In today’s tough financial times, we are more and more feeling the heat of issues such as debts and mortgages, and as a result, debt settlement is turning out to be a major concern for many people. Many credit counseling agencies provide debt settlement options to overcome the difficult financial situation and the stress that accompanies it.

Debt settlement is very helpful to reduce and negotiate the financial obligations you have, especially if they are past due. The agencies are there to help such people who are in serious financial trouble because of their debts and past due status. The professionals are there to help you out if you are facing this problem.

What happens is that the lenders will agree to settle for an amount if the borrower faces bankruptcy. In such cases, the agents will help you to negotiate with the lender and determine an amount that is less than the total debt owed and which you can afford. The negotiated amount is to be given to the lender and that frees you from your debts.

From the standpoint of the lender, this is better for him because if he does not agree to it, you could file for bankruptcy and then he probably won’t see any of the money, so it is more beneficial to him to settle for the negotiated debt settlement amount.

But you should definitely use a company or agency for debt settlement negotiations instead of trying to do it yourself. The people at these companies are professionals in the financial industry, and they know exactly how far they can push a lender before the lender basically becomes unglued and decides to file a judgment against you. You definitely do not want a judgment against you, because if that happens, not even bankruptcy will clear a judgment that was in place before you filed.

Debt settlement is much better than bankruptcy and can be a better solution for many people when compared to debt consolidation. If you are deep in financial problems, look into debt settlement now before things get totally out of hand. The absolute worst thing you can do is nothing, so take action today.

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Agency card credit debt settlement

Should I use an agency for credit card debt settlement?

Some people like to deal with their credit card debt all by themselves. However, some people do use credit card debt settlement agency. There can be various reasons for going for a credit card debt settlement agency. Some people use a credit card debt settlement agency because they are not comfortable in dealing with credit card debt settlement by themselves. Some go for a credit card debt settlement agency because they don’t have the time to do the research and evaluate options for credit card debt settlement. Others just want professional advice and hence they contact credit card debt settlement agency.

Whatever be the reason for employing a credit card debt settlement agency, a good credit card debt settlement agency would surely be of help. However, it’s important that you select a good credit card debt settlement agency. Do not fall for ads of credit card debt settlement agencies that promise to wipe off your debt overnight. No credit card debt settlement agency or anyone else can do that. You should select a credit card debt settlement agency which has verifiable credentials or a credit card debt settlement agency that you know has a good reputation.

If some friend has been through this process previously, they might be able to recommend a credit card debt settlement agency to you. Sometimes you will find ads that promise impossible things and ask you to call a telephone number that’s a premium line. So beware, or else you might end up paying heavy phone bills that would just add to your debt.

Some credit card debt settlement agencies might be having a very low fee but no reputation. These are again the credit card debt settlement agencies that you should avoid. However, once you find a reputable credit card debt settlement agency, do not try to hide debt related information from them, no matter how bad your debt it. That is another reason for looking for a reputable credit card debt settlement agency.

If the credit card debt settlement agency is not a reputable one, you would not be able to trust them; and trust is very important here otherwise you will neither be able to tell them the full story and nor follow their advice. That said, it’s important to note that no credit card debt settlement agency will be able to help you if you are not ready to help yourself. So, follow the advice given by credit card debt settlement agency and practice good spending habits.

Debt Settlement Financial Options

When it comes to consolidating debt, the internet offers three very good options. When you want to choose between a consolidation loan, debt management, or debt settlement, it is important to have an understanding of each one so you can choose the option that is best for your needs. Many people confuse these three services, but each one brings unique aspects to the job of helping consumers pay off their debts.

Debt Consolidation Loan: A consolidation loan takes all of your high interest credit card debts and turns them into one low interest loan. Often you have to be a home owner to qualify for this type of loan. The idea behind a consolidation loan is that with a lower interest rate, you will actually be able to afford to pay on the principle and that will help you to eventually get yourself out of debt.

Debt Management: Debt management companies work with consumers to help them learn to get control of their finances. The companies teach individuals how to make a budget and stick to it and often help them make a schedule to follow for paying off their debts. Most debt management companies are non profit and exist solely to help consumers get on track. These companies don’t offer loans or negotiations and seldom work with creditors. Instead they work with you so you will have the tools to secure your financial future.

Debt Settlement: Debt settlement companies actually go to your creditors on your behalf. The work hard to negotiate with credit card companies to reduce what you actually owe. They can often lower interest rates, have penalties and late payment fees removed, and even get credit card companies to lower the balance of what you owe. Many of them will set up a system where you pay them one amount each month and then they in turn make payments to your credit card companies.

Debt settlement, also known as debt negotiation or debt reduction, is a relatively new way for dealing with your debt problems. In a debt settlement program, by negotiating with a creditor, a client can reduce their debt by as much as 50 percent and be debt free in as little as 12 to 36 months.

Debt settlement is a great solution for consumers feeling overwhelmed with credit card debt that find themselves either falling behind on their payments or just able to afford the minimums. Considering the savings, in most cases it’s worth doing if you find yourself in any of the aforementioned situations. As with any debt solution, however, there are potential downsides to debt settlement that should always be considered prior to enrollment.

First, debt settlement may have an adverse impact on your credit, particularly while you’re in the program. To put this point in perspective, however, it’s important to remember the following:

1) any third party debt counseling program and even debt consolidation loans from finance companies like Beneficial may affect your credit negatively in the eyes of lenders,

2) the effect on your credit in the long-term is minimal, given the fact you’ll be eliminating all your credit card debt (amount owed is 30 percent of your credit score, compared to credit history, which makes up 35 percent of your score) and 3) if you’re falling behind or about to fall behind anyway, then your credit has been or will be affected negatively anyway.

Realistically, the two main draw backs of debt settlement that are unique to debt settlement are the following: 1) the possibility of legal action being taken by the creditor to collect the full balance and 2) the possibility of creditors harassing you until the debt is settled.

Thankfully, if you’re doing debt settlement in Texas or even debt settlement in Florida, these concerns are very much diminished. Why is Florida debt settlement so preferable compared to a lot of other states? The reason is Texas has highly favorable debtor laws that give consumers a lot of rights and protections when it comes to past due unsecured accounts like medical bills, credit cards, repossessions, and personal loans.

How State Collection Laws Benefit Texas Debt Settlement

Every state has laws that say if a collections agency is collecting a debt, they are legally obligated to stop contacting a consumer if the consumer sends a Cease and Desist letter and/or a Power of Attorney notifying the collection agency that a third party is responsible for handling all communications with the creditor.
Texas law takes it a step farther and not only limits harassment from collection agencies, but also from the original creditor as well. In most states, when a consumer falls behind on their payments and the debt is still being collected by the original creditor (the bank that originally lent you the money or the hospital that serviced you, for example), then the creditor is reserved the right to call the debtor on a daily basis in order to collect whatever is owed, and although debt settlement companies servicing these clients can very easily reduce the calls (changing of your phone number and address and notifying the creditor that you are seeking third party help, for example), no one can ever make the calls completely stop.

This is not the case however for Texas debt settlement clients. In Texas, the same law that deals with what collections agencies can and cannot do when collecting a debt also pertains to the original creditor. What does this mean in practice? It means that a debt settlement company servicing someone from Texas can easily get the calls to not only reduced, but completely eliminated all together (sometimes within days).

State Homestead and Garnishment Laws and How They Benefit Texas Debt Settlement

For Texas debt settlement clients, their wages and home are completely protected, which gives the creditor even more incentive to settle. Given the fact that creditors already have every incentive to settle even with clients who reside in states with less favorable debtor laws, Texas debt settlement clients are in an even stronger negotiating position with their creditors. What does this actually mean? Typically it means even greater protection in the event of a lawsuit and greater savings than what is typical. Let me explain.

Although the vast majority of cases settle, as anyone who has ever read a debt settlement contract will tell you—it’s impossible for a debt settlement company to guarantee that a client won’t be the target of any legal action by their creditors. After all, creditors are always reserved the right to sue debtors to collect a past due account, regardless of whether the consumer is taking any action to resolve the outstanding debt.

In the event a creditor sues a consumer in court and wins a judgment, they’ll usually go about executing the judgment in one of the following ways:

1) Wage garnishment—contacting your employer and asking that they set aside a percentage of your wages every paycheck until the debt is paid back in full. (It’s illegal for an employer to fire you for this unless more than one creditor is garnishing your wages).

2) Lien on your property—obligates you to pay back the creditor with any proceeds from the sale or refinancing of the property. A creditor prefers to put a lien on your home since it usually increases in value over time, which means the proceeds from your home’s sale will be higher, and thus they’re more likely to actually get paid back.

3) Seizing your bank account—contacting your bank, showing the proof of judgment, and asking to withdraw any monies held in deposit under your name.

Fortunately, Texas laws protect debtors from having their wages garnished (unless you authorized in writing to allow your creditor to garnish your wages) and entitle Texas consumers to 100 percent homestead protection in the event of a lien. (Note: this does not apply to tax liens, alimony, or contractor’s liens.)
One downside, however, is that bank accounts are not exempt under state law. That being said, for most consumers who are drowning in credit card debt, there probably will not be much for the creditor to seize anyway, and if so, it’s unlikely that it will constitute enough to decline a settlement offer. On top of that, bank account information can be difficult for creditors to locate, unlike your home, which is public record.

In sum, these are major advantages for Texas debt settlement clients. Keep in mind that the vast majority of cases are settled successfully regardless of the legal advantages of the consumer. When you consider Texas state laws, debt settlement makes even more sense for the credit card companies, debt collection agencies, and most importantly, for the consumer.

Debt Settlement in Texas and Community Property Laws

If you are married, reside in Texas, and are seeking debt settlement services, you should enroll any and all debts that were accumulated during the marriage by both you and your spouse. Just because the debt is owned by only one partner the other partner is not exempt from having to pay for it as well under Texas law. Creditors know this and may use it to their advantage in the collections process.

Some people like to deal with their credit card debt all by themselves. However, some people do use credit card debt settlement agency. There can be various reasons for going for a credit card debt settlement agency. Some people use a credit card debt settlement agency because they are not comfortable in dealing with credit card debt settlement by themselves. Some go for a credit card debt settlement agency because they don’t have the time to do the research and evaluate options for credit card debt settlement. Others just want professional advice and hence they contact credit card debt settlement agency.

Whatever be the reason for employing a credit card debt settlement agency, a good credit card debt settlement agency would surely be of help. However, it’s important that you select a good credit card debt settlement agency. Do not fall for ads of credit card debt settlement agencies that promise to wipe off your debt overnight. No credit card debt settlement agency or anyone else can do that. You should select a credit card debt settlement agency which has verifiable credentials or a credit card debt settlement agency that you know has a good reputation.

If some friend has been through this process previously, they might be able to recommend a credit card debt settlement agency to you. Sometimes you will find ads that promise impossible things and ask you to call a telephone number that’s a premium line. So beware, or else you might end up paying heavy phone bills that would just add to your debt. Some credit card debt settlement agencies might be having a very low fee but no reputation.

These are again the credit card debt settlement agencies that you should avoid. However, once you find a reputable credit card debt settlement agency, do not try to hide debt related information from them, no matter how bad your debt it. That is another reason for looking for a reputable credit card debt settlement agency. If the credit card debt settlement agency is not a reputable one, you would not be able to trust them; and trust is very important here otherwise you will neither be able to tell them the full story and nor follow their advice.

That said, it’s important to note that no credit card debt settlement agency will be able to help you if you are not ready to help yourself. So, follow the advice given by credit card debt settlement agency and practice good spending habits.

Structured Debt Settlement

You may find yourself the recipient of a structured settlement. If this is the case, keep in mind that this financial settlement is different from a typical lump sum payment of many personally injury legal settlements. The structured settlement is paid out over the course of time. Many times, the payout period may extend throughout your personal life with payments taking the form of a lifetime annuity.

This form of settlement has some benefits. The regular payment provided by a structured settlement is somewhat like a paycheck and can provide a regular income for the recipient. This can be helpful in situations where a large payment of cash – many times seen as a windfall could be spent before the recipient of the settlement is able to find employment to provide a regular income.

Because many times a structured settlement has a long payout period – even over the life of the recipient, this can help assure the older person who is receiving the settlement of income through out his or her entire life. This has great benefits when the older person is concerned about their care and financial stability in their later and perhaps declining years.

Structured settlements are helpful in other situations. If the personal settlement involves a severe injury and there are long-term treatment requirements. The structured settlement helps to ensure that future medical costs and family and living expenses will be provided for. These settlements are also used in cases of wrongful death. In this situation, the surviving family can use the structured settlement as a regular income to replace the income of the lost spouse or parent

The structured settlement means that there is an agreement from the defendant to pay a stream of cash to the recipient. Structured settlements are usually administered by third-parties that are experienced in this type of arrangement. Many times the administrator of the settlement will be an insurance company or similar third-party administrator. This allows the recipient of the settlement to be protected from legal complications or financial hardship of the defendant.

Usually the payment schedule of the structured settlement is on a monthly basis. However, as is most cases, this can be an item of negotiation. There are also times when the payment of the structured settlement may include increases in the payment amount or additional payments. This may be done when there are costs that have been identified in advance such as buying high cost items such as vehicles or wheelchairs.

According to recent studies, the average American household has nearly 20 debit and credit cards, with an average of $500 charge on each one; and due to the 2005 Bankruptcy Abuse and Consumer Protection Act it’s making it harder than ever for consumers to have their debts wiped out by the courts. What this means is that more and more consumers are feeling overwhelmed and helpless and are seeking professional assistance to reduce debt and avoid bankruptcy.

Choosing the right debt settlement company for you is an important first step to getting out of debt. Like all industries, the debt settlement industry has fraudulent businesses. While many debt companies may appear to be similar in goals and structure, it is essential to realize that not all are the same and that some are not to fit your needs. There are debt agencies that will charge high fees and promise to lower your debt, without actually producing any results. Learning basic information about a debt company can help you avoid falling victim to a scam. The most import thing is to ask lots of questions.

KEY FACTORS TO DETERMINE IF A DEBT SETTLEMENT COMPANY IS LEGITIMATE:

1. The company should be prepared to meet your needs in an honest and efficient manner.

2. The company should offer free consultation

3. The company should have available a debt counselor or specialist, who is qualified to assess your entire financial situation and recommend the most suitable course of action for your circumstances.

4. The debt counselor or specialist should work with you hand-in-hand in developing a program that will lower your monthly burden to a single, more manageable commitment leaving you debt-free in the shortest time possible.

5. A legitimate company will only charge you according to the original balance, not the balance after all of the fees and charges.

6. Please be very cautious if a company claims that as a part of their services, they guarantee to stop all creditor phone calls or guarantee that your credit will not be altered.

7. The company should demonstrate the required business practices and standards required by TASC. TASC- Trade Association of Settlement Companies. TASC goals are to promote good practice in the debt settlement industry and protect the interests of consumers. TASC encourages debt settlement companies to provide services of the highest standards to ensure the public and the credit industry’s confidence.

8. In order to achieve successful negotiations, the company should have skilled debt negotiators and settlement professionals, who are current with the laws pertaining to debt, credit and collection and represent their debtor client’s best interest during debt negotiations with creditors and collectors.

However, you should shop around to find a debt settlement company that is honest with proven results, and one that is the best fit for you. Make sure that the company offers the services that you need at terms that are acceptable to you.

Credit counseling or debt settlement? While naturally Franklin Debt Relief is inclined to argue on behalf of debt settlement over credit counseling, we also recognize that it’s impossible to declare which program is better because it depends on a number of variables that differ from individual to individual. The purpose of this article is break down which factors you should consider before choosing the appropriate option.

1. What can you afford? Credit counseling programs tend to be a lot more expensive than debt settlement programs. The reason is simple: credit counseling only produces results on the interest rates, whereas debt settlement is able to actually negotiate the amount you owe. Simply put, if you are in a true financial bind, then the clear choice for you should be debt settlement, and on a pure “money saved” basis, debt settlement will almost always be the answer. Although this is undoubtedly an important factor, it is not the only variable to consider before making a decision on which program is best for you.

2. What sort of credit impact can you tolerate? Some credit counselors out there will undoubtedly tout that their program doesn’t affect your credit score negatively. This is a play on words.

Sure, your score won’t drop, but ask any lender what the impact is to your loan application. Let me save you some time—it’s devastating. That being said, debt settlement is no better for your credit, and lenders in general definitely do not like seeing debtors seeking outside help for their financial situation. On the flip side, they definitely do not like seeing the past due marks from enrolling in a settlement program.

So let’s consider this example: Four years ago, John decided to use credit counseling, and Mary decided to follow the debt settlement path. They both have the same income and expenses, and they both apply for a $200,000 mortgage. Who is more likely to get it—John, who is 1 year away from completing his credit counseling program, or Mary, who finished her debt settlement program 1 year and half ago and has since been rebuilding her credit? While this may vary from lender to lender, in general Mary would be considered the better loan applicant. What if John paid a lot per month and they both finished their respective programs in the same amount of time?

By itself, the credit counseling program would be better for your credit, but when you factor in the fact that Mary would probably have more savings to contribute to a down payment, she’d still probably be considered the better loan applicant. Do I think this is fair? Not at all. It’s ridiculous that lenders are so harsh on clients of credit counseling programs. Unfortunately, the system is flawed, but until there are adjustments made to correct it, debt settlement clients will be in a more favorable position to obtain new credit upon completion of their program.

3. Who do you owe? So you can save more money in debt settlement, but not always. If you owe a more aggressive creditor like Citibank, then it’s possible that credit counseling or bankruptcy may be a better option for you. The reason: Citibank not only tends to settle for more on average, but they are also more likely to pursue legal action to collect a debt. Although under most circumstances debt settlement is still successful with these creditors, it is a much riskier undertaking when you’re dealing with Citibank. If you cannot afford credit counseling and your debt is exclusively with Citibank, then unfortunately you’re probably better off filing bankruptcy.

4. What is your personality type? I’ve read just about every article online regarding credit counseling versus debt settlement, and I’m amazed by how most finance authors eliminate the human element from this discussion. The bottom line: debt settlement is not for the faint-hearted. There is no guarantee that everything will work out completely as planned. Some settlements may be higher than estimated. Some settlements may be lower than estimated. You will inevitably get some creditor calls. This is the nature of the program, and you must be willing to accept some level of uncertainty before enrolling.

I organized the following 4 questions in this order on purpose. After all, if you can’t afford credit counseling, then it’s pretty much out of the picture as an option for you anyway. I don’t mean to sound overly cynical, but we live in a material world and issues like having an anxious personality must be sacrificed when you don’t have the money necessary to freely exercise this aspect of your character. On the flip side, if you have 100% Citibank debt, it would be foolish for you to choose debt settlement over credit counseling or bankruptcy just because you fancy yourself a risk-taker.

There are countless other variables that influence whether debt settlement or credit counseling is appropriate for you (i.e. what state you live in, your income source, etc.). Your best bet is to discuss your individual situation with someone knowledgeable in these arenas.

Debt settlement is one of the worst of all nightmares. But consider that successful debt settlement is like getting a new lease of life. Credit card debt and other financial debt settlement is a wonderful stress relieving mechanism. Once you are done with your debt settlement procedure, you are assured of a much better life. All those nagging phone calls and mails will become history and all that surmounting tension in your family and with your spouse would be gone. That’s why debt settlement is so essential.

You can approach debt settlement in two ways. You can either go for debt settlement all by yourself or you can take advice from a credit counseling company or a professional. Any of these debt settlement methods are fine, as long as they work for you and help you get debt-free quickly.

If you go for debt settlement all by yourself, you will need to analyze the various options available to you, such as checking on various balance transfer offers available in the market, checking the short term loan options with the banks, as well as being very familiar with all the financial tools at your disposal. The big problem with this approach though is that you are likely not in the financial industry and may not have a full or complete picture of what financial tools are available to you, what the famifications are of using any particular tools, and if you use one incorrectly, how to recover, since it could put you in an even worse position that you are in now.

However, if you want to take debt settlement advice from a professional, you should be able to trust the advisor fully. So you need to check the credentials of the debt settlement advisor/company. There are many such agencies out there today, especially with the economic conditions in the world today and in the US, and many of those places may not be able to deliver on the huge promises they make. It is up to you to approach them cautiously and make sure they are legitimate to the best of your knowledge. Check the Better Business Bureau database and see if there are any complaints against a company that you may be considering using, since this would be a good indicator of how legitimate they are.

Once you are done with your debt settlement, you should also take measures to avoid falling into that pit again. Hopefully you will have learned many valuable lessons in the process of determining how you got into the spot you are in, and can recognize it if the same things start to happen again.