Every day we get asked, "What’s the best way to eliminate credit card debt?”

In order to eliminate credit card debt, you have a few options:

• Hit the lottery and pay them off in a lump sum!
• Continue making minimum payments
• Enroll in a Credit Counseling Program or Debt Management program
• Enroll in a Debt Settlement Program
• Bankruptcy

Since winning the lottery is not likely, most people make the minimum payments to their creditors.  Requiring small minimum payments is a trick the credit card industry has been fooling consumers with for a long time.  If you make just the minimum payment on your cards, it could take 10-15 years and end up costing you 3-4 times the original amount you borrowed because of the interest rates and hidden fees.

Debt Management (formerly referred to as Credit Counseling) makes sense if you can afford the required payment of the program.  Legitimate DM programs will arrange repayment plans with each of your creditors that will lower your interest and fees and usually allow you to pay off all of your cards in about 48 months.  If you can afford the payment, this makes sense.

Debt Settlement is for those who cannot do any of the above.  Legitimate Debt Settlement companies will negotiate with your creditors to satisfy the debt for around 50% of the debt.  Your credit report will show this debt as having been charged off, but then it will show that it has been “paid as agree” or “account settled”.

If you cannot qualify for any of these programs, then bankruptcy may be your best or only option.  Be sure to seek the advice of a competent bankruptcy attorney.  It’s not a bad idea to get a couple of opinions when looking into bankruptcy.

Do you need help deciding what is the right option for you? Our Solutions Specialists are ready to review your current financial situation with you and help you decide which option is the right fit for you.  Give us a call or click on the link below for a FREE Debt Elimination Analysis today!

1-877-492-4109

photo by: alancleaver_2000

Sometimes the only way to stop a snowballing problem is to go back to the top of the hill and find out what started it.

If you're up to your eyeballs in credit card debt, take a step back and recount your money missteps. Knowing your weaknesses could help prevent you from falling back into the bad-credit pit and show you a way out.

Bad Habit #1: Misusing balance transfers

Transferring balances on high-interest cards to lower-rate cards can be an effective technique, but it's easy to make it a good idea gone wrong. Transfer a balance onto a card with a low introductory rate and you can potentially save money on interest if you refrain from charging on it and focus on paying off the balance before that introductory rate expires. But most people continue to charge on the new card and wind up with more debt once the teaser rate expires. In fact, new purchases may have an altogether different interest rate. Read the fine print very carefully, and attempt the balance-transfer maneuver only if you can control your spending on the new -- and old -- card. 

Try this: If you can't refrain from charging, balance transfers won't get you out of debt. If you're really in the hole, consider getting a part-time job and dedicating your earnings to your debt load. If that's not possible, go back to your budget and cut back on unnecessary expenses such as restaurant outings and cell phone extras. Put the money you save toward paying off your balances. Pay for any new purchases with cash or a debit card.

Bad Habit #2: Not checking credit reports because you can't change them anyway.

If you have credit cards, pull your credit report at least once a year and check it for errors. Purging your record of inaccuracies can be crucial for getting better interest rates, landing the job you desire and stopping an identity thief from ruining your credit rating. The scores on your credit report also determine how high your interest rates will be on future loans. Dispute anything you think should not be there. The Fair Credit Reporting Act allows for the correction or deletion of inaccurate, outdated or unverifiable information, provided that a reinvestigation into the disputed data sides in your favor.

Try this: You can request one free copy from each of the big three credit reporting bureaus every year. If you do find a mistake, send a correction letter to each of the credit bureaus that show the error. All three allow you to dispute errors online.

Bad Habit #3: Thinking of 'budget' as a dirty word

Everyone can benefit from deciding on certain amounts for spending -- and sticking to the amount. It also makes sense to budget for known future expenses, such as quarterly insurance premiums, college textbooks and rent. Not saving up in advance means you'll have to charge expenses or cut into funds set aside for necessities. 

Try this: To find out what's draining your finances, keep track of where your money goes for a month. Use this free budget spreadsheet to categorize your expenses. This will reveal whether you're spending too much on expenses you could trim, such as restaurant outings and gas. Cut back as necessary without cutting out expenses important to you.

Plan for future costs by figuring out the total amount you'll owe and divide by the number of months you have until that day. If you have money due next month, divide by the number of weeks you have and save that amount every week. 

Bad Habit #4: Using retail store credit cards to make use of discounts

Chances are, that card carries a high interest rate you'll be forced to deal with if you don't pay off your balance each month.

Try this: If you must charge your purchase, use your general-purpose credit card. If you can't pay off the balance, at least you'll pay a lower interest rate. Limit the total number of credit cards you have to just two, if you can: one you can pay off each month and one with a low interest rate for those large purchases you'll pay back over time.

Bad Habit #5: Making the minimum payment only

Paying the minimum is better than paying nothing, but it doesn't do much to pay off most balances and forces you to keep paying interest. By paying interest on interest, you lose any savings you may have recieved from buying something on sale.

Try this: If you can afford to pay more or in full, go ahead and pay as much of the balance as you can. You never know when you're going to have a tough month. Pay in full every month and you can avoid interest charges altogether.

Or, if paying more than the minimum proves difficult, consider enrolling in a Debt Consolidation Program.  These programs can lower your minimum payments, reduce your interest and put you on a level payment plan that will have you debt free in 3-5 years or less! 

 

Every day we get asked the same questions over and over again. Here are the answers to some of the questions we get asked most often. 

 

 

What is debt settlement?

Debt settlement (also called debt negotiation) is a process of negotiating with your creditors to pay off your credit cards and other unsecured debt (student loans, auto loans, and home mortgages are secured debts, and don’t qualify) for an amount less than you currently owe, often at a 40-60% savings.

Does debt settlement really work?

Yes it does. Debt settlement works best for people who cannot pay their bills, are behind in their payments, or are considering bankruptcy. It is not designed for consumers who have small amounts of debt or who can still make their payments. It is a more aggressive approach to getting out of debt, and is not right for everyone. But debt settlement is a proven method, that will eliminate your debt quickly and save you money.

How is it different from debt consolidation or credit counseling?

Debt consolidation or credit counseling is a more traditional debt reduction option, which lowers your interest rates, monthly payments, and fees, but does not directly reduce the amount you owe. However, debt consolidation can help you get out of debt faster by lowering your interest rates and helping you pay more each month towards the amount you owe, and pay less in interest.

Will debt settlement ruin my credit score?

A credit report lists your payment history and amount of debt, so debt settlement can lower your credit score. However, many people don’t realize that having a lot of debt also lowers your credit score. And with very high debt, many lenders won’t lend you money (which is one reason to have good credit in the first place) and you may not be able to afford to borrow more money (another reason to have good credit) anyway. So, when considering debt settlement, make sure to compare the benefits (getting out of debt faster & saving lots of money) against the against the drawbacks (lowering your credit score). Getting completely out of debt and getting your life back to normal is probably well worth it.

Can my credit be repaired after I am done with debt settlement?

Yes it can. Once you have elimiated your debt, your account balances will be at zero.  From there you can re-build your credit score by using credit and debt wisely from that point forward.  You also have the right to request than any information be removed from your credit report. All information must be verified correctly, or the credit bureaus must remove it from your credit report. By taking the time to make these requests to the credit bureaus, you should be able to get a few items removed and therefore increase your credit score fast. 

How do I know if a debt settlement company is legitimate and I won't get ripped off?

As with hiring any professional to do work with you, do your homework: ask lots of questions, make sure you feel knowledgeable and comfortable with the process, read the fine print, and check with the Better Business Bureau. Learn more about choosing an honest and reliable debt settlement company before you get started.

If you have more questions, please visit our FAQ page or give us a call 

1-877-492-4109

 

My spouse died.  Am I responsible for paying off the debt?

Credit card companies and debt collectors are not very sympathetic about your loss and will try to collect on an outstanding debt even if you are not legally obligated to pay!

It is important to understand what your financial obligations are beforehand so that you know what you could encounter should your spouse pass away.  It may be a good idea to contact an attorney that can advise you on the legal details concerning your particular circumstances.

4 VERY IMPORTANT QUESTIONS TO ANSWER:

1.  DO YOU LIVE IN A COMMUNITY PROPERTY STATE?

If you live in one of the following states, your property, assets and yes, debts are considered jointly owned:

• Arizona
• California
• Idaho
• Louisiana
• Nevada
• New Mexico
• Texas
• Washington
• Wisconsin

If your spouse had opened an unsecured credit card, store card or personal loan and you live in one of these community property states, you will be responsible for the debt.

HOWEVER...

In most cases, losing a spouse may mean loss of income and or retirement benefits and you may really be strapped financially.

You should be able to negotiate a reduced balance settlement of that account.

If you need help, please let us know as we have been helping people settle debts for many years!

2.  WHERE YOU A CO-SIGNER ON THE ACCOUNT?

If you were, you are responsible for the debt. However, you should be able to get the creditor to reduce the balance!

What if you are not sure if you were a co-signer? 

• Write a letter to the creditor briefly explaining that your spouse has died and that you do not feel you are responsible for the debt (unless you live in a community property state).

• Request proof, ie. a copy of the original application.

• If they cannot produce it, you are not responsible.

3.  WHERE YOU AN "AUTHORIZED USER ON THE ACCOUNT?

An authorized user is any person who has permission to use a credit card account, but is not responsible for paying the bill.

In that way, it differs from joint credit, in which both parties are obliged to pay. In some cases, the user will receive a credit card in his or her name, even though it is linked to someone else's account.

4.  DID YOUR SPOUSE HAVE ASSETS THAT MAY BE SUJBECT TO PROBATE?

The term "probate" refers to the legal process to determine if a will was valid.

If your spouse had a will, depending on the state's laws where you reside, there may be "probate" process before assets are distributed according to the will. In many cases, there is no probate process.

For example:

If you have a joint checking or savings account and your spouse dies, then now you are the sole owner or account holder.  It is a good idea to let the bank know.

If your spouse had a life insurance policy and you were the sole beneficiary, the funds are sent to you without going through the probate process.

The reason is that a life insurance policy is a contract and unless it was part of a special estate-planning situation, acts independently.

And by the way, the proceeds of the life insurance policy are TAX-FREE!

If your spouse dies and there is outstanding credit card or other debt, you may want to consult with an attorney or with a qualified Debt Management Company.

Don't let creditors intimidate you!  Know your rights!

If you need help, give us a call!

1-877-492-4109

 

Looking for a reputable Debt Settlement Company?

Here are 5 Characteristics you need to look for:

 

 

 

1)  HOW LONG HAVE THEY BEEN IN BUSINESS?

Years ago, there was a lot of so-called Debt Settlement Companies that started.  They offered big promises, but delivered poor results.

Most of them were nothing more than "get-rich-quick" or "fly-by-night" outfits that took advantage of many people.  The Attorneys General's office of most states were flooded with complaints and took action, levying severe fines against many causing them to shut down.

If you find a company that hasn't been around for more than 5 years...you should keep looking!

2)  WHAT KIND OF TRACK RECORD DO THEY HAVE WITH THE ATTORNEY GENERAL OF YOUR STATE?

This is easy to find out, just goggle your state's attorney general or the consumer protection division of your state.

You will be able to find a list of registered Debt Settlement Companies for states that require registration, and you will find complaints and or fines that have been levied against fraudulent companies.

3)  WHAT KIND OF BETTER BUSINESS BUREAU GRADE DO THEY HAVE?

About a year ago, the Better Business Bureau (BBB) lowered all Debt Settlement or Debt Management Companies rating due to all of the fraud and legal action that had been taken by the states and federal government.

You may not know this, but the BBB is an independent business entity and NOT associated with he government or credit bureaus in any way.

Some Debt Settlement Companies are "accredited" and other opt not to seek the BBB's accreditation.  Accreditation means the Debt Settlement Company has paid a large fee (and continuing annual fees) to have this "tag".

The real test of a companies rating is the complaints and resolution of those complaints that the BBB records.

Be aware of companies with too many complaints...something is wrong!

To see our BBB rating and report, CLICK HERE.

4)  WHEN YOU CONTACT THE COMPANY, DO THEY TRY TO "SIGN YOU UP" ON THE FIRST CALL?

There's nothing wrong with a company trying to make money helping people solve their debt problems, but BE AWARE of a company or representative who is too agressive!

In order to do a professional, thorough job, they need to take the time and have the patience to find out all about you and your paticular circumstances.

A professional, reputable debt settlement company wants to explore several options, such as:

• Debt Management (formerly called Credit Counseling)
• Debt Consolidation through a personal or equity loan
• Debt Settlement
• And yes, possibly Bankruptcy

A few outstanding companies offer more programs or services than just Debt Settlement or Debt Management.

You might think twice if a company who only offers Debt Settlement speaks negative about Debt Management Programs and vice-versa!

5)  HOW PERSONABLE OR PLEASANT IS THE REPRESENTAVIE?

If you get a bad feeling about the rep, KEEP LOOKING!

Professionally trained and experienced Debt Settlement Representatives are PATIENT AND ASK A LOT OF GOOD QUESTIONS.

The company does not have to be local to be one of the best, but on the other hand, if you feel they have out-sourced their services to an overseas company, I'd be a skeptical.

If you call back, will you be speaking with the same rep?

Bottom line...you need to have a good feeling about the rep and company or keep looking!

If you would like more information and a FREE annalysis of your debt, Give Us A CAll --->>> 1-877-492-4109

Or Click on the link below

What legal options can a debt collector exercise in trying to collect an outstanding debt?

When you do not keep up with the minimum monthly payments due on your credit cards or other unsecured debts, the original creditor may decide to charge the delinquent account off.

It may be transferred to one of hundreds of collection agencies or to a law firm that only specializes in collection of debt.

The goal of a settlement program is to negotiate settlements on outstanding debt far below the current balance.  This may be anywhere from 35% to 80%, depending on the debt and many other factors.

The first option a debt collector has is to try to get you to pay as much money as possible.  They use many illegal methods that violate the Fair Debt Collection Practices Act (FDCPA) such as:

• Frequent and harassing phone calls
• Calling at your place of employment
• Mailing threatening letters
• Making threats of lawsuits or other legal action
• Lying by saying that they never work with 3^rd Party Debt Settlement Companies like DRNW, Inc.

We know how annoying these calls can be and have FREE INSTRUCTIONS HOW TO STOP THE CALLS.

The second option a creditor may exercise is to file a claim. 

If a reasonable settlement cannot be reached, the creditor or collector may decide to retain a law firm that specializes in debt collection to file a claim.

This is processed with your local county court (usually small-claims court) and you would receive or be served a summons.  This is a legal document stating that a claim has been filed against you for the debt you owe.

It will state that you have 20 or 30 days to “answer” the claim.  An “answer” is you responding to the claim saying that you do not owe the debt and stating the reason why.

But since 99.9% people who do receive the summons do, in fact owe the money, there is no reason to spend the court fee to file your “answer”.

It is very important that you do not ignore the summons!

If you have received a summons and would like personal, professional help in dealing with it, please let us know!

In most cases, we will work out an agreement in lieu of them going forward with the claim and that will be the end of that.

If a reasonable settlement or agreement cannot be arranged, then the creditor (plaintiff) will be awarded a judgment by default.  You do not have to go to court or hire an attorney (unless you decide to dispute the validity of the claim) and they will win the judgment by default.

Once the default judgment has been awarded, not the creditor has a couple of more options:

If you have a job and are paid normal, W-2 income, they may decide to apply for a writ of garnishment in order to have your employer pay a percentage of your paycheck to the creditor until the debt is repaid.

Each state has a little different law, but in most state, that would be 25% of your net, after-tax income.  There are also different exemptions that may or may not apply.

If you are self employed it is very difficult for a creditor to get a wage garnishment.

If you are retired, they cannot touch your retirement income (more later).

To prevent the creditor from exercising their legal option ONLY AFTER THE JUDGMENT HAS BEEN AWARDED,  you can negotiate an agreement whereby you agree to repay the debt (sometimes at a reduce balance) over time with a payment from your reserve account.

We have many years of experience in helping clients and would be glad to help you also. 

Click here for a FREE EVALUATION.

THE IMPORTANT THING FOR YOU TO REMEMBER IS…

A debt collector cannot just decide to garnish you wages without going through the entire legal process and this usually takes several months, giving us enough time to negotiate a settlement or other agreement.

In rare cased, ONLY AFTER THE JUDGMENT HAS BEEN AWARDED, a creditor may apply for a writ or levy to your bank account.

In short, if you are Retired or Disabled, the creditor (again, only after awarded a judgment) CANNOT TOUCH YOUR BANK ACCOUNT!

But, you cannot CO-MINGLE funds in your checking or savings account.

If you work a few hours here or there, win some money at the casino or receive a gift, DO NOT DEPOSIT INTO YOUR BANK ACCOUNT WITH YOUR OTHER RETIREMEN FUNDS!!!!!

Click a link to a great blog of ours about EXEMPT INCOME.

Debt Relief NW, Inc. is not a law firm and does not give legal advice. 

Losing your job can feel like your whole world is falling apart.  A job can be so much more than just a J-O-B, it can define you as a person.  When it is pulled out from underneath you with no warning, then your mind set can really be affected. Depression can rear its ugly head during times of high stress and pressure when your personal finances are falling apart.

If you are the main bread winner and you have the responsibility to support your family, loosing a job can soon turn to depression out of feelings of despair and disappointment. Credit card debt, mortgages, and personal loans are all commitments that need to be paid.  What happens when you simply don’t have the cash flow?  

Keeping a positive mindset is paramount in times of unemployment.  You need to look at this as a temporary situation and your new job is to look for a new one.  Don’t sit on the couch and dwell on the situation, this doesn’t help anyone.  If you just lost your job, and you worked 40 hours per week, then you need to be actively looking for your new opportunity with this time. This is not an opportunity to catch up on reading or cleaning.  If you have a family to support or bills that need to be paid, then you must do all you can to get back into work asap!

Ensure your resume is up to date

Rewrite your resume and cover letter and make sure that it contains all your current achievements.

Ensure you have an interview outfit which is clean, ironed and ready to wear.  Be ready for an interview at short notice.

Have printed copies of your resume and cover letter with you at all times.  Carry a resume folder in your car and bag so that you can drop it off as you find opportune places.

Keeping positive in times of stress and little income

Dealing with debt and stress is not fun for anyone.  However, money does not make you the person you are, so don’t let it define you.  We all need money to pay bills but don’t focus on the lack. Keep your mind on taking action and applying for jobs.

Be Proactive in looking for new work

Get creative when looking for a new job.  Look online and in local newspapers for companies that you would want to work with and make contact with them about future work.  Temporary or part time jobs can help you get a foot in the door.  Be open to the possibilities of accepting jobs that are outside of your normal industry.  You can look for more permanent work in your chosen field  while you are working in a less familiar area.  By keeping employment gaps on your resume to a minimum,  you demonstrate your tenacity and work ethic.  By accepting a position that is less than ideal, you may be setting-up your next, better job offer.  Remember that employers prefer to hire someone already employed.

Dealing with debt

When the debt collectors are calling you for money,  and you have little, stress levels can skyrocket.  Do not put your head in the sand and ignore this situation.  Either answer the phone and discuss your situation with them, or look into your debt relief options.  Your debt will not go away on its own.  You have options to explore including credit counseling, and bankruptcy as a last resort.

Times of change always present opportunities that may have not have been available before.  Be proactive, positive, and keep the lines of communication open. You will get back to work.  You will get debt under control.  You will regain your life again.

So you’re ready to get out of debt once and for all.  The question is, how do you do it and what options do you have.  I’m going to share the options available to you as well as the pros and cons of each. 

Debt Consolidation

Whe you enroll in a Debt Consolidation Program, you are hiring someone to help you get out of debt and coach you back to financial health.  They will work with you on a one on one basis and help you establish a budget and a plan to get out of debt.

PROS:

• Lower interest rates on your credit cards. 
• One REDUCED monthly payment
• Stop harrassing creditor phone calls
• Eliminate your debt in just 3-5 years!

CONS:

• Pay back the full amount owed
• No room for error - If you are late or miss a payment, the creditors will remove you from the program
• Accounts will be closed by the creditor

Debt Settlement

When you enroll in a Debt Settlement program, you are hiring a team of Debt Negotiaion Specialist to work with your creditors and settle your debt for less than what you owe.  Debt Settlement is an excellent option for someone who has fallen behind on their monthly payments an is trying to avoid bankruptcy.  You can include unsecured debt such as Credit Cards, accounts in Collections, Repos, and Medical Bills in a Debt Settlement Program.

PROS:

• You will eliminate your debt for much less than what you owe
• You only have to make one small monthly payment
• It will improve your credit over time much faster than going through bankruptcy

CONS:

• May hurt your credit score
• Creditors may continue to call you
• Debt Settlement cannot help with secured debt such as a home or car loan

Bankruptcy

Bankruptcy is the process of declaring yourself unable to pay off your debts.  This does not mean it will get rid of all of your debt but most of it.  The typical bankruptcy for consumers is Chapter 13.  This is where lawyers will negotiate with your creditors and collection agencies to pay back less than what are owed.

PROS:

• You pay less than what you owe.  The typical amount you will pay back on any certain debt will be anywhere from 30 to 80 cents on the dollar.
• They work a payment plan out for you.  This will allow you to creditors back over period of time.

CONS:

• Hurts your credit for the next 7 years from the point of discharge.  You will not be able to get a loan of any kind.
• Costly.  Bankruptcy can cost a lot of money.  If you’re already in a lot of debt it may be tough for you to come up with the money to even go through this process.
• Bankruptcy is also very time consuming.  Don’t expect the process to go very fast.  In most cases it will take several years to pay back all of your debts.

Would you like to learn more about what option is right for you?  Our Solutions Specialist can work with you to determine which option best fits your financial situation. 

For a FREE no obligation consultation,

give us a call TODAY!

1-877-492-4109

photo by: Helga Weber

Money is one of the topics couples fight about most often. Debt brought into marriage is an especially troublesome part of many couples’ money problems. Research shows that debt brought into marriage is the number one problem for newlyweds. Unfortunately, debt never rests, sleeps, or goes on vacation and as long as you have debt you will be in financial bondage.

Before you say, "I do," you should get to know each other's financial health.

10 questions to ask your fiancee that can help make your future life together a successful one:

1. How many credit cards do you have?
2. What are your balances and interest rates on those cards?
3. Do you pay your bills ahead of time, on the due date or late?
4. Are there dings on your credit history that might affect our ability to reach our financial goals?
5. What is your credit score?
6. Can I see your credit report?
7. What are our financial goals (salary and saving expectations, retirement plans, future education, etc.)
8. Do you have any assets (real estate, investments, retirement funds, savings accounts)?
9. Do you want children? If so, what are your (our) financial plans for supporting them?
10. Do you owe any debt from a previous marriage? Are there any financial obligations that still need to be fulfilled to your ex-spouse?

There are no correct answers to any of those questions. However, if your spouse doesn't want to chat with you about finances, consider this a BIG red flag.

If you learn that there is a large amount of credit card debt, extremely high interest rates on those cards or too many credit cards, then the time to take action is BEFORE you say "I Do". you should consult with a Debt Solutions Specialist to discuss your options such as Debt Consolidation or Debt Settlement.

If you or your fiancee would like to learn more about how to get out of debt before your big day, click the linke below for your FREE DEBT ANALYSIS or simply give us a call. 

1-877-492-4109