts are paid off through debt settlement, they will report on your actual credit report as 'settled in full'. The last step to credit card debt repair is to have these 'settled in full' accounts removed from your credit report entirely. Some debt settlement companies have attorneys on staff that can offer this service to you. The attorneys will work with the credit bureaus directly to have these particular accounts removed permanently. Once this is completed, your FICO score should increase dramatically.

Credit Counseling: What They Don't Want You to Know

More and more overextended consumers these days are seeking a solution to their debt problems. These consumers know that they must do something to address this situation, but most simply just do not know how to go about doing it.

Credit counseling (also commonly known as debt management) is one of the two most popular forms of debt relief. Many people who enter such a program are unaware of the potential ramifications it presents. Many credit counseling companies are for-profit organizations looking to bleed the last few dollars out of heavily indebted consumers. A lot of times all they do is leave the consumer with an unfulfilled promise to clear up their debt.

What credit counseling companies don't want you to know is quite simple: they work directly for the creditors you owe money to. They are paid by these same creditors in effort to ensure you pay back the full principle balance on your debts. Creditors are more than willing to do this because they know that they may eventually be forced to settle for less than the full amount on these delinquent accounts. Credit counseling companies thrive on your dire situation as they charge you a fee to simply reduce your interest rate. They also reserve the right to drop you from the program if you were to miss even one payment to them. If you look at a recent statement from one of your creditors, you may find that there is a contact number to a credit counseling company directly on the statement. Why you ask? Because the credit card companies want you to pay back the full principle balance, plus interest, even if you are struggling!

Most people in debt do not realize that they are in a prime position to negotiate with their creditors to reach a settlement agreement on their delinquent accounts. Once an account goes past due, credit card companies are more inclined to accept less than what you owe. In exchange, they agree to change the status of that account to "settled in full" on your credit report. A settlement requires you to come up with a lump sum of money but offers you an opportunity to get out of debt faster than you ever imagined.

It is advisable to weigh all of your options when considering seeking help with your debt. Does it make sense to seek help from the same folks that have done everything in their power to keep you in debt? Or should you hire a national debt service company to help you in a less costly, time efficient, manner...

Friday, February 4, 2011

Credit Card Debt Relief: How Does It Work?

Debt settlement is not for everyone, but is the most sensible form of credit card debt relief in many ways. It allows you to rid yourself of unsecured debt under your own power, while avoiding the ramifications bankruptcy presents. But for those with severe hardships and no capability of sustaining monthly payments, bankruptcy is the better option. It is important to have your unique financial situation thoroughly accessed before deciding which way to go.

What is debt settlement and how does it work?

Debt settlement is the act of negotiating with your creditors to reach settlement agreements on delinquent accounts with outstanding balances. Once an account goes past due, creditors view it as a liability and generally are willing to accept a lump sum of money amounting to less than what you actually owe. On the contrary, creditors are unwilling to settle for a lesser amount if you are able to keep up with your minimum payments each month. You have to remember that they are in the business of collecting interest from you over long periods of time. Therefore they won't agree to settle for less if you continue paying them every month. Typically a minimum payment on a credit card is calculated to keep the consumer in debt for a 12-15 year period.

The problem is that most people carrying unsecured debt do not have large sums of money available to put towards these settlements. Even a 33.3% settlement on a $3,000.00 account will require $1,000.00 to settle the account in full. For this reason, many people decide to seek the services of a professional credit card debt relief company. These companies offer programs which make this process affordable to the average consumer.

When enrolled in a credit card debt relief program, you are expected to make a payment each month into an account set up in your name. The sole purpose of this account is to save money for settlements. In the mean time, a team of debt negotiators work directly with the creditors to reach settlement agreements on your behalf. Once enough money is accumulated, delinquent accounts will be settled one by one until they are all settled in full. Credit card debt relief programs typically take 1-4 years to complete. The length of the program really depends on how much you can afford to put into it each month (the shorter the program the higher the monthly payment and vice versa).

One big misconception about debt settlement is that it ruins your credit score. In many instances that statement simply does not hold any truth. As I stated earlier, debt settlement is designed for people with accounts that are already delinquent or past due. So if a consumer has already been missing payments, the damage has already been done to his or her credit score. The only time debt settlement damages a credit score is when a consumer, who is in good standing with their creditors, decides to go delinquent. Otherwise, credit card debt relief programs have a tendency to improve ones credit score in the long run. Remember, being close to or above your credit limit tends to have an adverse affect on your credit score as well. So getting everything settled can only help improve your situation.

Now that you know a little bit about the debt settlement process and what it entails, I am sure you are wondering how to go about finding a professional debt service company you can trust. It is no secret that there are debt settlement companies out there that do not do the right thing. These "fly by night" companies generally charge an upfront fee before they even do anything for you. If you encounter a company that asks you for an upfront fee stay away! Reliable credit card debt relief companies with reasonable and beneficial fee structures do exist...

There are a few other specific credentials you should look for when deciding on a credit card debt relief company. The company you choose should have a high rating with the better business bureau (BBB), with no complaints or lawsuits filed against them. It is also important to be with a credit card debt relief company that has attorneys on staff.

Monday, February 22, 2010

Choosing The Right Debt Settlement Company

There are literally hundreds of companies popping up every day offering debt services. These companies gain advantage from the financial state most debtors are in, and make offers to consumers bringing down the debt settlement amounts to unthinkable figures. They use all of the bait possible to get the customers in their grip. With The help of legitimate debt settlement companies consumers can realistically eliminate 50% of their unsecured debt.

Most important things first, look at the offers manufactured by the numerous debt settlement companies before making a choice to use the services offered by them. If the company asks for an advance fee, look for another. Instead, look for a company that accepts payment on a once a month basis. All legitimized debt settlement companies will follow rules as per best business policies and practices. They will never scorch a hole in your pocket. Most debt settlement firms will accept costs that amounts to anywhere between 10 to 20 % of the debt they are actually able to eliminate.

This fee is acceptable to most consumers who are at least $10k in unsecured debt, as they are going to work toward relieving you from virtually 50 % of your present burden of debt. If they insist on higher costs, show them the door! If the debt settlement company isn't listed with the the Better Business Bureau, you should go with a company that is instead.. This organization lays a check on the business practices adopted by all firms, and enrolls only those that follow moral business practices. It's simple to check the record of any debt settlement company and discover if it is reliable or not.

Some debt settlement companies are known as the best in their game of debt negotiation. A legitimate debt settlement company will cut back your credit balance by nearly 50 % on average. They work on no guarantee, but deliver the most satisfactory results due to their fantastic rapport with the credit card firms and fiscal institutes.

Getting rid of unsecured debt hasn't ever been so simple for purchasers with balances over $10,000. A pro debt settlement company will be ready to eliminate credit card debt by 50% normally. They also provide free debt support.