Debt negotiation tips

July 19, 2010 by admin Leave a Comment

Debt negotiation

Ever increasing pressure of living a comfortable, luxurious and extravagant lifestyle lands us in debts to meet the expenses. These debts are types of loans that are creating problems in our day to day life. So, it becomes very essential that you should have a control over your debts. In this article you will come across some facts that will help you to manage your debts. Most of the people are facing problems because of their credit cards. If you are using numerous credit cards then you may face huge debts for your credit card bills but you can manage them by negotiating with your creditors.

Today everyone who is facing the problem of debts requires debt negotiation. The worst debt is the credit card debts because in this without knowing the interest rates and about the consequences you use your credit cards. Most of us are aware that anytime the interest rate of our credit card can be raised, even though knowing this fact we continuously use our credit to purchase something we desire. If you notice that your debts is too high and you will not be able to repay them then the best way is to discuss with a debt negotiation company and you should negotiate according to their terms and conditions. But the people who have never done negotiation in past can take help from the following tips.

1. Firstly, before your negotiation starts you should properly know about debts – how much you owe to your creditors and how much you are paying in terms of interest rates? It is recommended that you should speak honestly while negotiating. If you are not honest then remember that you creditors are observing you and may be you will not come out from debts anymore. If you have any queries then do ask them.

2. It is recommended that before you start negotiating you should possess a record about the amount you have spend and the amount that you have put on credit. You should also keep a record about the amount that you have already paid to your creditor.

3. Always remember that your credit card companies don’t want to negotiate with you for a reduction in their charges and fees because they want you to be in debt. Keeping you in debt is the way through which your credit card companies make money.

Filed Under: General Tagged With: Consequences, control, Credit Card Bills, Credit Card Debts, Credit Cards, Creditor, Creditors, Debt Negotiation Company, Extravagant Lifestyle, Face, Firstly, Interest Rate, Interest Rates, Loans, Negotiation Tips, Queries

Debt settlement and consolidation

July 16, 2010 by admin Leave a Comment

Debt settlement

One of the biggest problems nowadays is Debt. For some people repaying their debts is like a big burden on their standard life, on the other hand if your expenses are not well planned and if you are not mentally prepared to repay your debts then it could be a burden for you. If anyhow you are unable to pay back your debts and find that you are trapped with all your debts then it is better for you to go for any debt reduction solutions. These solutions can be used for the purpose of making your financial status perfect and better. There are numerous reduction solutions available but it is recommended that you should perfectly select the one that suits you and satisfies your requirements. Mainly there are three reduction solutions that are accepted by most of the people nowadays and they are Debt Consolidation, and Debt Settlement or Negotiation.
1. Debt Consolidation: One of the best solutions nowadays that you can opt in order to reduce your debts is Debt Consolidation. This solution is the outstanding substitute of bankruptcy and with the help of this reduction solution you will be able to decrease and handle your debts easily. On the other hand they also offer you guidance to manage your Credit Card debts. In fact this reduction solution helps you to plan your finances and also help you to opt a debt consolidation loan to repay almost all your debts. To repay your debts of Credit Cards they offer some special kind of debt consolidation. The loan that you will take as debt consolidation loan possess low interest rate and in this process you only have to repay all your debts through one monthly payment. The best part of this loan is that with it you can repay any kind of debts whether it is secured or unsecured debts.

2. Debt Settlement and Negotiation: Another type of debt consolidation is Debt settlement. With the help of this reduction solution you will be able to reduce your interest rates up to 40% to 60%. This procedure is helpful because most of the creditors desire to get back their loan amount so they don’t care that if the interest rate is lowered then in return they will be getting back their loan amount. The creditor believes that lowering down the interest rate will be helpful rather than a person announcing that he is bankrupt. This reduction solution is the perfect option for the people who work hard to repay their debt amount.

These were some of the debt reduction solutions that you can utilize to eradicate debts that is disturbing your way of living. These solutions will not eliminate all your debts but yes they will help you a lot in order to decrease your debts. These reduction solutions will definitely help you to manage your finances as well as to keep control over your debts.

Filed Under: General Tagged With: Bankruptcy, Bankruptcy Help, Best Solutions, Consolidation Debt, Credit Card Debts, Credit Cards, Creditors, Debt Consolidation Loan, Debt Help, Debt Loan, Debt Negotiation, Debt Reduction Solutions, Debt Settlement, Debt Solution, Debt Solutions, Desire, Finances, Guidance, Interest Rate, Interest Rates, People, Reduce Debt, Reduction Solution, Suits, Unsecured Debt, Unsecured Debts

Debt Solutions

July 16, 2010 by admin Leave a Comment

Debt Solutions

Loans are certainly made many comforts and luxuries within your reach but if you have taken any loan and getting frustrated in repaying your debts then to help you in such situation there are some kind of debt solutions available. However, these solutions will only help you to eradicate some measures of your debts, but these solutions will definitely help you to overcome from the huge burden of your debt. Some of the best and reliable debt solutions available for you are bankruptcy, debt settlement, and debt consolidation. These debt solutions are the most effective solutions measures that you can opt to lessen the burden of your debt. Moreover, it is recommended that you should select only one solution measure at a time.
1. Debt Settlement: If you desire to opt for the most effective solution for your debt then you should go for debt settlement. Debt settlement is the substitute solution of bankruptcy. In the procedure of debt settlement the lender usually negotiates with the borrower to decrease the repayable money up to 40% to 60%. With the help of this option you will be stopped paying to creditors whilst you can save your huge amount of money. Once you complete repaying your loan amount up to 50 % with help of any reputed debt solution company you will be able to negotiate with your creditors. Some of the people nowadays in sake of saving money approach their lender directly in order to settle their debts but it is recommended that you should take help of some reputed company that can help you in your debt settlement.
2. Debt Consolidation: One of the most important and appreciated debt solutions accepted nowadays in order to low down the interest rate of loan is Debt Consolidation. In this procedure your interest rate is lowered down and also your late fees if you have any will be waived off. Debt consolidation also possess numerous benefits like if you go for debt consolidation then the company of debt consolidation will combine all your multiple bills into one like unsecured debts, credit card debts, medical bills, and any other debts. According to this solution you will only have to make single monthly payment to the company of the debt consolidation and they will make payment to your lender on behalf of you.

3. Bankruptcy: If all the other options fail and not suit you then you should file a bankruptcy. One of the most beneficial and the simplest form to eradicate or to decrease your debts is to file bankruptcy. When the doors of all other options are closed for you then it is better to declare yourself bankrupt. In general it is the procedure in which a company or a person announces that they are bankrupt and they will not be able to repay their debts. According to the protection of bankruptcy court if a person declares that he or she is bankrupt then they doesn’t have to repay their debts anymore.

Though you can select your own debt solution by yourself but it is suggested that you should take help of some financial professional.

Filed Under: General Tagged With: Amount Of Money, Bankruptcy, Consolidation Company, Consolidation Debt, Creditors, Debt Consolidation, Debt Settlement, Debt Solution, Debt Solutions, Debts, Effective Solution, Effective Solutions, Interest Rate, Late Fees, Loan Consolidation, Luxuries, Measures, Money Approach, Reliable Solutions, Sake, Saving Money, Solution Company

Debt counseling-the wise way to get rid of debt trap

July 16, 2010 by admin Leave a Comment

Debt counseling

There are a lot of people who are under huge burden of large debts. Due to these worries, they are not able to lead a normal life which affects their performance at the job or profession and also has an adverse impact on their family life. Debt counseling is the mechanism through which a person can get rid of his mounting debts in a convenient manner. Debt counseling is provided by the experienced and well qualified persons in the field of finance and debt management. These expert advisers tell you a number of preventive measures to stay away from debt trap by planning their expenditure in a prudent manner. Apart from this, these experts also devise various means to lessen your burden of debt repayment through effective debt management plans. To get proper help and assistance, you should provide all the relevant particulars about your existing debts to the debt counselor. You should not conceal any vital fact from your debt counselor in your own interest.

Through debt counseling, your advisers negotiate with the creditors on your behalf for reduction in rate of interest or for a relaxation in the original repayment period or in some cases, a portion of debt can also be waived off altogether. Debt counseling guides a person having debts to repay all his debts by loan consolidation or mortgage loans. In some cases, credit cards companies agree to accept lesser amount of monthly repayment as per terms of agreement under a debt management plan to provide a substantial relief to the debtor. Most of the debt management companies claim to get the 40 to 50 per cent concessions for their clients in respect of credit card dues but in reality, 10 to 20 per cent discounts in total amount have been seen to be given by the creditor companies. Before engaging the services of a debt counselor, you should thoroughly enquire into the reality of his claims about various concessions and facilities.

While every person wants to get rid of his debts as early as possible, there are a few precautions to follow before you choose a person or agency for debt counseling. First of all, you should collect the relevant information about various debt counseling companies to assess their capabilities to help you in settling your debts in a convenient manner. For this purpose, you may collect feedback on these companies from their previous clients about their past performance. You should not get attracted to a company which charges nominal fees as lesser fee does not necessarily imply better services. Debt counseling also helps you to get the rate of interest reduced in certain cases. With a lesser rate of interest, your monthly repayment obligation is reduced and you can repay a debt earlier than compared to the original repayment period. This results in a lot of mental peace for you besides saving a substantial amount of money for you.

In the year 2005, with the introduction of some major changes in the laws related to the bankruptcy in the United States, debt counseling was made mandatory in the cases where the debtors chose to file a petition for bankruptcy. As per the provisions of these rules, a person has to obtain the services of a non-profit credit counseling company during the 180 days period prior to the filing for bankruptcy. One of the various counseling sessions with the engaged company may be conducted over telephone or online through the internet. There are various websites where you can get useful information about different aspects of debt counseling along with the necessary particulars about the companies providing the services of debt counseling. You should be cautious from various newly emerging credit counseling companies who allure customers and then dupe them by misappropriating their money and not depositing it with the creditors. Debt counseling companies are often funded by the creditors in the form of 5 to 10 percent of collections paid to them in the form of Fair Share. Some credit counseling companies advise their clients not to deposit any money directly with the creditors and when they receive the first repayment installment, they retain it with them as their fees for debt counseling. This unfair practice adversely affects the financial interests of the person who is already under huge burden of debt.

Whenever a person is under the huge burden of several debts, he should immediately contact a renowned and experienced debt counselor as any delay in going for debt counseling shall only make his financial condition worse. A timely help from a capable debt counselor may result in lot of convenience in repaying your dues but you should follow the instructions and advice of your debt counselor in a regular and disciplined manner. A competent debt counselor is your greatest friend and well wisher to save you from unnecessary monetary loss and severe mental stress resulting from huge burden of debts. A debt counseling agency or person chosen with a little care, caution and prudence can save you a lot of trouble and financial loss at the later stages.

Debt counseling saves you from a lot of stress and mental worries. When you have a large number of creditors you have to talk to them either personally or over telephone at least once in a month. With the help of debt counseling you have to deal with just a single person. You have to pay a consolidated amount to the agency per month and it shall take care of all your monthly repayments as and when these fall due. Debt counseling also educates you about various ways to manage your finances in a better and planned manner to avoid debts as far as possible. This is the preventive role of debt counseling agencies. Many debt counseling agencies advice to go for debt consolidation for repayment of all your dues but you should properly assess all the pros and cons of a loan consolidation as you might have to repay the amount over a longer period than the original one in case of separate debts. Role of debt counselor in these cases is of advisory nature only and you are under no obligation to follow his advice. You should discuss all the aspects related to your indebtedness with the debt counseling agency in an open and candid manner.

Before engaging a debt counselor for management of your debts you should properly ascertain whether he is capable of helping you in a significant manner. You should verify the past record of credit counseling agency from a number of reliable sources. Debt counseling not only helps you to repay your debts with convenience in a planned manner, but it also educates you to keep your expenditure below your income level so that you are not a victim to debt trap. In a few cases where the debt burden is so high that it is not possible for the indebted person to repay his dues with his present earnings, debt counselor may advice you to go for bankruptcy proceedings. Mortgage loan is also another option to clear your various debts of smaller amounts but you should exercise this option after much thought and with a great caution. A few debt counseling agencies mislead the innocent clients to fall in the trap of debt consolidation which might make their financial status worse than earlier. You should be cautious from these selfish persons who watch their own interest at the cost of their clients.

One of the most important tips given during the debt counseling is to classify all your debts in high priority and low priority sections and plan your repayments in the order of priority. Secondly, you should always aim to spend less than what you earn so that your financial balance is not disturbed and you are not a victim to the debt trap. Besides this, you should also make constant and vigorous efforts to augment your sources of income to be able to repay your debts in a shorter period. Debt counselors help you to plan your monthly budgets in a useful manner. Debt counseling also provides required help in the direction of improving your credit rating. If you follow the debt management plan in a disciplined way and meet your repayment obligations in time, you are sure to improve your credit scores in a significant manner. You should always choose the debt counseling company which has a sound standing and good reputation in the market. While an experienced and trusted debt counselor may lessen your worries of debt repayments, an unprofessional debt counselor may make the situation even worse for you.

You should also make a periodical review of all your existing debts and also keep a close watch on the prevailing market conditions to explore the possibilities of a loan with cheaper interest rate which could be utilized to repay the existing higher interest bearing debts. Debt counselors suggest both types of loans- secured debts and unsecured debts. In the case of secured debt, you have to mortgage your immovable property with the creditors in the form of collateral security whereas in the case of unsecured debts, no collateral security is asked for. In case of an unsecured debt, you can get limited amount of loan and generally these loans carry a very high rate of interest. If you do not have sufficient disposable monthly income for debt repayment, you might not be able to repay your debts easily and coupled with the burden of higher rate of interest, such types of loans may thrust you deeper in the trouble.

With the increasing passion for all the luxuries, a person sometimes incurs some expenses without caring for his resources. This results in his indebtedness as more and more financial institutions allure the consumers to avail loans for several non productive purposes also. The increasing tendency of buy now pay later has left thousands of people in every city highly indebted. To come out of this debt trap, one has to seek the help of debt counseling. Debt counseling equips you in a better manner to manage your finance and repay your debts at attractive terms and conditions with much ease and convenience. On the one hand, a debt counselor educates you to spend and save judiciously to avoid debts and on the other hand, it also helps you to come out of the debt trap if you have already fallen into it. Thus, a double advantage of debt counseling helps you to manage your personal financial status in a better and well organized manner.

There are a number of debt counselors in each city who provide various types of services related to debt counseling. Of these, there are a few who insist upon raising a debt consolidation loan or debt consolidation mortgage loan. You should be aware of such type of agencies as these are watching their own interest in the disguise of helping you to clear your debts easily. There are a few genuine individual debt counselors and debt counseling agencies which strictly follow the rules stipulated by the Financial Services Authority in this regard and provide you proper guidance and help in a fair way. For effective management of your debts, you should also improve your spending habits to save extra amount of money every month to repay your debts early which will help you to save a lot of money in the form of interest and other costs, besides giving you much desired mental relief of clearing all your debts in time.

Filed Under: General Tagged With: Adverse Impact, Concessions, Credit Cards Companies, Creditor, Debt Counselor, Debt Management Companies, Debt Management Plan, Debt Repayment, Debt Trap, Debtor, Expert Advisers, Life Debt, Loan Consolidation, Mortgage Loans, Preventive Measures, Prudent Manner, Rate Of Interest, Repayment Period, Substantial Relief, Vital Fact

Debt Management- the effective Solution to Debt Problems

July 16, 2010 by admin 1 Comment

In this modern age, needs for comforts and luxuries have increased greater than ever. Every person wants to own a beautiful house, a luxury car and to lead a lavish life- style. To satisfy these desires, most of the people prefer to raise loans which are to be repaid over the years along with the interest amount. The repayment of loan is projected on the future income to be generated through the employment or business. Sometimes, due to a number of unforeseen circumstances, you are not able to repay your debts in time and the burden of interest coupled with the principal amount keeps on mounting which gives you a lot of mental stress, besides adversely affecting your credit in the market and society. These days, majority of the Americans are facing the problem of high debts. To overcome this problem, concept of debt management was introduced a few years ago.

Debt management denotes the engagement of a designated agency to counsel and help you to manage and repay your debts in the most convenient manner within the shortest possible period with minimum additional expenses or charges. For the persons facing the acute problem of high debt burden, this solution is like a boon. With the significant changes in the law of the United States regarding the bankruptcy since the year 2005, agencies engaged in debt management services have gathered all the more importance than earlier. There are a few non-profit earning debt management companies which provide related services for a nominal fee which is affordable for all. There are also some profit oriented professional debt management companies which provide multiple services and charge a considerable amount as their fees in the form of certain percentage of the debt amount to be repaid.

When ever you plan to get rid of your worries of high debts, you should thoroughly search for a trusted and renowned agency engaged in debt management services as there are several companies in this field which make high claims and false promises but ultimately prove to increase your financial troubles instead of providing you some relief. After carefully selecting a competent agency, you should discuss your problems in detail with the representatives of the company. In your best interests, you should not conceal any fact and should present a true and correct picture of current financial status along with the plans for future for settlement of debts. The debt management agency or company will first of all prepare a comprehensive list of all your debts and then discuss with you the probable course of action for early and effective solution for your debt burden problems.

Few of the measures adopted by the debt management companies to reduce your burden of debt are as under:

Organize meetings with your creditors and discuss about lowering down the rate of interest or allowing moratorium of interest during the repayment period. This can substantially reduce your debt burden.
Make a detailed study of your income from all sources and also the expenditure over mortgages, rent, food and utilities to arrive at the net amount which shall be available for repayment of dues on monthly basis.
Work out the amount payable monthly dues in respect of your existing debts and collect it from you for onward payment to the creditors on due date.
Discuss with the creditors regarding any possible relaxation or discounts in case of lump sump payment as one time settlement.
Advise you to plan the repayment of your debts in the order of priority.
Exploring the possibility of transferring your existing liability at lower rate of interest or with a longer repayment period to reduce the burden of monthly payments of existing debts.
Arranging finance for repayment of all the debts immediately thus, clubbing all your financial liabilities to one source.
To conduct educational programs for the persons facing difficulties with debt traps.
To refer your case to some other appropriate forum in case the agency is not able to handle it or advice you to apply for bankruptcy if in their opinion, the debt is too large to be paid by you in the given number of years with your limited resources.
Whereas these debt management companies advise you to spend less than you earn, the services of these companies can not be obtained in the case of secured loans like a car loan or housing loan. The debt management agencies can be engaged to find effective solution for the problems arising through accumulated burden of credit card repayments, personal loans, stores card loans. Overdraft facilities, etc. if in the opinion of the agency, they are not able to solve your debt problems with the solutions they have, they may refer your case to some other effective forum or advise you to go for bankruptcy proceedings. It is important to understand that taking the services of a debt management company may temporarily hamper your credit ratings and you may be ineligible to raise a loan for a specific duration. Further, if your all debt obligations are less than US $ 10000, you are not entitled for the services of a third party agency for managing your debts.

With the United States Bankruptcy laws coming under vital changes in October, 2005 many indebted people now prefer to undergo long term debt management plans. Before deciding about engagement of any particular debt management agency, you should ensure that the same is properly registered with the Better Business Bureau and it does not charge any exorbitantly high fees for their services to devise a debt management plan for you. While non- profit companies charge a negligible sum for their services, profit making debt management companies charge a certain percentage of total debt amounts to be repaid as their fees for services provided by them. If you have a large portfolio of debts, this fee can be substantially higher. You should stick to the schedule of repayment on monthly basis as it shall improve your credit rating and will help you to get the relief from debt burden in a speedy manner.

National Foundation for Debt Management has been set up to provide assistance to the persons seeking help in the chronic cases of huge debt burdens. This foundation runs regular seminars and educational programs for the benefit of people in general. Proper guidance and advice is also provided at this foundation by the experts to face the problem of heavy debt burden in an effective manner. One can also get useful help online through the website of this foundation. This is a non- profit group organization which has been formed on a membership basis. It offers on course membership for debt help. Apart from this, there is an additional facility of Right Track personalized debt help programs to help highly indebted people. So far, more than 50,000 people have already benefitted through this program. NFDM also organizes free of cost chartered course in a personalized way for its members to impart education about proper and effective debt management techniques.

While a few management companies aim at reducing your burden of debt only, there are a few others which besides helping you to repay your debt also educate you about the various aspects of debt management in an effective manner. These programs also guide you to get the loans at best possible rate of interest to reduce the burden of repayment. A debt management company negotiates on your behalf with the creditors to get the amount of interest reduced or for some other concessions which can make it easy for you to repay your debts in the most convenient way. While selecting a debt management company, you should select one which is well established and has a proven track record. You should also compare the charges proposed by different companies to select the one with most reasonable charges which are also easily affordable for you.

With the increasing trend of raising multiple loans at a time and due to some recessionary economic trends, incidences of high indebtedness have increased in the recent times. Simultaneously, there has been a sudden spurt in the number of companies which are coming up almost another day and claiming to get you rid of your debts in quick time. Before falling prey to these unrealistic claims you should enquire about the background of the company. As debt management is not a simple task and it takes a few years for a company to get itself established in the market, you should select a debt management company which has sufficient experience in this field. By paying regular installments of your debt as per the terms of agreement decided by the debt management company on your behalf with your creditors, not only you lessen the burden of debt gradually, but also improve your credit scores in an effective way.

Another important aspect of proper debt management is to keep a periodical watch over your current liabilities and review the status regularly. If you keep a close watch over the market conditions and other offers for loan at attractive rate of interest you can avail these cheaper loans to square off your existing debts at higher interest rates and this can save a lot of money for you.

Regular savings are also a part of an effective debt management program. If you can set aside a small portion of your earnings every month, you can plan to buy your desired car or house from your own sources or you can thus minimize the amount of loan required. If you have got moderate financial liabilities, these can be effectively met with a proper planning and regular repayment on due dates. Further, in case of credit cards, you should always prefer to entire amount due on monthly basis as paying the minimum amount due sounds lucrative; it becomes costlier in a long run and can lead you into severe financial stress over a period. Meeting your financial commitments on the due dates is the key to effective debt management.

While some debt management programs are designed to reduce your debt burden through negotiations, alternative loan facilities or arranging for some concessions in the rate of interest etc., there are few specialized programs which provide education about various methods of debt management and also tell you about various ways to remain out of the debt trap as preventive measures. You can find a number of websites regarding various debt management companies but you should carefully choose one according to your need and suitability. Further, you should also take into account the fee to be charged by these companies as a company with high fee structure may worsen your financial condition further. You can find a number of advertisements in the local newspapers and financial magazines and journals about various debt management companies. You should verify the credentials of the company you want to engage, from some reliable sources.

With proper education and guidance about various debt management programs, you can organize your debts in a better and more effective manner. With a little prudence and strict financial discipline along with proper planning, you can be sure to clear your debts easily and speedily with the minimum extra cost and the least stress and worry. An effective debt management plan can take care of your worries related to burden of debt in a proper and beneficial manner. You have to just select the most appropriate debt management company having a professional approach and adequate experience and expertise in this field.

Filed Under: General Tagged With: Bankruptcy, Boon, Debt Burden, Debt Management Companies, Debt Management Services, Debt Problems, Debts, Desires, Effective Solution, Lavish Life, Life Style, Loans, Luxuries, Luxury Car, Mental Stress, Multiple Services, Professional Debt Management, Unforeseen Circumstances, Worries

Debt relief options & programs

July 16, 2010 by admin Leave a Comment

Debt relief

debt relief Debt refers to the monetary obligation that a person owes to the other. It generally connotes the payment of a loan that the debtor owes. Generally when a person lends the other, money or any kind of service that is to be paid back in the monetary terms in a certain period of time; he also levies a certain amount of interest on the same. At times because of unforeseen losses or difficult times, the debtor may find himself or herself unable to pay back the amount. This is where debt relief comes in.

Before a debt is lent, it is in imperative that both the debtor and the creditor should agree on the schedule and modalities of the payment. This payment is usually denoted in terms of currency, but at times it can also be denominated in terms of goods and services. Payments can be made either in terms of equated monthly installments or as lump sum amount paid at the end of the term. Generally speaking, it is the first option which is the more preferred way of payment because it does not hurt the pocket to pay a little of the amount every month.

Debt relief is connoted by the partial or total forgiveness of the debt taken. It also includes either slowing down or completely stopping of the interest levied on such debts.

Generally the term debt relief relates to the domestic debts taken, but in today’s scenario it can also include the agricultural or the corporate debts taken. The need for debt relief essentially arises when the debtor is unable to pay back his loan on account of his poor financial condition. In such case the debtor faces the added burden of ever-increasing interest that is levied on the capital.

Debt relief and it’s various options are accounted in history as well, because lending and paying back have been a part and parcel of every society. In fact, no civilization can thrive if people stop lending and paying back. In recent times the personal credit and its payback has become an increasing problem. People are becoming more and more materialistic these days, and because of the easy credit and the financing options that are available to them, they do not wink an eyelid before going in for various kinds of loan. Problem arises when they are unable to pay back these debts for want of money. Things can also get worsened because of certain unforeseen calamities. But since it is the right of the creditor to get back the money lent, in the due course of time, he starts levying revised interest rates and late fees charges, thus aggravating the condition of the debtor further. It pays to work out a debt relief option for such debtor, instead of spending sleepless nights and getting jittery.

Apart from the personal loans, debts can be taken for other purposes as well. A farmer can take a loan for farming, an industrialist can take loan for running his company, a person can take a loan to buy cars, houses , for education; in fact anything can be purchased either on credit or by taking loans. Problems in debt repayment have compounded with the advent of credit cards. A consumer may unwillingly fall into the trap of incessant buying without realizing how much his or her total outstanding rises up to.

Debt repayment problems can get compounded in times of recession when people, after losing their jobs find it increasingly difficult to pay back loans. Debt relief programs are the order of the day. One can not turn blind eye and a deaf ear to the problem faced by thousands of people around. Though it may make dent in the creditors’ profits, but resorting to a debt relief option may at least ensure a certain part of recovery for the creditor, if not the complete amount.

Unpaid debts can become a source of great anxiety and stress for the individuals as well as for the family. There have been cases when the entire families have committed suicide because of such cases. Such an option turns out to be a win-win situation for both the debtor and the creditor. The debtor on one hand, can get rid of the fear of his ever accumulating outstanding on his debt, and the creditor on the other hand, can do away with the waste of his precious time and energy in pursuing a person, who he also knows would never be able to pay back his debt.

To avoid such a situation a debt relief program is worked out. Generally these programs are worked with the help of credit counselors. More often than not, such a program helps reduce the financial obligation of the debtor by a certain percentage. Some times it can be even reduced to half of the original outstanding. There are very few cases when the entire amount has been forgiven by the creditor, but working out such a formulae is actually a very difficult proposition.

When the debt can not be reduced or forgiven, things can be worked out with the help of another method called debt consolidation.

There are various ways in which the debt relief options can be worked out. Some of them are as following-

* Debt settlement- This is a kind of an option wherein the debtor is able to settle his dues quickly as compared to the rest of the methods. The method involves appointing a debt settlement lawyer who negotiates with the firms wherein the debtor owes money. It pays to appoint a debt settlement lawyer because it is not necessary that the debtor is armed with all the information and the tactics necessary to negotiate for the debt settlement, and since a specialized lawyer knows the tricks of the trade, he can give his clients a much better bargain that they actually can get, in case they decide to do the same themselves. That apart, a debt settlement lawyer also ensures that the consumer rights of his client are not violated by the money lending companies. Generally the clients are not aware of their rights as consumers in this regards.

After negotiating with the firm on the debtor’s behalf, the lawyer then works out a plan for his client, wherein he can pay the rest of the outstanding amount comfortably. When the reworked amount is paid to the last penny, the debtor’s credit report is wiped clean.

Worldwide this is most preferred form of debt relief because it does not require any collateral to be assigned for the outstanding, and hence is much hassle free than the rest of the debt relief options.

* Debt negotiations: This debt relief option entails reworking the interest rates and payment options. There are times when the debtors are not pay up their debts accounting to various reasons. In case they sit back and do not take any action, it will mean an increasing interest amount on the remaining outstanding. This is specially tried in the case of credit card payments. Therefore, if the debtor negotiates his debt, it can help both him and the company. For the purpose he can either do it himself or appoint an attorney.

Debt negotiations would include negotiations on the interest rates, late fees and the payment plans. In case the problem of paying up is a phenomenon for a short time, the debtor can negotiate with the companies himself. But in case the amount is big and things have to be worked out in a bigger way, it is advisable to seek help of an attorney. Apart from bringing relief to the debtor, a debt negotiation can also put an end to the series of letters and the reminders that a debtor gets for his repayment. In the times of crisis, these letters can be very depressing.

* Bankruptcy: Bankruptcy law provides relief to the debtors who are unable to pay back to their creditors by way of liquidating their assets. This can be either initiated by the debtor himself or by the credit giving company. In case of bankruptcy, all creditors are treated equally, that is, debts are not settled one by one. As and when the assets are liquidated, all the companies get an equal share in the pie. Though liquidating the assets may not help the debtor to get of all his outstanding, but it can give him relief to a large extent.

There are two types of bankruptcy proceedings that are initiated: either the assets are liquidated completely by the appointed trustee who then uses the collection received to pay back the companies, or in some cases trustees are appointed who in turn supervise the assets and help the debtor pay off his debts from the income received from such assets.

* Loan modification: Loan modification option is a mortgage option type, which ensures permanent adjustment to one or more terms of the creditors. This is especially popular when adjusting home loans. The process entails either the reduction of the interest rate, or reduction in the principal amount or at times both. This can also extend to the late fee that is levied on the debtor. At times the monthly payment is calculated keeping in mind the total monthly disposable income of the debtor.

* Short sale: This method is adhered to, when the proceeds of the sale of a debtors real estate fall short of the balance owed to the creditors. This generally happens when the debtor can no longer pays back the mortgage loan, and the creditors decide to sell off his assets to avoid steep bank loans. The debtor is usually left to pay back the remaining of the loan.

These inputs are to be kept in mind when a debtor decides to go in for appointing lawyer or a company to pursue his debt relief option with the creditors.

~ Reputation of the company: how fast and what kind of bargains can the company work out for you. It might not happen that a wrong decision in short listing a company for your needs, you may end up either paying up more than what you have had with another debt settlement company.

~ The fees charged by the company: it is also important to ensure that the company does not charge a fee so exorbitant that it actually becomes an added liability on to you.

~ Speed of getting things done: any delay in either negotiating or striking an agreement with the creditors may mean an ever accumulating interest for you. The company that you choose to represent you in such cases should be the one who is able to work around quickly in such matters.

~ Suiting your need: is not necessary that the debt negotiations program of all the companies suit your needs. Pick up the one which can cater to you best. In case the one who you have zeroed upon is unable to do so, ask them about one of their affiliates who can do the work for you.

~ Guarantee of debt elimination: whichever company you choose, ensure that it guarantees debt elimination in a specified period of time, or else it does not serve the purpose of doing away with your worries.

Search the web and you will come across numbers of such companies who give assurances of working out the best debt relief program for you. Do your homework and then choose.

Filed Under: General Tagged With: Added Burden, Capital Debt, Civilization, Creditor, Debt Relief Options, Debtor, Debts, Difficult Times, First Option, Installments, Levies, Losses, Lump Sum, Modalities, Monetary Terms, Payback, Period Of Time, Personal Credit, Term Debt, Total Forgiveness

Debt Relief Programs

July 16, 2010 by admin Leave a Comment

Debt Relief Programs

Large number of people in United States is facing the debt problem. These people are finding it difficult to deal with the trouble and burden of financial crisis in their life. With the rise in interest rates, not only in the mortgage sector but other financial sectors as well are finding it difficult to continue with their business. However, there are several debt relief programs in the market these days to help in such a crisis.

Especially if you have credit card late fees, or you have withdrawn money from the cash withdrawal limit of your card it will climb up in a compound manner as per the delay you make in the repayment. You need to find an immediate solution and debt relief programs can certainly help you in such circumstances. There are several options available now if you find yourself in financial trouble.

Negations in term of your debt, settlement by mutual agreement, arriving at a plan of repayment which is suitable to you, and consolidation of your overall debt are some of the measures you can undertake. Debt relief programs can be much more effective if you find the right company to take care of your financial problem and also arrive at the correct solution to resolve the situation.

While checking out on companies you need to do an in depth research as to whether a company has only one debt relief program or there are multiple choices. The company which has many choices will be the best for you as it can have a customized program to fulfill your need. Also you need to make sure the cost involved in hiring the services of such a company, the professional ones get paid a certain percentage from what they are able to save for you. This means that they will try to save you more to make an earning.

While making a choice between different companies offering various debts relief programs you need to see which is the most dependable one. Some companies do not have a firm standing and are short term operators in the area. You need to verify how long the Company has been doing business in the related field. Then only decide whether you can trust them with your financial aspects.

Filed Under: General Tagged With: Cash Withdrawal, Circumstances, Consolidation, Correct Solution, Credit Card, Debt Problem, Debt Relief Program, Debt Settlement, Debts, Different Companies, Financial Crisis, Financial Sectors, Financial Trouble, Interest Rates, Late Fees, Measures, Money Cash, Mortgage, Multiple Choices, Negations, People