• My bills are piling up.
• I can't make the minimum payments.
• I have too much credit card debt.
• What can I do?

You have maxed out most or all of your credit cards and due to circumstances beyond your control:

• Loss of employment
• Sickness
• Emergency expenses
• Divorce
• General economic recession going on...

There is just not enough money to pay the main bills like the rent or mortgage, food, utilities and/or medical or medicines...not to mention to pay off the credit cards.

What now?

The first step is to get a clear picture of exactly where you are financially.  A simple budget spreadsheet will really help. 

I know this is scary and most people avoid know "how bad things are", but you need to know.

Knowing where you are may reveal:

• You're not in bad a shape as you thought
• You're in worse shape than you thought
• Regardless, you'll know what you have to start attacking the problem!

Let's say after listing all net (after-tax and other deductions) you have $150/month to use toward paying off credit card debt.

The problem is, the minimum payments total over $300/month!

Options:

You can call each of your creditors to ask for a lower interest rate and payment so that your account will not go into default.

WARNING!  Creditors don't usually care about your hardship and may not be willing to help. If they will change the interest rate and lower the payment to fit your budget, great. If not...

Consider contacting a Debt Management Company to see if you would qualify for a Debt Management Program (formerly referred to as Credit Counseling).

If you do not qualify (payments would still exceed $150), then you should consider Debt Settlement.

After an account is delinquent more that 120-180 days, most creditors will consider settling the account for less than the full balance.  The problem is that they want 50%-75% of the balance and they want it now! 

Of course, if you had a couple of thousand of dollars on hand, you probably wouldn't be in trouble in the first place.

In some cases, they may consider a term-settlement plan, whereby you agree on a settlement amount and then a payment over several months.

Again, most creditors will tell you they cannot do that and that they would need all of the money in 6 months or less.

We have been helping people settle accounts for many years and have documented proof that they will indeed take a term-settlement for longer than 6 months.

If you cannot negotiate a reasonable settlement, then you should consider contacting a professional Debt Settlement Company.

For a Free, No-Obligation Review of your situation and possible solutions, click here.

“I have too much credit card debt and not enough income! I don’t want to file for bankruptcy, but I don’t know what else to do. Are there any good alternatives to bankruptcy?”

We get asked this question several times a day. The answer is YES! There are some great options available to help you avoid bankruptcy and get back on track.

If you are overwhelmed with too much credit card and other unsecured debts, you are not alone. With almost 1 out of 10 people unemployed and the economy in its worst condition since the Great Depression, thousands people who have always kept up with their debt payments in the past are in trouble and looking for answers.

Debt Management (formerly referred to as Credit Counseling) is a program designed to give the consumer one payment that is then distributed to each to the creditors enrolled in the program. The interest rates and fees are reduced and usually this type of program allows the creditor to be debt free in about 48 months.

Debt Management is a great option, however many people who are struggling financially cannot even keep up with this reduced monthly payment. In that case, more and more people are seeking help with their debt through Debt Settlement.

Most creditors are willing to accept a reduced payoff to accounts that are 180 days or more delinquent. This normally averages 50% of the balance and sometimes even less.

Most Debt Settlement Programs are designed to completely settle all of your debts in 36-48 months, depending on the total amount of debt, type of debt and what your budget will allow you to contribute.

If your financial circumstances won’t allow you to qualify for Debt Settlement, then you should seek the advice of a bankruptcy attorney.

Bankruptcy should be your last option, but in many cases, it is the only and best option.

Just the sound of the word...BANKRUPCY sounds scary, doesn't it?

If you find yourself overwhelmed by too much debt, don't think that bankruptcy is your only choice. 

Millions of people just like you have resolved their debt problem by using alternative methods.

The worse mistake you can make is to DO NOTHING.  If you cannot afford to make the minimum payments due on your credit cards or other unsecured debt, don't put you head in the sand but start to take action.

Call your creditor before the due date of your payment.  You may be able to work out a temporary plan whereby you pay little or nothing for a few months or until you get yourself back on track.

However, don't be surprised to learn that even though you have been a good customer for many years and have never or rarely been late or missed a payment, they refuse to help you.

You'll soon find out that the credit card and banking industry is in business for one reason and one reason only...PROFIT!

Never forget that they DO NOT CARE:

• That you've lost your job
• That you have a family to take care of
• That you've had a serious illness
• That you've gone through a nasty divorce

GET THE PICUTRE! THEY DON'T CARE!

So what can you do?

You should contact a Debt Management Company to see if you can qualify for a Debt Management Program (DMP). If you do, then your interest rates and fees will be greatly reduced and your single payment may be a little less that the total of your current minumum payments due.

If you can't afford the DMP, then you should consider a Settlement Program. 

Once your accounts are delinquent for 120-180 days, the creditor may be willing to accept a settlement offer at about 50% or so if you have that much to make in lump sum.

Of course, for most people, if they had that kind of money, they would be behind in the first place!

You may try to arrange a term-payment settlement, but you may not get as good a deal if it takes 6 months or so to complete.

The main problems with do-it-yourself debt settlement is:

• You will be dealing with professional debt collectors that are trained to intimidate you into sending them as much money as possible.  Be very careful!
• The debt settlement process takes many hours and for most people (who have a job and or family), they just cannot spend that kind of time.

You may want to seek the help of a professional debt settlement company that has the experience to help you.

The point is, there are alternatives to bankruptcy and you should explore them first.

Is the anything you can do to stop wage garnishment?

You pick up your paycheck and notice that money has been withheld due to a wage garnishment.

When a creditor files a claim on an unpaid account, a summons will be delivered to you.

If you ignore it, in about 30 days, a default judgment will be awarded the creditor/plaintiff.

Again, if you do nothing about it, then the creditor may decide to apply for a writ of garnishment.  This is presented to your employer, and depending on which state you live in, you will most likely have 25% of your net check sent to the creditor. 

Your employer has no choice but to honor the writ of garnishment.

SO NOW WHAT?  You have a few options:

If you have any access to a lump sum of about 40%-50% of the total due, then you can contact the original collection agency or attorney for the plaintiff and negotiate a lump sum settlement.

If you don't have a lump sum, then your only option is to present a plan to repay your debt instead of them garnishing your wages. 

Example: 

• Let's say you owe $5,000.
• Your take-home wage averages about $1300, every two weeks.

The wage garnishment allows the plaintiff to garnish 25% or $325 every pay check or $650/month! 

For most people, this would cause them to be unable to pay the mortgage or rent, utilities, food, etc. and ultimately, your only recourse would be to file for bankruptcy protection. 

Before you contact the attorney for the plaintiff or the creditor directly, you need to have a couple of things ready:

A complete basic budget showing all income and outgo each month. Make sure to list everything and be honest.  Let's say you have $100 left over each month (if you're lucky).

It may be helpful to write a brief hardship statement explain why and how you got into this situation. 

• Now call the creditor/attorney and explain your situation. 
• Offer to pay $100/month until the amount is repaid.  Ask them to charge 0% interest.  They may or may not, but they have an option to charge 0% - whatever your state allows in an agreement like this.
• Offer to fax the budget, hardship statement and a copy of your latest pay stub. 

In most cases, they will agree.  If not, explain that if they refuse the offer (don't be ugly here!) then you have no choice but to seek bankruptcy protection as you cannot pay your bills if the wage garnishment continues.

If they agree, MAKE SURE TO GET THE AGREEMENT IN WRITING!

Do not agree to any check-by-phone or any other payment arrangement without the written agreement.

Hope this helps!

Photo By: ladybeames'

Credit Card Debt Negotiation

When faced with extreme financial hardship, making it almost impossible to pay the minimum payments due on your credit cards, you may want to try credit card debt negotiation. 

But before you jump in, you need to understand a few things:

1. Credit card companies, and especially collection agencies, DO NOT CARE about you or your financial circumstances! Don’t waste time trying to explain.  
2. If your account has not been charged off, you are probably not going to get a very good offer or any offer at all.  Creditors usually wait 120-180 days before giving up and charging off an account. 
3. Once the account has been charged off, it most likely will be assigned to a collection agency.  The agency will begin to call (incessantly) in order to get as much money from you as possible. 
4. Collection agencies can make agreements (within their client’s guidelines) to settle accounts for less than the full amount.   
5. But BE AWARE!  The collection agent has been trained to get as much money out of you as possible!  They will use all kinds of tactics (many that violate the FDCPA) in order to intimidate you. 
6. You may be told that they never settle for less than the full amount, but this is not true. 
7. They may say that they settlement agreement must be in a lump sum and usually by the end of the month.  This is not true.  Term settlements can be arranged. 
8. If you agree to a settlement, GET IT IN WRITING!  Do not be tricked into a verbal agreement. 
9. Keep records of payment.  If there are any discrepancies or disputes in the future, you must have proof.

Credit card debt settlement is not easy!  It takes many hours and precise follow up to successfully negotiate with your creditors, so you may want to consider seeking the help of a Debt Settlement agency.

Photo By SqueakyMarmot

        Debt Consolidation

                    vs.

          DebtSettlement 

It is very important to know exactly how much money you have coming in and how much is going out each month before you decide if a Debt Consolidation or Debt Settlement Program is best for you. A basic home budget does not have to be complicated.  You just need to know:

1. How much money (from all sources) do you have after all deductions?
2. How much money do you spend each month? Things like the mortgage or rent, utilities, groceries, auto payments, insurance, etc.  Be sure to write down everything. 

When you know exactly how much money you have (or how little) after paying all of your bills, then we help you decide which program would be best for you. 

Now that you know where you stand financially, does it really make sense to continue making just the minimum payments required by each of your creditors? 

The Credit Card Industry does not want, nor expect you to ever fully repay your accounts! Billions of dollars of interest and fees are earned from the millions who only pay the minimum payment each month. It is estimated that in takes the average consumer 15-20 years to repay a single account at a cost of 3-4 times the total amount charged! There must be a better solution, and there is.  

Debt Consolidation  

In order to determine if you qualify for a Debt Consolidation Program (DCP), you will need some basic information about the debts that you owe. (name of creditors, current balances, minimum payments, etc.) 

Once that information is gathered, a reputable Debt Consolidation Company can tell you what your monthly payment will be and how long it will take to get the debt paid off.  In a DCP: 

• You will have one monthly payment
• Lower your average APR
• Pay off your accounts in 3-5 years 
• Stop creditor calls
• Maintain or even Improve your credit score! (Although your credit score may decline slightly while you are in the program, once you have completed the program, your scores should improve. For more information, visit www.myfico.com )

But what if you cannot afford the minimum payment required by a DCP? 

Debt Settlement

Debt Settlement is a program designed for those who:

• Are facing severe financial hardship due to circumstances beyond their control (loss or lower income due to unemployment, lay-offs, divorce, disability, insufficient retirement income, etc.)
• Have considered a Debt Consolidation Program (above), but simply cannot qualify or afford the monthly payment required.
• Do not want to file for bankruptcy. 

If you have fallen behind in making your minimum payments (or are about to), Debt Settlement might be the best choice for you. Through this program, each month you will deposit an amount you can afford (based on your budget) into savings-settlement account.

As your savings-settlement account grows, offers are being made by the Debt Settlement Company for a settlement of your debts.  Although the final settlement amount cannot be guaranteed, it is usually much less than the balance. 

Most creditors will accept a settlement, but there are some cases where a creditor may attempt to seek legal action in order to collect the full balance. However, successful settlements can still be made in spite of a judgment. Most creditors would rather accept a settlement offer than force you to consider bankruptcy.

As you can see, there are options available to help you eliminate your debt.  Both the Debt Consolidation and Debt Settlement programs work for different financial situations, but the end result is the same.  Eliminate your debt in a short period of time and save money in the proccess!

Click HERE to get your FREE Personal Debt Elimination Summary!

Photo by: SMJJP

Is Settling Credit Card Debt on Your own a Good Idea?

People call in asking about our Debt Settlement program every day.  Once we discuss the program and how it works we are often asked the question, " Why can't I just settle these debts on my own?" 

The bottom line is, you can settle your outstanding unsecured debts on your own.  All you need to do is call up your creditors, explain your hardship situation, and make them a settlement offer.  Sounds pretty easy, right?

It's not quite that simple.  You absolutely can settle your debts on your own, but you would be doing yourself and your wallet a disservice!  Debt Settlement programs offer you years of experience and expertise in dealing with your creditors and collections agencies, and most of the time they can get your debts settled for MUCH LESS than you can on your own. 

Why can Debt Settlement programs get you a better deal?

1. Years of practice: Good Debt Settlement negotiators have been settling debts for years on end.  This is what they do, and they have had a lot of time to hone their debt negotiating skills.
2. No emotional attachment: When you negotiate your own debt, you are emotionally attached to the situation. The debt collectors know this and will use it to their advantage. 
3. knowledge of the rules: Although Debt Settlement programs do not need to have any attorney on staff, they do have to have an understanding of the debt collection laws of each state.  They know what a creditor can and cannot do in a given situation, so the creditors cannot scare them into settling for more than they should.
4. Peace of mind:Collections agents can be extremely threatening and scary to deal with.  It is the Debt Settlement negotiators job to handle all communications with your creditors.  You have a highly qualified professional in your corner and that in itself is indispensable.  
5. Dedicated savings plan: Most people don't have thousands of dollars sitting around to use when negotiating with their creditors.  Debt Settlement programs put you on a dedicated savings plan to build the funds necessary to get your debts settled once and for all!

These are just a few of the reasons why settling your own debt could cost you in the long run. Using the resources of a Debt Settlement program will save you money and relieve the pressure of dealing with your creditors.  Although settling your debts on your own can work, Debt Settlement programs are most often the better choice.  

“I’ve got too much credit card debt!  What’s the best way to eliminate it?”

 You have a few options:

• Hit the lottery and pay them off in a lump sum…yeah right!
• Continue making minimum payments…forever.
• A Credit Counseling Program or what is called Debt Management today.
• A Debt Settlement Program, or if all else fails…
• Bankruptcy

Short of paying off all of your credit card debt in a lump sum, you know that making minimum payments is a trick the credit card industry has been fooling consumers with for a long time.  Making the minimum payment on your cards could take 10-15 years and end up costing you 3-4 times the original amount you borrowed because of the interest rates and hidden fees.

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

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

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