Settle Your Debts With Ease

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.