A recent article in our Portland, OR newspaper, The Oregonian, stated that one in every three people in America are facing debt collection.  If you are one of the 33%, what are your options?

Sadly, when faced with the annoying and often harassing tactics used by many debt collectors, people are often given only one choice...debt settlement.

But, after over 11 years helping people deal with having too much debt, I want you to know that although debt settlement is often a very viable choice, and often the only choice to prevent bankruptcy, it is not the only choice. In other words, ONE SIZE DOES NOT FIT ALL!

Unfortunately, many debt settlement companies ONLY offer and therefor ONLY recommend debt settlement as the solution to dealing with a severe debt load.

Let's briefly look at the various options:

There are so many different possible scenarios or various financial circumstances that people are facing that a quality, experienced company that assists people with debt will do a thorough analysis to determine the proper program.  It is much like a doctor who should do a thorough exam before prescribing a drug or procedure!

The first step is to determine what kind of "DEBT" you are dealing with.

For example, SECURED DEBT, such as a mortgage, auto loan, or any other loan that is secured by property (usually the property itself), must be dealt with differently than UNSECURED DEBT.

Some of the more common forms of UNSECURED DEBTS are:

• Credit Cards
• Store credit cards
• Personal or Signature bank loan
• Medical bills
• Private (not Federal) Student Loan
• On Line shopping sites such as QVC, EBay, and others that offer credit

Once we have identified what type of debts you are facing (and there are usually a combination), then we need to determine where you are FINANCIALLY.  In other words, after you pay all of your basic bills to live...mortgage or rent (all secured debts), as well as... food, utilities, gas, medicine, insurance, etc., is there any money at the end of the month to pay towards those debts?

The easiest way to determine where you stand is to complete a simple, Household Budget Worksheet.  

Once you've detemined where you stand, then we can look at the various options.

A DEBT MANAGEMENT PROGRAM (often referred to as Credit Counseling), has been used by people with debt problems for years.

This program is designed for someone who is currently making all of the minimum payments required on their unsecured debts, but because of the HIGH INTEREST RATES (APR) and ANNUAL FEES and OTHER FEES (late fees, over-the-limit fees, etc.), realize that they are not making any progress to actually paying off these debts.

For example...

Did you realize that if you have a credit card with a balance of say, $5,000 and an annual percentage rate (APR) of 19%, it may take you 15-20 years or more to pay the card off by making the monthly minimum monthly payment required.

For more information:  DEBT CONTROL: 4 PROGRAMS THAT WORK!

If you are barely making all necessary payments (secured) as well as your monthly minimum payments, but there is nothing left over, then a Debt Management Program may be best for you.

But, if you actually have (or can make some living adjustments to find) and extra $100-$200 per month to put towards your debts, then you should consider:

A DEBT ACCELERATOR PROGRAM

Originally called by various names such as a "Snowball Plan" or a "Roll Up Plan", in a DEBT ACCELERATOR PROGRAM, you are going to pay off your debt in an average of 4-5 years without enrolling in a Debt Management Program (which may or may not harm your credit score).

Basically, in a Debt Accelerator Program, you will be making the normal minimum payments each month as before, but you are going to increase one of your debts by say $150/month.

There are several theories about whether you should accelerate the highest balance or interest rate first, but I don't want to get into that here.

I recommend that you start with the lowest balance first, make the minimum due plus the additional $150, and pay that one off quickly...you'll be amazed!

And, not only amazed, but excited to go to the next debt!

Now, you take the former minimum payment (say it was $50) and after adding the $150, were making $200 per month instead of just the $50 and you add that $200 to the next card or debt's minimum due.  Let's say the next one is $75.

Now you are making a total of $275 towards the next card ($50 + $150 + $75 = $275).

Get the idea?  Soon, you keep "Accelerating" each debt and you will be DEBT FREE in a much shorter time and save thousand of dollars in interest and fees!

SOUND GOOD, BUT...

What if not only do you not have any extra money to put toward a Debt Accelerator Program, you can't even make the minimum monthly payments your unsecured debt require now?

THIS IS WHERE A DEBT SETTLEMENT PROGRAM MAY COME TO YOUR RESCUE!

Rather than opt for bankruptcy, millions of people have used a Debt Settlement Program to pay off all of their unsecured debts and avoid bankruptcy.

Debt Settlement is a program designed for those who are really in trouble, fincially.  Usually, most or all of their debt have gone to debt collectors who are are calling severaly times a day and sending threatening letters!

You will be making a monthly contribution to a bank insured (FDIC) account to hold those funds until there is a reasonable amount built up to make a SETTLEMENT OFFER.

Again, depending on several factors, most settlement offers are going to be around 50% of the balance.  Some are for more, other less.

People often ask if a Debt Settlement Program hurts their credit score.  But, they are not thinking the process through.  If you're accounts have gone to debt collectors or judgments, your credit score has all ready suffered!

Once you get all of your debts settled...ie., you have $0 balances, your credit scores will improve!

OK, but what if you can't even afford to make a contribution to a Debt Settlement Program?

Then, it is time for you to seek BANKRUPTCY PROTECTION from your creditors!

Again, unfortunately, their are many Debt Settlement Companies that only offer one solution to everyone's debt problem.  But, as you can see, ONE SIZE DOES NOT FIT ALL, when it comes to dealing with debt.

Seek the counsel and advice of a qualified Bankruptcy Attorney.  You should be able to have a FREE Consultation and hear about your options.  In fact, good bankruptcy attorneys will work with you as far as their fees go. If not, seek out another bankruptcy attorney!

I hope I have made my point that when it comes to DEBT SETTLEMENT, one size does not fit all!

Photo by: DRNW

Debt...although a necessary evil in today's economy, it can be devastating.  Here are 4 Debt Control programs that may work for you!

Are you having a hard time with any of these?

• Credit Cards
• Medical bills
• Utility Bills
• Personal Bank Loans
• Auto Loans
• repossession Deficiencies
• Judgments

If you do (and millions of people are just like you), you should consider one (or more) of these programs:

DEBT ACCELERATOR PROGRAM

There are all kinds of estimates or studies that have been done to try and calculate how many people are carrying debt loads that are becoming difficult to handle.

The average US household credit card debt is estimated to by around $15,000.  Now, some families are carrying very large amounts of debt and some have less, but the point is... we (most people) are carrying far too much debt. 

I  believe it was Dave Ramsey who either first developed or made popular the idea of the Debt Snowball Plan.  Sure, there are some critics of this type of plan, but usually those critics have not been dealing with people (and especially people's emotions) for very long.  While I don't agree with everything he promotes, the fact that he is helping people get control of their debt is admirable, and I applaude his teachings.

Basically, in a DEBT ACCELERATOR PROGRAM (my term for a Roll-Up or Snowball Plan) you are going to be paying a little more that the total required minimum payments of all of your accounts. Don't think you can find a "little more" money each month?

• How about making a few changes in your lifestyle?  For example:
• Daily StarBucks coffee = $5.00 x 30 days/month = $150 per month
• Fast food lunch at say $6 bucks x 30 days/month = $180 per month
• Health club membership you never (or rarely) use = $25/month

Get the idea??? If you are serious about finding some extra money to pay off your debt in a shorter period of time, you can do it!  OK, I'll get down from my "soap-box"! 

Let's say you have a total monthly minimum required payment of $500.  Although you have been paying consistently for several years, the balances are barely going down!

Of course, you know (or should know) why.  The credit card industry has tricked the average consumer into thinking that they are "repaying" their debt by making the minimum required payment each mont.  But, if you will take a close look at your next credit card statement, you're going to be shocked (outraged is better) to learn that your balance was hardly reduced at all.  Here's why:

Hypothetical Credit Card:

• Balance                                    $7,000
• APR                                             19%
• Minimum Payment is 2.25% of balance

$7,000 x 2.5% = $175

19% / 12 (months in a year) = 1.583% interest on $7,000 = $110.81 (THAT'S RIGHT...DO THE MATH)

So, when you send in your "minimum payment" of $175, here's what next month's statement will look like:

Previous Balance                      $7,000.00

Interest charge                         $  110.81

Payment received                    -$   175.00

New Balance                            $6,935.81

YOU GOT IT!  You sent $175 and your balance was only reduced by $ 64.81!!!

No wonder it takes peope 10, 15 or more years to pay off the average credit card (especially if you continue to only make the "minimum payment required"!

But, by making a few changes in your spending habits, you find an extra $100 per month.  By adding an additional $100 per month to the $175 (and not reducing the $175 as you balance goes down), you can pay off that credit card in just 33 months, saving you thousands in interest!

Now that you have that one paid off, YOU DON'T LOWER THE TOTAL MONTHLY PAYMENT, you just reallocate or add it to the next credit card, and so forth, and so forth until all of your credit cards are paid off!  DOESN'T THAT SOUND GREAT!

But, what if you not only can't afford the total minimum payments, you don't have any extra funds for a Debt Accelerator Program?

Then, a DEBT SETTLEMENT PROGRAM may be the answer!

So many people have run into some very difficult times, financially.  This may due to:

• Loss of employment
• Too little fixed income after retirement
• Death of a spouse or partner
• Disability
• Divorce
• And many other "financial challenges" that you may be facing

Does that mean that you can never recover or be DEBT FREE once again?

No, in fact, debt collectors are usually more than willing to SETTLE a debt for less than the total balance, depending on your particular circumstances.

When you fall behind on your payments to your creditors, as you know, the calls start becoming more frequent and frustrating! 

Did you know that once your account has been transferred to a debt collector, you can legally make them stop calling?

After you account is with a debt collector (may be a "debt purchaser"), you will need to make a SETTLEMENT OFFER of much less than the total balance.  Now, here's where it get's tricky.

A professional debt collector usually receives a bonus or commission depending on how much they can get you to pay.  In some cases, they start out very firm and tell you that they cannot offer a discount at all (not true).  Sometimes, they are willing to offer 70% or so, and you may have received a letter with the offer.

My experience with dealing with debt collectors over the last 12 years is that they are all working on different "numbers" (for lack of a better word), meaning that they have certain goals their bosses give them and they may or may not be able to go as low as you want.

If you get an offer that works for you, MAKE SURE YOU GET IT SENT TO YOU IN WRITING! I don't know how many times we get a client who made a "settlement agreement" over the phone, made all the payments as agreed, but found out that the debt collector denied ever making the agreement and demanded the remainder of the full amount!

For more information about "how" and "if" Debt Settlement really works, CLICK HERE.

FEDERAL STUDENT LOAN FORGIVENESS PROGRAMS

If you are like thousands upon thousands of current, former or parents of students with too much Federal Student Loans to repay, we have SOME GOOD NEWS!

Again, as with any "government" program, depending on your particular circumstances, you may qualify for one of these new programs. Basically, if you income falls within certain parameters, you may be able to have anywhere from NO PAYMENTS to maybe only a $100 or so.  Make these payments for 20 years, and the remainder of the balance will be forgiven! 

And, if you are in or go into some sort of "public service" career, you may only need to pay the reduced payments for 10 years!

Trying to determine not only IF YOU QUALIFY, but HOW MUCH YOUR PAYMENT WOULD BE, is not very easy (remember....government...). Let us help:

877-492-4109

Notice I said "bankruptcy protection", as in PROTECTION FROM YOUR CREDITORS!

If you ignore the collection letters and calls and are not able to work out a repayment plan or settlement, the creditor or debt collector may decide to FILE A COMPLAINT and then you would receive a SUMMONS.

If you ignore the summons (as so many people do), then the creditor (or PLAINTIFF), will most likely be awarded a DEFAULT JUDGMENT.

Now the credior has the legal right to apply for a WRIT OF GARNISHMENT, not only for your INCOME, but possibly your BANK ACCOUNT(S).

You should seek the cousel of a BANKRUPTCY ATTORNEY right away.

So, there are 4 Programs to control you debt:

• Debt Accelerator Program
• Debt Settlement Program
• Federal Studen Loan Forgiveness Programs
• Bankruptcy

You don't have to live in fear or frustration. Get some help today!

Photo credit:

Jason Rogers

Dealing with debt collectors is not easy, but it can be done.  Here are a few tips on how to deal with debt collectors.

If you find yourself unable to pay your bills, about to lose your home, or in a financial hole so deep that you can't climb out of, then it is time to look into filing for bankruptcy protection.

This is the final blog about DEALING WITH DEBT.  There are basically 3 ways to deal with debt:

• Debt Management
• Debt Settlement
• Bankruptcy

In a bankruptcy, you will eliminate most of your debt or you will be able to schedule a repayment plan that will fit your budget, given your dire financial circumstances.

But, bankruptcy comes at a cost of your credit score and possibly some of your assets.

Yes, after you complete your bankruptcy, you can still get credit, but usually the interest rates are higher and the credit limits are lower.

This is why it is so important to gather as much information you can from an experienced bankruptcy attorney.  The initial bankruptcy consultation should be free and most bankruptcy attorneys will work with you as to payment of their services and fees.

Individuals filing personal bankruptcy will generally be able to file a CHAPTER 7 or a CHAPTER 13 bankruptcy.

Under normal circumstances, a Chapter 7 bankruptcy will take about 90 to 180 days to complete.  A Chapter 13 bankruptcy will take about 3 - 5 years, depending on several factors.

Good news!!!!  Once your bankruptcy attorney starts the process, the debt collection calls will stop.  If you are not sure if bankruptcy is the best choice for you and would like to put a stop to the debt collection calls, click below:

Individuals or couples with few assets and are looking for a FRESH START, tend to file a Chapter 7 bankruptcy. This type of bankruptcy is basically a liquidation bankruptcy in which a debtor trades all of their non-exempt assets as payment for all of their dischargerable debt.  Many, if not all, personal possessions are protected by exemptions and most consumer debt, such as:

• Credit Cards
• Store Cards
• Personal Loans

Individuals or couples looking to catch up on mortgage payments, get rid of 2^nd mortgages, or who are ineligible for Chapter 7 bankruptcy, can file a Chapter 13 bankruptcy.  A chapter 13 bankruptcy involves making a deal with the court to pay a certain amount of your income to the court each month in return for getting rid of all of your dischargerable debt. 

People will choose a Chapter 13 Bankruptcy because there are certain types of debt that only go away in a chapter 13 bankruptcy and, there are certain advantages that can only be had in a chapter 13 bankruptcy.  This type of bankruptcy can be used to catch up on mortgage or child support payments.  However, there is a danger of not completing your plan and thus not getting a discharge.

Filing bankruptcy does not mean that you will lose your home or your car. 

In fact, in some situations, filing bankruptcy will even allow you to keep a car or home that you were about to lose.  This is because bankruptcy allows you to protect some or all of your assets with exemptions.  These are set amounts of personal property that you can protect during a bankruptcy.  Retirement accounts are generally protected as are certain support payments that you may be receiving.

Filing for bankruptcy does not mean that everyone you know will find out!

Only the necessary parties are inform of your bankruptcy filing.  Individuals who receive notice of your bankruptcy filing are creditors, co-debtors, and co-owners of shared assets. 

A bankruptcy will stay on your credit report up to 8 years, but it will have less effect with each passing year.  Filing bankruptcy may hurt your credit score in the short-term, but it allows you the chance to start rebuilding it right away.

Still not sure how to deal with your debt?  Get answers by clicking below:

Blog article written by: Noah Bishop of BishopBankrutpcyLaw.com

Photo by: www.stockmonkeys.com

If you cannot qualify for a Debt Management Program, then you should consider a Debt Settlement Program.

In my last blog, "Dealing With Debt, Part 1, Debt Management", I explained about how the traditional Credit Counseling Program or what we refer to today as a Debt Management Program works.

As with about anything in life, there are pros and cons with any program, so you want to make sure that if you are looking for answers concerning what is the best way to deal with debt, you look at all of your options before making a decision!

When dealing with too much unsecured debt, you really only have a few options:

• A Debt Management Program
• A Debt Roll Up or Snowball Program
• A Debt Settlement Program
• Bankruptcy

What is a Debt Settlement Program?

When you accumulated too much debt unsecured debt and cannot keep up with the minimum payments due or cannot qualify for a Debt Management Program, then a Debt Settlement Progam may be your best option.

Most people who chose a Debt Settlement Program have had some, if not all of their accounts become very delinquent.  Once you miss 3 or 4 monthly payments, these accounts most likely will be charged off by the original creditor and placed with a collection agency.

Sometimes, the collection agency is actually an attorney or Law Office that only deals with debt collections. 

As you may know by now, once you miss a payment or two, the letters and calls start coming more frequently!  In fact, most consumers are taken advantage of by debt collectors because they do not know their rights.

Under the Fair Debt Collection Practices Act, debt collectors are forbidden to:

• Call you too many times in a day
• Say things that are vulgar or might indicate they could take your belongings
• Make statements or suggestions that you are going to be sued, if, in fact, they do not file a claim and start the legal process.
• Call you at your place of employment.
• Any many other acts that you need to know.

You can find some very helpful information called:

Fair Debt Collection Practice Act – Guide for Consumers

OK, so you've looked at your options and Debt Settlement is the way to go...

Although you can attempt to settle your debts on your own, not only does debt settlement takes a lot of time, but you are also going to be going up against trained debt collectors who:

• Are trained professionals
• Don't care about your financial circumstances
• Don't want to hear your story about how you got into this financial trouble
• Are usually paid based on the amount of money they can get you to pay!

A quality Debt Settlement Company will:

• Take the  time to conduct a thorough interview with you (by phone or in their office) as to your financial circumstances.
• Go over you debts and basic household budget to help determine what you can reasonably afford to contribute to the debt settlement program.
• Not try to pressure you into "signing up" quickly, but be willing to not only answer all of your questions, but will also mail, fax or email you a summary of how the program could work for you.
• Be registered (if required by law) in the state in which you reside.
• Maintain a very high rating with the Better Business Bureau.

If it is determined that a Debt Settlement Program is your best option, then:

• You will stop making payments to your creditors (if you haven't already)
• You will make a payment/deposit to your Client Reserve Account through the Debt Settlement Company.  This account is with an Insured Bank located in the state of registration.
• The Debt Settlement Company will contact each of your creditors/collectors in order to stop the collection calls and to begin to negotiate on your behalf.

By the way, you cannot stop the original creditor from calling you about a missed or unpaid account.  They have a right to do so.

But, you can certainly stop the collection calls from debt collectors!

Once your reserve account has sufficient funds, a settlement will be negotiated.  Sometimes this settlement is a lump sum for approximately 50% or less of the balance.  Sometimes this settlement can be paid out over a number of months.

Each settlement, and the subsequent reduction in principal of the settlement, depends on many factors, such as:

• Your employment status (working, W-2 wages or self employed)
• Retired
• Disabled
• On unemployment, etc.

After a settlement has been negotiated, a SETTLEMENT AGREEMENT is faxed, emailed, or mailed. 

If you are going to try and settle your debts on your own, DO NOT SEND OR AUTHORIZE ANY PAYMENT WITHOUT A WRITTEN SETTLEMENT AGREEMENT!

Once the settlement has been completed (according to the terms of the settlement agreement), a letter will be mailed out stating that this account has been:

• Settled-as-agreed
• Settle-for-less-than-the-full-balance, (and sometimes)
• Paid as agreed or Paid in full

The Debt Collector or original creditor if you are dealing with them, should notify each the three top Credit Bureaus that your account has been closed and settled.

HOWEVER, it is a good idea to follow up by running a FREE CREDIT REPORT (after about 45-60 days) to make sure that this account is not showing a balance, etc.

Most Debt Settlement Programs run about 36 -48 months or maybe longer, depending on your financial circumstances.  Once each account has been settled, you're credit scores should start going up!

Debt Settlement is a noble way to do the best you can to repay debts that you owe instead of seeking bankruptcy protection. 

Bankruptcy, in my opinion, should be considered as your last and only option, and I will be blogging about that next time.

For more information about Debt Settlement, click below:

 Photo credit to Betsssssy

If you are living with the stress of too much debt, I have a question...what would you feel like if you were DEBT FREE?.  Regardless of your financial circumstances, you can be DEBT FREE...     How would that feel?

If you were to do a search about the average family debt in America, you would get statistics all over the board.  But, if you were to average them out, here is a basic picture of the average American family's debt:

• Total debt per family                       $ 17,500
• Credit card debt                              $   7,500

Now let's think about that for a minute.  If these are the averages, that means that some households have much lower over-all debt and therefore lower credit card debt. 

But on the other hand, that means that some households have much higher over-all debt and therefore much higher credit card debt!  After helping people solve their debt issues for over 10 years, I have found that our average client has credit card debt that totals about $25,000!

Big question...

HOW WOULD YOU FEEL IF YOU WERE DEBT FREE ? ? ?

Have you ever thought about it?

I'm not talking about dreaming about winning the   lottery, but finally paying off everything and everybody you owe!

No debt...zero...nada !

• No more waking up in the middle of the night worrying about the bills!
• No more standing at the check out counter and praying the card is not declined!
• No more making excuses because you really can't afford to go with your friends!
• No more dreading the end of the month,knowing there is not enough to pay all the bills!
• Get the idea???  NO MORE ! ! !

I was talking to a good friend of mine about this and he said that to him, being DEBT FREE is better than about anything you could imagine!  I think he's right!

When you under the burden, pressure and stress of DEBT, you really can't enjoy life. 

I mean, what good is driving a new car if you know you really can't afford it?  Sure, you have a nice big home, but the truth is, you can barely keep up with the payments, much less pay for any maintenance or additional "trimmings". 

OK...I think I've made my point.  Are you ready be Debt Free?

Or...are you ready to...FEEL WHAT IT'S LIKE TO BE

DEBT FREE?

STEP ONE

It's time to get down to business...financial responsibility.  (Really...has it come to that?)  Financial responsibility starts with an honest accounting for every dollar that comes in, but most important, that goes out.

Yep, the old BASIC HOUSEHOLD BUDGET.

List everything you are spending money on.  Not just the big items like rent or mortgage, car payment, groceries and utilities... I said you have to be honest!

What about:

• Daily latte at Starbucks?  Really?  At $4 -$5 per day?
• Health club membership you rarely use?  Seriously?
• Buying lunch out instead of making a sandwich?
• OK...I know I may be over stepping, but what about that smoking habit?  At $5/pack?
• And yes, you better address all the other little "things" that can really add up!

It's time...and you know it. 

STEP TWO

Now that you've found a few (or several) extra dollars from getting rid of some, if not all, of your "wasteful spending habits", you can start down the road to financial freedom!

Depending on your individual financial circumstances, you most likely will be a candidate for one of the following programs:

• Debt "Roll-Up" or Snowball Plan
• Debt Settlement
• and if none of the above works...Bankruptcy

A DEBT "ROLL-UP" OR Snowball Plan

If you have found an extra $100 or more from making cuts from you "out-go" in the budget and, you have the self discipline to follow through with the program, this might just work for you.

Basically, you are going to list all of your unsecured debt (you can do all debts, but for now let's just tackle the unsecured ones).

List from the smallest balance to the largest balance.  Don't worry about interest rates now.

Le't say the smallest balance requires a $50/month minimum payment and you have an extra $200 (from all of the $ you were wasting).  You are going to pay $250 towards this balance until it is paid off.

After it is paid off, you are going to start on the next balance.  Let's say you have been making $100/month as a minimum payment on this one.  Now, you are going to add the $250 from paying off the first balance to the normal $100 for a total of $350 going after this second balance.

Once it's paid off, you're going to add $350 to whatever the minimum payment is on the next balance...and so on...and so on.

Guess what?  You're going to have all of these unsecured debts paid off before you know it!

HOW'S THAT GONNA FEEL???

Oh yeah, baby!!!

And since this worked so well on the unsecured debts, what about adding the extra money you now have from paying all of them off to your mortgage or student loans?  Wow!

Need some help with this?

If you don't have any extra money or if it seems a little "overwhelming", then you should consider a DEBT SETTLEMENT PLAN.

Debt Settlement is for people who, because of circumstances beyond their control, find themsleves in serious debt.  If you can't afford the minimum payments on all of your unsecured debts and/or some have been turned over to a debt collector, you would profit from a Debt Settlement Plan.

Debt collectors are usually willing to accept less than the balance due because of your financial hardship.  This can be 50% or more, again, depending on several factors.

Once the balance has been negotiated and the debt settlement agreement is paid per the debt settlement agreemenet, this account will be noted on your credit report as "paid-in-full" or "paid-as-agreed" or even "settled at less than the balance due". Regardless, the balance is ZERO....$0.

Let me ask you again...

HOW'S IT GONNA FEEL TO BE DEBT FREE!!!

OK, let's say that things are so bad you can't take advantage of the Debt "Roll-UP" Plan or even the Debt Settlement Plan, then you should consider Bankruptcy.

You will need to find a compentent bankruptcy attorney, but be careful!  You should interview two or three in your area and get some references.

You should not have to pay too much up-front for their services and you should not have to pay anything for the initial consultation.

But even if you have no choice but to file for bankruptcy, life is not over!  The bankruptcy process is not as bad as you imagine.  In fact, once it is completed, not only will you be DEBT FREE once again, you will be able to rebuild your credit a lot quicker than you think.

Sit back, close your eyes...one more time, let me ask you...

HOW WOULD YOU FEEL IF YOU WERE DEBT FREE?

Then do something about it...

Photos by eric731

Looking for Debt Relief in Portland, Oregon?

Dealing with the stress of too much debt can be overwhelming.  

But, GOOD NEWS, YOU HAVE OPTIONS that can help you become DEBT FREE once again!

DEBT MANAGEMENT

If you have accumulated too much credit card debt or other unsecured debts such as:

• STORE CARDS
• PERSONAL BANK LOAN
• PRIVATE STUDENT LOANS
• REPOSSION DEFICITE JUDGMENT
• MEDICAL BILLS

In a Debt Management Program, a Debt Management Company will contact each of your creditors and set up agreements to repay your entire balance. In most cases, your interest rate will be lowered or eliminated and late fees and over-the-limit fees will be stopped or forgiven.

You will have ONE MONTHLY PAYMENT which will be distributed to  each creditor according to the agreements.  This payment is approximately 2.5% - 2.7% of the total balances of all of your accounts.

For example, let's say you have a total of $20,000 of unsecured debts.  Your monthly payment in a Debt Management Program would be approximately $500 - $540.  This includes the monthly Debt Management Program fee.

Not everyone can handle this payment.  If this is your case, them you should check out and investigate a:

DEBT SETTLEMENT PROGRAM

Debt Settlement is for people who have had a serious financial setback due to a number of factors including:

• UNEMPLOYMENT
• ILLNESS
• DISABILITY
• DIVORCE
• DEATH OF SPOUSE OR PARTNER

There are several factors to consider before enrolling in a Debt Settlement Program, but see if some of these describes you:

• Missing or unable to make all of the minimum monthly payments required by your creditor.
• Taking cash advances to be able to pay basic monthly bills.
• Some or all of your accounts are 60 -90 days past due.
• Some or all of your accounts have been charged off and placed with Debt Collectors.
• You are getting numerous DEBT COLLECTION CALLS!
• You have received a SUMMONS.

BANKRUPTCY

 Photo by:

http://www.flickr.com/photos/89463094@N02/

When faced with too much credit card and other unsecured debts, you really have only a few options. 

Here's some tips how to determine your best option?

I'm talking about credit card debt as well as other unsecured debts such as:

• Personal loans
• Private student loans
• Store cards
• Medical bills
• Repossessions

Next to a very large consolidation loan (personal or home equity type), borrowing money from family and friends, withdrawing money from your 401(K) or other retirement plans, you really only have 3 basic options.

• Debt Management (or in some cases using a Snowball Debt Reduction Plan)
• Debt Settlement
• Bankruptcy

Notice I didn't mention using the creditor's offer of a Hardship Plan as this is only a temporary, short term fix, that only delays the inevitable repayment of the debt!

And also notice that I didn't mention the so called "Pay-Day" loans.  Stay clear of those at all costs!!!

Do you qualify for a Debt Management Program?

If you are only able to make the minimum payments required of all of your credit cards and other unsecured debts, you should know by now that it may take you many years (anywhere from 10-15, depending on which article your read) and 3-4 times the original amount borrowed to repay those debts!

If you enroll in a Debt Management Program (formerly and sometimes still referred to as a Credit Counseling Program), here's what usually happens:

The Debt Management Company will contact each of your creditors.  Most of the hundreds upon hundreds of creditors usually have an agreement with Debt Management Companies to:

• Lower or eliminate interest rates
• Forgive or reduce late or over-the-limit fees
• Re-Age your account (make it look like it you are not behind on payments)

You will make ONE MONTHLY PAYMENT to the Debt Management Company.  Although some of the Ads you see or hear seem to say that they can reduce your monthly payment, that is not usually the case.

Credit card companies figured out many years ago that they could make more money by NOT HAVING THE CONSUMER PAY OFF THE CARDS!  That's right, the credit card industry actually makes more profit from late fees, over-limit-fees, annual fees and low minimum monthly payment requirements, than they do on the high interest rates they charge.

For some shocking insight into what credit cards companies are doing, click here.

I don't want to get lost in the various calculation methods the credit card companies use to calculate the minimum monthly payment, but most credit card companies only charge 2% of the balance/12.

In most Debt Management Programs, the total or single monthly payment you will be required to make is about 2.7%.  This includes the payment to the Debt Management Company.  Did you really think they worked for free because they are incorporated as a "non-profit"?

Example:  Let's say you have a total of $20,000 of credit card debt.  (BTW...the average consumer has 8 cards with an average total balance of $9,000!)

$20,000 x 2% = $400 minimum monthly payment required now

In a Debt Management Program, $20,000 x 2.7% = $540 per month or $140 more!!!

If you are barely making the minimum payments now, how can you increase it by $140?

But before I move on to the second option, if you could make increase your monthly payments each month, why not check out a SNOWBALL DEBT REDUCTION PLAN?

A Snowball Debt Reduction Plan is a great way to reduce your debts more quickly and avoid paying the cost to a Debt Management Company.

However, not everyone has the discipline to set up, monitor and track a Snowball Debt Reduction Plan.  If you're like this, maybe you could use a little help...

But what if you don't have any extra money at the end of the month?  In fact, you are not  making the minimum payments and some or all of your accounts are "past-due" or in collections?

Then you should consider a Debt Settlement Program.

Or, perhaps you have fallen behind because of:

• Small fixed retirement income
• Disability
• Unemployment
• Divorce
• Death of spouse or partner
• Too little income...too much debt!

A Debt Settlement Program may be just what you need!

• One monthly payment (customized to fit your existing budget)
• Most debts will eventually be settled for 50% or more
• Avoid seeking bankruptcy
• Become DEBT FREE in 36-48 months 

Want a complete overview?  Download our FREE BOOKLET:

What about Bankruptcy?

If your financial situation is such that you not only cannot afford extra payments required of a Debt Management Program, a Snowball Debt Reduction Plan or a Debt Settlement Program, then you need to consult an attorney about BANKRUPTCY.

There are differing opinions about bankruptcy, but regardless, if you have accumulated so much debt that realistically you will never be able to repay, you owe it to yourself to check out your bankruptcy options.

Other questions?  Let us help.

New year, new year's resolutions. Don't you think it is about time for you to consider Debt Relief?

Sure, you say, but what is "Debt Relief"?

I'm talking here specifically about finally starting to take control of your unsecured debts...mainly credit card debt.

You've heard or read the statistics about how many individuals have too much credit card debt based on their income and living circumstances.

With credit card interest rates anywhere from 12%-24% or higher, if you are just making the minimum payments required, it could take you 10 years or more to finally pay off those debts!

Wouldn't it feel great to be DEBT FREE? OK, here are some tips that can really help if you will apply:

FIRST:  Do you know exactly where you are financially?  I mean, can you account for almost every dollar that comes in and for every dollar that goes out?

Most people have a vague idea, but have never taken the time to do a complete, thorough Financial Worksheet.

After completing a Financial Worksheet, I've had people say, "WOW, I had no idea that I was spending so much money on stuff like Starbucks, movies, burgers, etc."

Until you get a clear picture (and you may not like it) of where you really are, you cannot possibly make a plan to become Debt Free.

Here is a simply, easy-to-use Financial Worksheet that you can download:

SECOND: Now that you have a clear, honest (it won't help if you are not honest with yourself!) picute of where you are, it's time to get an up-to-date CREDIT REPORT.

You can get a FREE CREDIT REPORT annually that will tell you how much debt is being reported to the 3 Major Credit Bureaus (Equifax, TransUnion, Experian).

Not only will this report tell you to whom and how much debt you have, you may also discover that there are errors on the report.  I've read reports that 1 out of 4 people have errors on their report.

If you find errors, you can file a challenge to each of the bureaus on line or you can mail a challenge.

The following links will help:

Equifax disputes

TransUnion disputes

Experian disputes

There is a very good site from the Federal Trade Commission that will give you some good points on for do-it-yourself credit repair.

OK, but how about all of the legitimate debts that is being reported?

Break them down into two basic groups:

Secured debts, such as:

• First Mortgage loans
• Second Mortgare or Equity Line of Credits
• Auto, boat, RV loans
• Government Student Loans

There is not a lot you an do about these except keep paying.

But on the other hand, all of the UNSECURED LOANS, such as:

• Credit Cards
• Store Cards
• Personal loans
• Mecical bills
• Pay Day loans
• Private Student Loans

You do have options as to how to repay these...read on.

NEXT... List all of the unsecured loans like this:

             Creditor, Interest Rate, Payment (minimum), Balance

Here is where the Financial Worksheet is so important.

After completing the Financial Worksheet, you will be in one of the following groups:

After all bills (including all debts) are paid, I have $100 - $200 extra each month that could be used to start paying down unsecured debt.

You find out that you are basically even at the end of the month.  You are paying all bills (including all debts) and you have basically $0 left over, but not negative.

Finally, if after completing a thorough Financial Worksheet, you realize that you are coming out negative at the end of the month. 

You probably alreaday knew this, as you have been "robbing Peter to pay Paul" for a long time.  In fact, some, if not all of your unsecured debts are 30,60 or 90 days late and some, if not all, have been charged off and gone to a Debt Collection Agency.

Here are your options, based on your personal financial situation (revealed from the Financial Worksheet and Credit Reports):

Group One... Those of you who can put an extra $100-$200 towards paying down unsecured debts.

You should use a SNOWBALL PLAN to pay off those unsecure debts a lot sooner and at the same time, save you thousands of dollars in interest!

Basically, you break down your unsecured debts and start paying extra to the one with the lowest balance. 

After this one is paid off, you use the same extra, plus the minimum payment just paid off plus the minimum payment due  on the second and put all of that towards that second debt.

For a more complete overview, click here.

But what about Group 2?  You are making all of your payments, but there is just not anything left over?

You should be able to qualify for a DEBT MANAGEMENT PROGRAM.

• In a Debt Management Program, you will have one monthly payment that will be disbursed to each of your creditors by a Debt Management Company.
• Your interest rates should be reduced significantly.
• Late fees and over-the-limit fees should be stopped or forgiven.

In short, a Debt Management Program can not only help you become Debt Free in a shorter amount of time (usually about 48 months), but save you thousands of dollars in interest and fees.

Finally, what about Group 3?  Those of you who have too much unsecured debt and are not only not getting anywhere but really can't afford your payments...here are your choices:

• DEBT SETTLEMENT
• BANKRUPTCY

Debt Settlement is a great way to pay off/settle your unsecure debts without having to resort to bankrutpcy.

Debt Settlement will allow you to have:

• One Monthly Payment (usually much lower than the required total minimum payments now)
• Your Debt can be settled at 50% or lower (depending on several factors)
• You can be DEBT FREE in about 48 months.

To receive a FREE REPORT called DEBT SETTLEMENT FOR BEGINNERS, click below:

But if you cannot even afford the reduced payment of a Debt Settlement Program, then you should consider BANKRUPTCY as a way to not only cancel your unsecured debts, but relieve the constant finacial pressure and worry that comes from such a severe financial condition.

You should consult a Bankruptcy Attorney who specializes in Bankruptcy.  You should be able to schedule a Free Consultation to deteremine if you qualify.

Regardless of your situation, there is a way to not only become Debt Free, but stop the collection calls and relieve the constanct pressure that comes with too much debt.

Photo By: Eamon Curry

If you live in Oregon, I've got some good news on how you can find debt relief!

If you are fighting each month to just barely get by, you are not alone.  Statistics abound about how the average family has several credit cards and several thousands of dollars of debt.

What can you do about it?

Face the problem, honestly!

When is the last time you sat down and completed and honest, up-to-date HOUSEHOLD BUDGET?

If you are having a difficult time with too much credit debt, then the natural tendency is to avoid or ignore the facts, but you can't get out of debt without know exactly where you stand financially. Once you know exactly what you have coming in and exactly what you are spending your money on each month, we can devise a plan.

BASIC DEBT RELIEF OPTIONS:

DEBT MANAGEMENT

In a Debt Management Program, you will be making ONE PAYMENT to a Debt Management Company or what some people call a Credit Counseling Company.

This company will in turn have contacted each of your creditors to arrange a repayment plan.

Most Debt Management Programs take about 48 months to complete. 

Once you have competed the program, you will not only have saved a substantial amount of money in reduced interest and fees, but your credit report will reflect that you have $0 balances and your credit score will start to improve.

The problem with most Debt Management Programs is that depending on the amount of debt you owe and your left over or net, disposable income each month, you may not qualify.

Example:

Let's say you have $25,000 of various credit card debt.  At 2% of the $25,000 you owe on all of your cards, your minimum payment was $500.

Because the credit card industry figured out that they will make much more money in the long run if they make the minimum payment so small that that most people will take 10 -15 years or more to finally repay the debt.

And, the most tragic thing is that if and when you finally do pay all of the credit card debt, you will have paid 3 - 4 times more than you originally borrowed!

But in a Debt Management Program, you most likely will need to pay about 2.5% of the total, or in this case of $25,000 total credit card debt, $625 monthly!

But don't panic!  There's another option:

Debt Settlement

In a Debt Settlement Program, your payment or actually, your deposit to a bank insured reserve account is based on several factors:

• The type of income you are receiving
• The amount you have left over at the end of the month
• Your health
• Your retiement status

In a Debt Settlement Program, your creditors will not be receiving normal, monthly minimum payments as before.

Most people who have so much debt that they cannot keep up have fallen behind already or have had some accounts turned over to debt collectors anyway.

A professional Debt Settlement Company will negotiate a reduced balance (usually around 50% and sometimes less) with the creditor or debt collector.

Once the debt has been settled (by lump sum payment or over series of payments), the debt collector will report the debt to have been "settled-as-agreed" to each of the Credit Reporting Agencies.

For more information about Debt Settlement, click below:

But what if you do not qualify for Debt Management or Debt Settlement?

If that is the case, then you may need to seek BANKRUPTCY PROTECTION from your creditors.

Bankruptcy is a viable option to finally get out of debt.  Bankruptcy should be viewed as the last option (in my opinion) and not just a "get out of jail card" so to speak.

You will need to sit down with a BANKRUPTCY ATTORNEY in your area to discuss your situation and your options.

Depending on your specific financial circumstances, you will most likely be placed in a Chapter 7 or Chapter 13 bankruptcy.  The bankruptcy attorney will explain the differences.

We have been helping Oregonians become DEBT FREE for over 10 years.  Don't let fear of the unknown keep you in contast turmoil over too much debt.

You have options for debt relief, and we can help!