Debt Settlement Programs

Posted on May 16, 2012 by smcmahon

More than likely, you’ve come across an advertisement for a debt settlement company offering debt settlement programs.  I’m sure you’ve heard ads asking questions like “Do you have over $10,000 in debt?” or “Are you over your head in debt?”  With so many debt relief options, it can be a challenge to understand what debt settlement is and what defines a good program that meets your financial needs.

Debt settlement is an option for people who need help reducing their debt and want to avoid bankruptcy. These programs do work but you need to do your homework before you enroll in a debt settlement program.  Make sure the company you select offers the product and services you need.

How Debt Settlement Programs Works

In debt settlement programs, you put money into a savings account each month in order to save enough to negotiate a settlement with your creditors. As settlement funds accumulate, negotiations will take place with the each of the enrolled accounts until all of your debts are resolved. Your accounts are settled and paid for less than the balance due.  A debt settlement program can help you reduce your debt faster than you ever would just by paying the minimum payment each month.

How to Choose Debt Settlement Programs

The credit card companies have lots of lawyers on their side and collectors can be overly assertive when collecting a debt. Most people do not know their rights when it comes to debt collections and possible harassment. There are laws to protect you. This is just one reason we suggest you select a plan that offers legal support and education as part of your debt settlement program.

You should also have the help of a personal debt assistant who will be your single point of contact throughout the duration of the program. One dedicated person who will know your personal situation and understand your needs.   This person will help, direct and provide legal assistance with the paperwork and issues that arise from debt collectors.

I can’t stress this enough, it’s important to have the professional service, support and education you need to be successful in a debt settlement program.  Also, make sure to confirm that your accounts will be correctly reported to the credit bureaus upon settlement so you can work to rebuild your financial stability.

Learn more about debt settlement programs by visiting www.debtreliefoptions.com.

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Debt Management Program

Posted on May 11, 2012 by smcmahon

Most people believe paying back your debt is the right thing to do, and the right Debt Management Program can help you do just that.  We agree, but we also understand that the challenges of life often make doing this harder than we expect.  If you are under or un-employed, if you’ve had a serious medical problem or have gone through any number of life’s difficulties, you may find it impossible to effectively reduce your debt.  One method that many people are using today is a Debt Management Program (DMP) also known as Consumer Credit Counseling.

What is a Debt Management Program?

A debt management program is where you work with a third party to arrange a repayment plan that is acceptable to both you and your creditors.  You make one monthly payment to the debt management company who then disburses payments to the creditors until all your debt has been repaid.

Regain Control of Finances

A debt management program allows you to regain control of your finances, and actually pay down the principal on your debt much faster than you would if making just the minimum payments each month. Most DMP companies will offer assistance as part of the program to help you create a solid financial future.  Qualified credit counselors are also available to offer advice on budgeting, investing, retirement and college planning along with many other financial topics.

Effect on Credit Score

Most lenders only look at your credit score and not at each entry on your credit report.  Therefore, participation in a debt management program will not likely have a dramatic effect on your overall credit.  Late payments can hurt your credit score, so you should consider enrolling in a debt management program as soon as possible when you find yourself in financial trouble.

It is important to note that not all debt can be included in a debt management program.  Secured debt such as car loans and mortgages cannot be included.  Government loans such as student loans or tax liens may also not be included.  If you are not able to meet the requirements of a debt management program there are still other options available.  So if you are suffering from financial hardships and are struggling to pay your bills, you can learn about all your debt relief options by visiting Debt Relief Options.

Posted in Dealing With Debt, Debt Management Program, Debt Management Relief Plan, Help With Debt Problems, Uncategorized | Tagged , , | Leave a comment

What is the Average US Credit Score?

Posted on May 1, 2012 by smcmahon

The average US credit score, also known as a FICO score, is based on many different factors, including payment history, outstanding debt, number of credit applications, type of credit you have and the length of your credit history.  Fair Isaac Company, which is what FICO stands for, is the company that created the formula that is used for determining a credit score.  Credit scores range from 300 to 850 with the average US credit score falling around 692.

Credit Score Statistics

Most lenders view any credit score over 720 as a good credit score, which means the average US credit score falls just below that level.  There are some interesting factors regarding credit scores, however.   Although credit scores range as high as 850, only about 13% of Americans have a score above 800 while only about 15% have scores below 550.  In fact, 58% of Americans have a credit score over 700, yet the average US credit score is about 8 points below that.

Reason for Lower Average

One of the reasons that the average US credit score is less than what is considered good is that those people with poor credit tend to lower the national average.  During the recent credit crisis, many people suffered financial hardships which may have affected their credit, and this lowered their credit scores and more than likely lowered the national average as well.

What Your Credit Score Means

Your credit score determines not only if you will qualify for credit, but will also determine the interest rate you will be offered for that credit.  The higher your credit score, the lower the interest you will qualify for which can save you a significant amount of money.  However, you do not have to have a perfect credit score to get lower interest rates.  In fact, with an average US credit score of 692 will probably qualify you for the same interest rates as a credit score as high as 720 or as low as 680.  However, a credit score below 620 will have a definite impact on the interest rates you are offered.  Research shows that a credit score of 620 may qualify you for an interest rate of 7.693%.  The interest rate jumps to 12.018% if your credit score is 619.

The biggest impact on your credit score is missed monthly payments and carrying too much debt based on your income.  By paying bills on time and keeping your debt to the minimum, you can keep your FICO score as high as the average US credit score or possibly even higher.

For more information about debt management programs, debt settlement programs, or debt relief options, please visit us at DebtReliefOptions.com.

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Three Stages of Dealing with Debt

Posted on April 25, 2012 by smcmahon

Dealing With Debt

1.  Crisis Stage

This stage is where you realize you are struggling to keep up with your growing debt, or when you start fearing the phone and mailbox due to collection calls and letters.  In some cases, the Crisis Stage is when it is most important to take action.  The Crisis Stage is often short-term (1 to 3 months).

2.  Coping Stage

People cope in different ways.  Some ignore the problem hoping it will resolve itself and go away.  Other people find something or someone to blame for their problems – like an ex-spouse, family member, or the government.  People who successfully cope with crisis usually find help and support from family, friends, and trusted advisors.  The Coping Stage is usually on-going.

3.  Comfort Stage

The Comfort Stage is when the person coping with a Crisis, has admitted there is a problem, found helpful coping resources, and is starting to improve the situation.  This stage is when the stress begins to end and the person is healing financially and emotionally.

The time-frame for finding comfort from your credit crisis depends on your ability to recognize that you are in a crisis, gather your strength, using resources and facing your credit problems head-on.

For more information about debt management programs or debt relief options, please visit us at DebtReliefOptions.com.

Posted in Credit Card Debt, Dealing With Debt, Help With Debt Problems | Tagged , | 1 Comment

Debt Collection Agencies

Posted on April 18, 2012 by smcmahon

If you are experiencing financial difficulties, you know what a nuisance debt collection agencies can be. It’s stressful enough to be burdened with too much debt without having the harassing phone calls of a collection agency. Fortunately, the Federal Trade Commission has given consumers certain rights when it comes to debt collection and we wanted to let you know some of them you to know what they are.

  • Collection agencies are NOT allowed to harass you.

Debt collection agencies are NOT allowed to use threats of harming you, they cannot use profanity, and they cannot publish a list of names of debtors.  Furthermore, they are NOT allowed to annoy you with repeated phone calls.

  • Debt collectors are NOT allowed to lie.

Debt collection agencies are NOT allowed to make false statements.  For example, they cannot claim to be a government representative or that they work for a credit reporting company if the same is not true.  Similarly, they cannot say that they have sent you legal forms if they have not. Also, they are not allowed to misrepresent the amount that you owe.

  • Other statements are prohibited as well.

Debt collection agencies are NOT allowed to tell you that you will be arrested if you do not pay your debt. They are not allowed to threaten that they will seize, garnish, attach or sell your property or wages, unless they are actually permitted by law to do so, and intend to.  In fact, they cannot threaten ANY legal action that they do not intend to take.  The laws in each state are different so do your research to see what your asset rights are.

  • They are NOT allowed to slander you.

Debt collection agencies are NOT permitted to give false information about you to anyone, including your employer or credit-reporting agencies.

  • Debt collectors may NOT engage in unfair practices.

Debt collection agencies may NOT collect any charge on top of the amount you owe, unless your contract, or state law, permits it. They are not allowed to deposit a post dated check early, and they cannot contact you by postcard.

It’s important to note that the original creditor DOES have the right to call you all they want so make sure you keep this in mind when reacting to calls.  It’s only when you’ve run late on your payments and the debt is sold off to debt collection agencies that these rules apply.

For more information, please visit Debt Relief Options today.

Nothing contained in this material is intended to be construed as legal advice. For further information on the Fair Debt Collecting Practices laws, please contact a local attorney or visit http://www.ftc.gov/bcp/edu/pubs/consumer/credit/cre27.pdf.

Posted in Dealing With Debt, Help With Debt Problems | Tagged , | 5 Comments

How to Create a Debt Management Relief Plan

Posted on April 12, 2012 by smcmahon

A debt management relief program may be your key to success for getting out of debt.  If you’re struggling to resolve your debt on your own, a debt management program can help you regain a stable financial life with a plan designed for your unique situation. Even though you will receive professional help, it is very important that you participate and stay involved during the process in order to complete the debt management program.

The steps below are guidelines to help you ease to the transition of a debt management relief program.

  1. Avoid loans whenever possible- Some people think it is best to take out one big loan to pay off all their debt. This is not the direction you should take, and will only dig you deeper in the hole. A debt management relief company will customize a program for your personal needs to avoid taking out such loans that often are filled with hidden fees and adjustable rates.
  2. Stick to a strict budget- The only way to keep from getting deeper in debt is to create a monthly budget and stick to it. We all know we need to spend less than you earn, but sometimes it seems impossible to put actions to words. Set a date on your schedule to create a monthly budget and then review your budget weekly to make sure you stay on course.  Do this right away and start saving money now.
  3. Have an emergency fund- We all know there are always those unanticipated expenses that arise. As you set up your budget, be sure to set some money aside each paycheck towards an emergency fund. This way when those unexpected repairs, replacements, or doctor visits arrive, you can pay with cash instead of relying on your credit card.  This may be hard to do unless you do item number 4.
  4. Don’t make unnecessary purchases-  It’s hard to put off buying things we like but the reality is that buying more than we can afford got most of us in the debt trouble we are today.  A sacrifice for the next couple years will give you a chance to start over and be free of the debt stress you have today.  Only buy what you absolutely must have to live and find ways to cut your costs every chance you can.  Stay strong and you will feel a lot better when you see your savings account progressively increase!

Take a look at the debt management program and debt settlement programs offered by Debt Relief Options today by visiting Debt Relief Options or calling (888) 216-2962.

Posted in Dealing With Debt, Debt Management Program, Debt Management Relief Plan, Debt Settlement Programs, Financial Management Advice, Help With Debt Problems | 8 Comments

Top 5 worst credit card mistakes – learn about credit card debt solutions

Posted on April 3, 2012 by smcmahon

Most debt in America is unsecured credit card debt and many people have over extended themselves using credit cards. This is the number one reason people sign up for a debt relief program. Consumers are offered credit without any knowledge on how to use them. This is how so many consumers get into more debt than they can handle and as we all know, racking up the debt is a lot easier than paying it off.

We’ve put together some of the most common mistakes people make when it comes to using credit cards. Avoid these mistakes and you will learn some good credit card debt solutions.

Here are the Top 5 worst credit card mistakes:

1. Not reading the fine print. This is where you’ll find when that “incredibly low” introductory rate expires, how much you’ll be charged for balance transfers, late fees, over the limit fees and other confusing information. Get out your reading glasses and read the fine print.

2. Making only minimum payments. When people pay just the minimum payment required, they’re making one of the most common—and most costly—credit mistakes. Paying only the bare minimum might be easiest short term, but it keeps you in debt longer and you will be paying a lot more on interest—often doubling and tripling the original amount of the debt.  See how much you’ll spend to pay off your debt making minimum payments using this online calculator:     Debt Calculator

3. Making late payments. This is where the creditors make a lot of their profits!  One payment that is 1 day late will incur a late fee. If you are 30 days late, this will also negatively impact your credit score. In addition, your interest rate may go up.

4. Overspending. Don’t be one of the people who have learned the hard way that credit cards aren’t free money. Think before you spend and make sure you are spending on things you need and watch out for spending on frivolous things that you will later regret.

5. Getting too many. Not only will multiple cards often hurt a consumer’s credit and be difficult to manage, but they can add up to more than you can actually afford to borrow. Use just one of your cards, and pay down the rest and spend only money you have.

Whether you are already in a debt relief program, looking for help with credit card debt or just trying to stay out of it, those that avoid these mistakes are more likely to succeed in their credit card debt solutions.

Posted in Credit Card Mistakes, Dealing With Debt | 15 Comments

How to Pay Off Debt with No Money in your Savings

Posted on March 26, 2012 by smcmahon

If you’re wondering how to pay off debt with no money in your savings, you will be pleased to know there are ways around that! It may not be the easiest course of action, but by using a process called the “debt snowball effect,” you can pay off debt on your own.

The biggest myth of learning how to pay off debt with no money in your savings is that you need to tackle the big debts with high interest rates first. In fact, you should actually pay off your smallest debts first to create momentum for your debt snowball effect.

To begin growing your savings for the debt snowball effect you’ll need to find creative ways to save money.  I’m sure you can think a few on your own but here are a few to get you thinking:

  1. Brown Bag Your Lunch- If you go out to lunch, these expenses can add up quickly even if you’re eating at fast food chains – not to mention the health and weight problems that go along with this.
  2. Cancel unnecessary bills- Call your cable company and see if there are better deals available, or cancel your subscription on any premium channels. Also, if you still have a land line phone, you should think about canceling it if you have a cell phone.
  3. Have a garage sale- Gather the clothes that you haven’t worn in over 6 months and sell them! You could also sell other items in your house that you don’t use anymore. Remember, one man’s trash is another man’s treasure!
  4. Carpool when you can- Find a work buddy you can carpool with! Gas prices do not seem to be drastically declining in the near future, so take advantage of carpooling.
  5. Round up your change- You would be surprised at how much money you can save up by bringing back the piggy bank.

Follow these steps to pay off your debt using the debt snowball effect:

  1. List all your debts in order from smallest payoff to largest. Don’t even look at interest rates unless two debts have a similar payoff. When this happens, tackle the one with the higher interest rate first.
  2. Focus on one thing at a time. Stop making more than minimum payments on every debt except for the first one on your list. Place all your efforts into paying off this small debt so you can quickly check it off your list and move on to the next debt.
  3. Check your progress. By starting with the small debts, you will be able to see your progress much easier. This is a huge motivational tool to help you stick with it until you reach complete financial freedom!

If this process seems beyond what you can handle today and you want to get out of debt faster, you should learn more about a debt settlement program that will help you get out of debt even faster than you could ever hope to accomplish by yourself.

Posted in Dealing With Debt, Uncategorized | Tagged | 1 Comment

How Much Does Filing Bankruptcy Cost?

Posted on March 16, 2012 by smcmahon

How much does filing bankruptcy cost? To answer this question, you first have to define what kind of bankruptcy you are filing. Personal bankruptcy is filed as Chapter 7 bankruptcy. If you do not qualify for Chapter 7 bankruptcy, you may need to file Chapter 13 bankruptcy. Here’s a look at what you can expect a personal bankruptcy program to cost.

Filing Fee

First, there are the bankruptcy filing fees run about $299 for Chapter 7 bankruptcy. This is a flat fee that is established by the federal government so it is the same no matter where you live. Typically, payment arrangements can be made on this fee.

Attorney Fees

Attorney fees will range anywhere from $700-$2,000. Obviously, you’re filing for bankruptcy because you in debt, so many attorneys offer a payment program to make these fees manageable.

Now let’s talk about the other “costs” besides money. According to consumer affairs, here are a few other costs you should consider.

  • You will lose all your credit cards (unless you pay them off before filing.)
  • You may also have to sell some possessions.
  • Any time you apply for a job, an apartment, or credit you may be asked if you ever filed for bankruptcy.
  • A recent bankruptcy makes it nearly impossible to get a mortgage (although you may be able to do so within approximately five years).
  • A bankruptcy stays on your credit report for up to 10 years, which can make it difficult to acquire credit, buy a home or car, get life insurance, or sometimes get a job.
  • Not all debts may be “discharged” in a bankruptcy. Student loans and back taxes (within 3 years) are prime examples of debts that will not be discharged.
  • If you declare bankruptcy, your name will be in court records and may appear in the newspaper.
  • You will have to explain to a judge or trustee how you got into a financial mess and this can be an embarrassing moment for you.
  • It may be a long time before you are able to get credit cards again.

So, you definitely want to look at all of you options before filing bankruptcy. For some people it may be the only choice  but for most people, there are other debt reduction programs available that will have less effect on your credit and allow you to keep your assets and start over again.

Posted in Bankruptcy Programs | Tagged | 6 Comments

Consumer Counselor: Credit – How to Choose the Right One for You

Posted on February 27, 2012 by admin
Consumer Counselor Credit

Consumer Counselor Credit

It’s time to stop letting debt control your life—take control of your finances so you can live your life again. If you are living paycheck to paycheck and can’t seem to stick to a budget to get yourself out of debt, consumer counselor credit services may be right for you. Consumer Counselor Credit service (also known as Debt Management) work with your creditors to get your debt paid off sooner than you would if you just made minimum payments each month.

Here are some tips for choosing the right consumer counselor credit service for you:

Seek Free Information

A reputable consumer counselor credit service will offer you free information about getting out of debt before they ask for your personal information. Stay clear of any organization that gets straight to business without offering you something of value first.  Most good debt management companies are non-profits and will not charge much in fees.

Explore Your Debt Relief Options

A debt management program may be best for your situation while debts of over $10,000 require a more direct debt settlement program. Then, you may be interested in a DIY program, or bankruptcy may be the last resort you find yourself facing. A consumer credit counseling agency should provide you with multiple options like these to customize your path to debt relief.

Find Something Affordable

While there may be some fees associated with getting out of debt, consumer counselor credit agencies should charge an affordable rate. Contact the company you want to work with to find out their rates before you make your final decision.

Request Professional Help

You want a team of experienced people to help you get out of debt. If your situation calls for it, look for a program, such as debt settlement, that provides you with help from a lawyer. This ensures that your rights are given top priority and that you complete the process of debt relief with your credit intact.

Take a look at the debt management program and debt settlement programs offered by Debt Relief Options today by visiting Debt Relief Options or calling (888) 216-2962.

Posted in Consumer Counselor Credit | Tagged | 1 Comment