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

You need to understand what a debt collector CAN and CANNOT DO!

Make no mistake, it is a scary time when someone knocks on your door and says something like, "Are you....You've been served!"

Sometimes, the delivery person is a police officer and that even makes it worse!

Someone has said that FEAR is:

• False
• Evidence, that
• Appears
• Real

So true!  We often get "freaked-out" because we think something is what is not.

Let me try and help you get over the fear of receiving a summons!

I/we've been helping people with DEBT, basically UNSECURED DEBTS, for many years.

When you have too much debt to keep up with the payments due, they may be charged off by the original creditor or placed with a collection agency in an effort to collect on the delinquent debt.

If you've ever been in that situation, you know that you get letters and calls and calls and calls.  By the way...hears how to put a stop to collection calls:

If the collector cannot get you to pay the debt, they may decide to FILE A COMPLAINT. This is a legal technique whereby an attorney, licensed in your state, is hired by the debt collector or creditor to file an official complaint with your county court.

Next, you will receive a SUMMONS.  And this is when it gets scary!

We're located in Portland, Oregon and in the County of Multnomah.  A client recently sent us a SUMMONS and this is what it said (you can understand why they were upset!):

"YOU ARE HEREBY required to appear and defend the complaint filed against you in the above-entitled action within thirty (30) days from the date of service of this summons to you.  In case of your failure to do so, for want thereof, Plaintiff will apply to court for the relief demanded in the complaint."

"You must "appear" in this case or the other side will win automatically.  To "appear" you must file with the court a legal paper called a "motion" or "answer".  The"motion" or "answer" must be given to the court clerk or administrator within 30 days along with the required filing fee.  It must be in the proper form and have proof of service on the Plaintiff's attorney or, if the Plaintiff does not have an attorney, proof of service on the Plaintiff.  If you have any questions, you should see an attorney immediately."

       WOW, NO WONDER PEOPLE GET SCARRED!!!

OK, let's calm down and look closely at the SUMMONS.

First, in the case of UNSECURED DEBTS (Credit cards, medical bills, personal loans, Store Cards, private student loans, etc.), the Plaintiff (this is the creditor or who you owe the money to) cannot:

• Put you in jail
• Take other belongings
• Cause you any harm, etc.

In fact, there are limits and protection for consumers by the Fair Debt Collection Practices Act that you should be aware of.

Next, the SUMMONS seems to say that you are going to have to GO TO COURT!

NO IT DOESN'T!  (Remember, FEAR...False Evidence that Appears Real?)

If you don't believe you owe the DEBT=CLAIM, then you must file an "Answer", which not only costs (about $165 last I heard in Multnomah County) but it must be in the proper, legal format which may require an attorney to prepare...more costs!

BUT, since you owe the debt (not the time to talk about the outrageous fees and interest tacked on), then you won't be filing an ANSWER.

SO NOW WHAT???

You should contact the attorney for the Plaintiff (creditor) and try to work out a repayment plan.

If you are employed (receive W-2 income), then you are not going to have very much leverage at this point.  But, you should be able to negotiate a reduced settlement (if you have a large sum of funds to offer) or a repayment plan of the entire debt balance.

If the Plaintiff is awarded a judgment (which most likely they will win), then they can file a WRIT OF GARNISHMENT and your employer would have no choice but to deduct 25% of your net income (most states) and send it to the Plaintiff until the entire balance is paid!

Think about that for a minute.  Let's say that you usual bring home pay (after taxes are withheld) is $2,500/month.  At 25%, that's an additional $625 per month that would be deducted, leaving you with only $1875 to pay bills!  Ouch!

Remember when you ignored those letters and calls?  Well, this is one of the results that can happen.  It is always better to try and negotiate with the creditor or collection agency than let the account go to this.

If you are self employed, you may have a little more leverage in that your "salary" may be low enough (if you are using a good accountant) to be exempt from garnishment.  To see what this exemption amount is, check with your state's attorney general's website.

In Oregon, go to: State of Oregon Garnishment Forms.

If you are retired and are living solely on Retirement or Social Security, then those funds are protected from Garnishment or even a Bank Levy.

If you are SELF EMPLOYED or RETIRED, or receiving only DISABILITY INCOME, you should be able to negotiate a pretty decent settlement at 50% or less of the balance.

We've prepared a very good booklet that will explain how Debt Settlement can work:

 OK, I hope you are starting to understand that just because you receive a SUMMONS, you are still going to be OK, BUT YOU HAVE TO TAKE ACTION...AND I MEAN IMMEDIATELY!!!

If you are not sure you can deal with debt collectors or the attorney for the Plaintiff, we can help:

Photo credit:  Kevin B3 at www.milwaukieemakerspace.org/2012/fear/

Are you a victim of the "Credit Card Trap"?  Too much debt?  No end in sight?  If you are, here are some ways to free yourself.

I've been helping people become Debt Free for over 10 years.  The average person that seeks help for getting out from under too much debt,  got into trouble by falling victim to the traps set by the credit card industry!

I saw this sign (above) yesterday in the parking lot of a major retailer and took a picture.

"Shop now, pay later"...pretty much says it all, doesn't it?

Years ago (many,many years ago), a credit card was not easy to get.  You had to have excellent credit, above average income and employment history...basically, you didn't really need one.

The idea of using a credit card was for convenience.  Rather than having to carry a lot of cash or write a check, you could just whip out the credit card.  Then, when the statement came, you paid it off...100%.

The credit card industry charged a reasonable interest rate, demanded a minimum payment of around 3% or more, and made zillions of dollars.

One day, someone in the credit card industry looked at the numbers (profits) generated by these cards and realized that they actually made more profit from fees, such as:

• Annual fees
• Late fees
• Over-the-Limit fees

...than they did by the interest rates they charged!!!

Again, years ago, most credit card account holders paid off the account each month.  Then, someone got the bright idea that if an account got paid off, then there would not be little, if any, profit from interest rates and fees.

                                    What to do????

They came up with the idea to only charge a very small monthly minimum payment so that more and more people could charge their accounts to the limit and only have to pay 2% or so each month based on the balance.

Let's say you had an account with a $5,000 credit limit and so far, your balance is only $2,000.  $2,000 x 2% = $40, but you send in the $50.

Before I get into the details of how much this will cost you over time, let's talk about the really dangerous CREDIT CARD TRAP....

Have you ever thought (or done):

"Since I have a limit of $5,000 and I only owe $2,000 with a $50 a month payment, I'll charge another $1,000 and my payment will only go up $25 or so."

This is where most people start getting into real trouble.  Before you increase your debt, check out what your credit card company is really charging you:

OK, let's say you didn't increase the balance.  Next month, you get your bill and as you start trying to understand it (right!), you notice that there was an interest charge of $35!!! How can that be?

You also notice that the Annual Percentage Rate (APR) is 21%.  Although there are various methods different companies use to calculate the interest due, for simplicities sake:

        $2,000 balance x 21% = $420 (annual interest based on $2,000)

        For this month, you divide $420 by 12 (months) = $35

        Now you see the account summary and notice:

        Previous Balance                 $2,000

        Interest charge                    $    35

        Payment                             ($   50)

        New Balance                       $1,985

     That's right, your balance was only reduce by $15!   

Now, you don't have to be a genius to figure out that at that rate, you are going to be paying on that debt for a long, long time to pay off that credit card.

Think about that for a minute... 

When you finally pay off that debt (at the small minimum monthly payment), you will have paid at least 2 to 3 times as much as the original balance!

And, don't forget about those fees!

                         THERE IS A BETTER WAY!

Depending on several factors such as:

• Your employment (self or W-2)
• Income
• Marital status
• Health (disabled?)
• Age (retired?

...you would most likely qualify for one of the following programs:

• Debt Management

• Debt Settlement

• Snowball Pay-off plan

Rather than get into each plan, I've attached links (above) to previous blogs or more information you can access for FREE.

Credit Cards are a very dangerous trap and should be avoided and/or managed at all costs!  Please proceed with caution!

If you have had a debt settled for less than the total balance, you may receive a 1099-C.  You may or may not have to pay any additional tax.

When you settle a debt for less than the full balance due, and this is for $600 or more, the creditor or debt collector may report this to the Internal Revenue Service.  I say "may report" because they don't always report a settled or "forgiven" debt. 

Over the past decade that we have been helping people get out of debt, it seems that in the last year or so, more and more creditors and/or debt collectors are reporting settled or forgiven debt.

I have to start out by stating that I am not a CPA or licensed professional tax consultant, so any advice here should only be used to help point you in the right direction.  If you do receive a 1099-C, please seek the help of a professional tax consultant!

So what should you do if you receive a 1099-C?

                             DON'T IGNORE IT!!!!

Let's say that you had a Credit Card that had a balance of $10,000 and because of circumstances beyond your control, you just couldn't make the minimum payments.

Most likely, this account was sent to a collection agency after the original creditor made numerous attempts, such as annoying and often harassing phone calls and many collection letters.

The debt collector may have sent you an offer to settle for less than the full amount due or perhaps you or a Debt Settlement Company were able to negotiate a good settlement.

Using our $10,000 example, let's say that the settlement was for $4,000.  The debt collector was willing to "forgive" (in IRS lingo) $6,000.  The debt collector reports this to the IRS in order to write that amount off as a loss and you are sent an IRS form 1099-C.

At first glance, it may look like you owe $6,000 of additional tax, but this is not so!

You will need to file the proper forms with your tax return to have the settled or forgiven amount EXCLUDED from being added back in as additional taxable income.

As usual, the IRS seems to have complicated the process, but in reality, it is not that difficult to file properly.

The basic and most important question that you must answer and prove to the IRS is:

"At the time of the settlement or forgiveness of the debt, were you insolvent?"

What is "insolvent"?

If, AT THE TIME OF THE SETTLEMENT, you had more debt than you had in assets, then you were insolvent. (Sounds terrible, but that's just their terminology.)

So, how do you find out or prove if you were insolvent or not?

It is really not difficult.  Take a piece of paper (or use your computer if you want) and one side list all of your assets, such as:

• Net equity of your home (Current value less amount you owe = net equity)
• Cash or money in the bank
• Net DEPRECIATED value of things such as furniture, appliances, tools, etc.  remember, even though you paid $2,000 for that refrigerator a few years ago, today it probably would sell for only $200-$300!
• Net value of your autos, boats, campers, etc.  Same thing, NET, DEPRECIATED VALUE!

Total all of these up.

On the other side of your sheet, list all of your DEBTS OR LIABILITIES, such as:

Since you've used the NET VALUE (Depreciated Value less Balance still due) on the ASSET SIDE, were probably talking about:

• Credit cards
• Store cards
• Student loans
• Medical Bills
• Personal loans
• Possibly Home Equity loan or 2nd you forgot to list before!

Add all of these up.

Subtract the total of all of your LIABILITIES (DEBTS) from your NET ASSETS. Which is greater?  If your Liabilities are greater than your Net Assets, you were insolvent at the time of settlement and therefore, the amount forgiven WILL NOT be included as taxable income.

The next part seems a little difficult, but it's not.

You are going to complete:

• IRS Form 982
• A copy of your ASSETS VS. LIABILITIES worksheet
• A copy of the 1099-C

You are going include these along with your normal tax return.  By the way, don't be surprised if your tax preparer seems a little confused as to how to handle a 1099-C.  I've had clients pay tax that they didn't need to because the tax preparer didn't file the proper forms.

We have prepared a FREE 1099-C PACKET that you can download and use. 

It includes:

• Instructions
• Examples
• IRS Forms

Get yours by clicking on the button below:

You are going to need the help of a qualified, tax consultant or preparer.  You still should be able to exclude a large percentage of the forgiven debt, but there may be other ramifications, so I advise you to get help.

Photo credit: www.lendingmemo.com

If you are considering enrolling in a Debt Settlement Program, you may be asking yourself, "Does Debt Settlement really work?"

There are several options available to help you get your debt under control, including:

• Debt Management Program
• Debt Settlement Program
• Consolidation of Debt

While a Debt Management Program may be just the program you need, if you are having a tough time just keeping up with the minimum payments, you should consider a DEBT SETTLEMENT PROGRAM.

Some of the adantages of a Debt Settlement Program:

• ONE monthly payment that is typically much less that what you are paying now.
• Most debts can be negotiated at 50% or in some cases, much less.
• A typical Debt Settlement Program will be about 36-48 months, depending on a number of factors.

So, the question you may be asking is, "Does Debt Settlement really work?"

Yes, if you fit the criteria for a Debt Settlement Program.  Many so-called "Debt Settlement Companies" only offer...Debt Settlement as the answer to anyone with debt problems.

Everyone should know that "one size does not fit all"!

Before you decide, it is critically important that you explore all of the options that are available to you.

But if after discussing your situation with a qualified, experience debt relief specialist, you deteremine that a Debt Settlement Program is what you need, you might want to ask for some proof of actual settlements.

Check out some of the actual settlements we have been able to negotiate for our clients:

Successful negotiation of unsecured debt depends on several factors. 

For example, if you are retired and living on Social Security and/or a retirement income, both are 100% exempt from any garnishment or levy by a debt collector.  For these clients, settlements below 50% are possible.

Debt Settlement is really for those who are in a very bad financial situation.  Most prospects for a debt settlement program have had something happen in their lives that has caused them to get over their head with debt, such as:

• Unemployment
• Illness or disability
• Death of a spouse or partner
• Divorce

If you find yourself with too much debt and just not enough income, then you owe it to yourself to look into how debt settlement works and see if would work for you.

 photo by: Eleaf

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.

Here's some very helpful tips on how to put a stop to wage garnishment in Oregon.

First you must understand that a debt collector cannot simply be awarded a wage garnishment for unsecured debts without first having gone through the legal process:

• File a claim in your county courthouse
• A SUMMONS is delivered to you
• Default judgment is awarded if no settlement can be reached
• Apply for a Writ of Garnishment

OK, you've been having a very challenging time, financially due to circumstances beyond your control, such as:

• Loss of employment
• Divorce
• Death in the family
• Illness
• Fixed income of retirement
• Disability

Although you have done your best to try and keep up with your minimum payments, a couple of your accounts have been turned over to a COLLECTION AGENCY, and they have been calling day and night...driving you nuts!

YOU CAN PUT A STOP TO THIS:

DON'T IGNORE THE COLLECTION LETTERS

Most debt collectors and debt collection agencies are willing to work out a repayment and/or settlement of the debt you owe.

Having said, "...you owe...", let's make sure that you really do owe the debt before you pay for something you shouldn't.

The Fair Debt Collection Practices Act allows a debtor who feels that they do not owe the debt claimed by the creditor/collector to require a DEBT VALIDATION.

After you write a letter demanding that the debt collector validate the debt, they must not only stop collection activity (calls, letters, etc.), but provide you with proof that the debt is legitimate.

Some debt collectors are actually "debt purchasers", who buy lists of so-called debts at pennies-on-the-dollar, hoping to get someone to pay who may or may not actually owe the debt.

Here's a FREE Sample Letter for you to use:

One more thing about making sure you actually owe this debt:

Make sure the STAUTE OF LIMITATIONS for you state has not expired.

For example, in my home state, Oregon, the statue of limitations on unsecured debt is 6 years.  This means that if there has been no payments on this account for over 6 years, the debt must be removed from all credit reporting agencies and cannot be collected on any more!

So, now that you have determined if the debt is legitimately yours, it's time to contact the debt collector.

Prepare yourself for a small battle on this!  These are professional debt collectors and they are usually paid a percentage of what they can get you to pay.

Tell them you intend to pay the debt, but you just don't have anything now.

Don't let them trick you into paying just a little bit ($25 or so) "to keep the account in this office" or "to keep the account from going to the legal department".  If the account has passed statute of limitations, that "little payment", could reset the clock!!!

But, for the sake of this blog, Wage Garnishment in Oregon...How to Stop, if you have received notice of a wage garnishment, here's what you can do:

Your employer has no choice but to comply with a WRIT OF GARNISHMENT.  If they ignore it or do not reply, they could receive a hefty fine!

But, make sure that you are making enough money to qualify for a garnishment!  In Oregon, if you take home income is about $850-$900 or so, they you cannot be garnished.

Here's the Oregon site that will help.

Just make sure your employer is aware of the exemption limits.

By the way, if you are receiving certain types of income, these cannot be garnished.

Basically, all retirement income, social security, disiability income, etc. is exempt. 

Check out the complete list here.

But if your income is not exempt, then to put a stop to a wage garnishment, you must contact the debt collector and/or attorney for the debt collector and arrange a STIPULATED AGREEMENT.  

You will need to be prepared to demonstrate to the debt collector or attorney that you are in a very bad financial situation and the wage garnishment will force you into bankruptcy unless they agree to a stipulated agreement.

Prepare a basic household budget showing all of your income and expenditures.  You may have to provide a couple of months of bank account statements and maybe a pay stub or two.

But if you can demonstrate how bad things are, they may be willing to enter into a stipulated agreement.

Now, if by chance you could find a large lump sum, say 50% -75% of the balance, they may and most likely, will take that as a settlement and release the judgment.

I know, but maybe you have someone who could help...just asking.

Of course, if you get the Stipulated Agreement or Settlement Agreement, make sure to get it in writing!

The real key to stopping a wage garnishment in Oregon or any state for that matter is to be pro-active.  Don't just ignore the letters and especially don't ignore the summons.

In most cases, a debt collector will be willing to work with you.

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!

Confused about Debt Settlement?  Here are some easy to understand, basic information about debt settlement that will help.

If you are like thousands of others of consumers that have way to much debt, take heart!

There are several options for you to become DEBT FREE once again, including what is referred to as DEBT SETTLEMENT.

We are all living through some very financially difficult times.  Yes, there are those who say that our economy is starting to rebound, but if you are like so many people, just trying to survive has lead to a mountain of debt that may be out of control.

Most people that seek our help have not run up thousands of dollars of unsecured debt such as:

• Credit Cards
• Store Cards
• Personal loans or lines of credit
• Private student loans
• Cash advance loans

No, most people are probably like you and are in this debt mess due to one or more of the following:

• Major accident or illness
• Limited fixed income of Social Security or meager Retirement Benefits
• Disablitly
• Divorce
• Death of spouse of partner

So, here you are with several credit cards that have balances that demand more of a monthly payment than you can afford!

If you qualify, a DEBT MANAGEMENT PROGRAM might help.  Debt Management is the modern name for what we use to refer as CREDIT COUNSELING.

In a Debt Management Program, each of your creditors usually (not always) agree to a reduced interest rate and possibly a waiver or reduction in over-the-limit fees or late fees.

You would have one monthly payment that is made to a Debt Management Company and they in turn distribute the required amount to each creditor.

Most Debt Management Programs take about 48 months (some less and some more).

The problem with most Debt Management Programs is that the required monthly payment is just too high for all of the debt your are carrying!

For example...

If you have a total of $25,000 charged on several credit cards, the payment needed for most Debt Management Programs would be about 2.5% (or a little more) or about $625 per month!

In my office here in Portland, Oregon, I've had many people tell me, "Are you kidding?  If I had that much, I wouldn't be behind!"

So, that leaves us with Debt Settlement.

In a Debt Settlement Program, a debt counselor will go over your financial/household budget to determine where you stand.

This can be very revealing, as most people take the "head-in-the-sane" approach with so much debt.

You may find out that after being honest with yourself, you really only have about $350 per month remaining after all the essential bills are paid!

DON'T PANIC!

With a Debt Settlement Program, your creditors are not going to be receiving monthly payments.

Instead, you are going to be making a deposit into a FDIC bank account each month.

Yes, your accounts are going to become "late and/or delinquent", but really, there is nothing you can do about it due to your financial hardship.

Once your account is late approximately 120-180 days, the account will be most likely referred to a debt collector.

Now, the original creditor will be willing (not always, but in most cases) to accept a settlement for less that is due on the balance.

Most settlements average around 50% of the balance.  Some lower and some higher, depending on circumstances.

Once the account is SETTLED, you will receive a letter stating that this account has been "paid-as-agreed" or "settled-as-agreed".

The credit reporting agencies will be notified that this account has been settled as well.

Over time, your credit score will show improvement!

If you would like to receive a FREE BOOKLET that will explain more about DEBT SETTLEMENT, click below:

When you have too much credit card debt, you only have a few options. 

Here are 3 options for credit card debt relief:

#1 Debt Management or what is commonly referred to as Credit Counseling

The credit card industry makes billions of dollars loaning us money to purchase things with credit versus using cash.

You can get several types of credit card interest calculator programs on line, but I found a good one at ZilchWorks.

You will be shocked to see how much interest and fees you really pay on your credit cards!

For example...

Let's say you have a Visa Card with a balance of $2,500 at an annual percentage rate of 21%.

How long (and how much) do you think you will repay if you make the minimum payments until the balance is fully paid?

I know it is hard to believe, but you could end up paying back anywhere from 4 to 5 times the original amount you borrowed!

If your one of the 7 out of 10 people in the US that has a credit card balance, and are only able to make the minimum payments each month, you should consider a DEBT MANAGEMENT PROGRAM.

In a DEBT MANAGEMENT PROGRAM, you will have:

• ONE MONTHLY PAYMENT
• REDUCED INTEREST RATES
• WAIVED LATE and/or OVER THE LIMIT FEES

Most Debt Management Programs take about 4 - 5 years to complete, and the consumer will not only be DEBT FREE, but save thousands of dollars in interest and fees.

Does a Debt Management Program hurt you credit score?

Common question, but the answer is not just a simple "yes" or "no".

There are many factors that go into determining a credit score and I've written several blogs over the last few years.  Go to "What Determines My Credit Score" for more information.

But for now, the best answer is "no" because with too much credit, your credit score most likely has already been damaged.

The only way to improve your credit score is to start paying off those debts and a Debt Management Program may be the way to go for you.

But, not everyone can qualify for a Debt Management Program. If that is your situation, then you should strongly consider a DEBT SETTLEMENT PROGRAM.

#2 Debt Settlement Program

Features of a Debt Settlement Program:

• Have ONE MONTHLY PAYMENT (that will fit your current budget)
• Each of your debt will be negotiated at a balance that is approximately 50% of the current balance.
• A QUALIFIED, PROFESSIONAL Debt Settlement Company will explain all of the pros and cons of a Debt Management Program.

There has been a lot of good and bad press written about Debt Settlement Companies.

Here are 3 tips on choosing a good Debt Settlement Company:

1)  Check with the Better Business Bureau.  It is not important that the company be an "accredited" company with the BBB.  The BBB charges a fee (no, the BBB is not a government agency but a "for profit" company.  What you are looking for is the rating (A+) and complaints.  Stay away from "shady" companies!

2)  Are they registered with the state?  Not all states require registration, but if your state does, DO NOT choose a company that is not on the state's list of registered Debt Settlement/Management companies.

3)  When you call the company, are you connected with someone you can understand and that seems to be more interested in you than just "signing you up"?  A good Debt Settlement Company will offer a FREE CONSULTATION WITH NO OBLIGATION.  Don't let anyone or any company pressure you into making a quick decision!

If you do not qualify for a Debt Management or Debt Settlement Program, then you may need to seek BANKRUPTCY PROTECTION.

#3 Bankruptcy Protection

Although the word "bankruptcy" brings up all kinds of sentiments and feelings, in some cases, it is not only the only choice, but could be the best choice!

If your financial situation is so dire that you cannot make payments towards your debts, then you must seek the counsel of a qualified attorney who specializes in bankruptcy.

He or she must offer an initial free consultation and demonstrate not only a professional but personal quality.  If you would just like to get more information without making any commitment, then click on the button below: