Archive for the ‘Get Out of Debt’ Category
It’s a known fact that debt collection agencies regularly violate the law in the process of collecting debts. Many years of poor oversight and neglect have allowed these companies to cross the boundaries beyond acceptable limits. In 2010 the mortgage industry was exposed for “robo-signing” foreclosure papers on millions of American Homeowners. When it first came out there was a huge uproar and publicity blitz by the banking industry. Sadly, this story has slipped into the shadows of American Consciousness as foreclosures continue to climb unchecked. Many don’t realize that “robo-signing” is the norm for the banking industry, not the exception. Collection Agencies have used pre-signed affidavits for years to validate and confirm debts, many of which are overstated or not even owed at all. This interesting article in the Wall Street Journal – titled Dead Soul Is a Debt Collector chronicles just how bad it is. Thousands of affidavits, signed by a woman who died in 1995 have been used in court to legally validate and document debt. There is no oversight, no morals, no compass for doing a job well. Because it’s in a computer somewhere, right or wrong, consumers are harmed daily by these companies.
Most consumers that I talk with want to get pay off their debt. They simply run into brick walls when attempting to work with collection agencies or original creditors. These tactics clearly outline why it’s important to hire reputable professionals whose objective is to facilitate the mine fields for you. One such company is Debt Pros Group, consumer debt consultants in Redding, California.
One of the most common questions we get is how debt settlement will impact a credit score. Normally, by the time a client reaches the point of calling for debt settlement help, their credit has already been or is about to be impacted.
If you are current on all of your payments, debt settlement will negatively affect your credit score. With that said, if you can afford to pay off your debt in full on your own, you should do so. There are non hardship programs available that can help you get your spending under control. It is important to note that even if you are current with your payments but your credit cards are maxed out, your credit score profile can be negatively impacted. If you are struggling, are already behind in your credit card payments or feel you may be in the near future, your first goal should be to get out of debt then rebuild your credit profile. As you move through the debt settlement program, each time a debt is settled, the creditor is required to report a 0 balance owing on the credit report. Every credit situation is unique. We cannot predict or make any promises regarding your individual credit outcome after debt negotiation. Please visit the following links for more information: Debt Settlement is very different from Credit Counseling. With debt settlement the principal balances of your credit cards are negotiated and settled at a lower balance. This means that you typically repay less than the balance.
By contrast credit counseling programs do not negotiate your balance, they reduce your interest rates, though not all creditors may give you a reduction. There is data that shows fewer people graduate these programs because the payments are often about the same as making minimum payments. Also the debts are typically paid down – usually over 5-7 years, which can be faster than just making minimum payments. Although they may claim to be non-profit, credit counseling companies are paid by the creditors themselves for collecting the debt on top of the fees they charge the consumer. In the past, many have had their non-profit status revoked by the IRS. Here is an article from the Washington Post that talks about this issue.
Debt Settlement is simply the process of negotiating a reduction in the principal balance in your credit card balances. Often it creates a win/win scenario for both the creditor and the consumer. The process is simple, but important, as not everyone will qualify for the program.
To request a free debt analysis, call us directly at 530-222-9500 or request an analysis right here. We will call you back and have an honest discussion with you.
Millions of Americans are struggling with Credit Card Debt. In today’s challenging economy many are finding themselves over their heads due to reduced income, loss of job, or simply because the credit card companies have raised interest rates to the point where the consumer can’t keep up with minimum payments. If this has happened to you, don’t panic. Start by educating yourself on the options available to you. The options listed below, assume that you are facing a financial hardship and that you are struggling to make your credit card payments: Option 1: Consumer Credit Counseling:
Option 2: Debt Consolidation:
Option 3: Making Only Minimum Payments:
Option 4: Bankruptcy
Otpion 5: Debt Settlement/Negotiation
There is no one size fits all when it comes to getting out of debt.
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