Debt consolidation lead

Love them or hate them, Debt Settlement Companies have now pushed their way into the mainstream. This has of course caught the attention of the powers that be, and now there is a rush to regulate these programs. But what are these programs and what do they actually do for consumers? Are they the White Knights riding in to rescue the poor downtrodden consumer, as their commercials suggest? Or, are they they evil, modern day carpet baggers that the regulators claim are robbing consumers blind while making their financial situations worse?

For purposes of this Article, when I talk about Debt Settlement Companies, I am going to be specifically talking about 98% of the Debt Settlement Programs out there. Of course there are always exceptions to the rule and there are a few programs that actually do things very differently and focus on the consumers needs and circumstances.

Here is the typical sales pitch that you will hear from a debt settlement salesman hoping to sign you up into their program. It is your Lucky day Mr. Jones, we have a great solution to your financial troubles. Let me outline the benefits of becoming a client of ours.

1. We will negotiate with your creditors and cut your debt in half.

2. We will give you low, easy monthly payments that you can afford.

3. We will contact your creditors and tell them to stop contacting you.

That sounds like an answer to your prayers. Well not so fast. That is the sales pitch. Let me draw upon a few years of experience helping consumers out of tough financial situations to interpret what the salesman actually means.

1. We will automatically siphon money out of your account every month to cover our enormous fee (usually 15% of your debt).

2. If you are still sending us money after our fee is collected, we will start to set it aside to settle your Debts.

3. Your creditors will not get any money until after we get our fee (for doing what I am still not clear).

4. By making these low payments it will take years before you have enough money to settle the debt and you will likely be sued before you get there.

5. When we send these letters to have the creditors stop calling you it will really increase your chances of getting sued.

6. I only need to fool you for a few months because we will get our entire fee upfront.

These Debt Settlement Companies operate on volume and it is all about sales. In fact sometimes up to 80% of your fee is actually going to the person or group that sold you into the program, not to perform this excellent service that you are led to believe you are receiving.

The concept of Debt Settlement can make sense in certain situations but it is imperative that you educate yourself on the financial strategy of Debt Settlement before contacting a Debt Settlement Company for a free Consultation (Sales Pitch). Most of them earn their money when they sell you into the program not when they solve your problem. If that isn’t a huge red flag, I don’t know what is.

By: Damon Day

So, you’re in over your head and you’re considering a route known as debt settlement (debt negotiation), whereby your creditors will agree to accept less than the full balance owed on your accounts. You’ve probably heard or read about many different opinions relating to debt settlement and you’re not sure if this is the way you really want to go. You’re probably also questioning all that you’ve heard and are likely confused and unsure of what’s fact and what’s actually fiction. So, let’s attempt to clarify the process of debt settlement by starting with the “bad.”

Obviously, your creditors will not accept less than what you owe them without a little pain on your part. Unless your accounts are already delinquent, don’t even attempt to work out a settlement agreement with even one of your creditors because it simply won’t happen. Period. Unfortunately, your accounts must be at a certain stage of delinquency prior to negotiating a settlement. If you’d like to attempt to work something out while your accounts are current, or even 30-60 days delinquent, I urge you to do so because at the very least you’ll find out the truth and realize the end result won’t be pretty. So, yes this is one of the ugly components of debt settlement. Your accounts must go delinquent, and subsequently, your credit score will be reduced for a few months.

Perhaps you’ve also heard that you may have a tax liability as a result of debt settlement. True? Maybe. You see, creditors are required by the IRS to report all canceled debt over the amount of $600 on Form 1099. Now, you may or may not be liable for income taxes as a result of debt settlement due to the fact that an “insolvency” rule exists for individuals who are classified as insolvent at the time of their various settlements. In order to be considered insolvent your liabilities must exceed your assets. If you’re not sure where you stand, I recommend that you speak with your tax professional to find out if this is the case for you.

Well, we’ve covered the negative aspects of debt settlement; now let’s take a look at the good that can result from negotiating with your creditors.

Let’s face it – if you’re considering debt settlement, you’re struggling to meet your monthly financial obligations, or your accounts are already seriously delinquent and you’re even contemplating bankruptcy. Debt settlement is an excellent alternative to bankruptcy because it allows you to become free from debt without allowing your personal information to become a matter of public record, as would be the case with a bankruptcy filing.

Additionally, while the reported delinquencies on your various accounts will have a temporary negative impact on your credit score, the effect won’t be nearly as severe as that of a bankruptcy filing. If you’ve managed to keep your accounts current, and your credit score is reduced during the process of debt settlement, your score will continually increase as your accounts reflect zero balances, which will occur with each final settlement payment. In most cases, individuals find that their credit score is back up between 600 and 700 within 6-9 months of completing the process of debt settlement.

Probably the most relevant benefit regarding debt settlement is that you’ll be free from debt. No more sleepless nights and constant worry, trying to figure out how you’ll get through the next month with a positive balance in your checking account.

Hopefully this piece has assisted you in figuring out if debt settlement is right for you. If you’re still not sure, and I have not successfully clarified “The bad, the good and the truth,” you can learn more about debt settlement by clicking here.

By: Marie Megge

Credit card debt has become one of the largest financial problems faced by a majority of people today. Many individuals struggle paying off this debt without realizing that there are debt relief grants available from Federal Financial Aid Programs, that have been set up with the specific purpose of helping the average citizen pay off their unsecured debts. While some people simply do not take advantage of these grants because they are unaware that they exist, many others don’t utilize them because the process seems too confusing for them to complete alone. Fortunately, there are programs and software available to help you get this money.

While debt relief grants are out there, finding them and applying for them is usually the most difficult part. Remember that while you may eventually be able to pay off your credit card debt by working hard and paying the minimum balance for years, or even decades, getting one of these grants will offer you immediate relief. One of the most positive aspects associated with this type of money is that unlike a traditional loan, you usually are not required to offer some sort of collateral, and will also avoid large amounts of interest.

The process of receiving debt relief grant money will require that you first apply. The individual or government group that handles this kind of relief program will want to know how you qualify, along with exactly how much money you will need. One of the main considerations will be your ability to repay the money that is currently owed by you to all of your creditors. The easier it is for you to prove that repaying this debt in a reasonable time frame without large amounts of interest is impossible, the more likely it is you will be approved for a grant.

Getting the money that you need to finally repay your debts can seem like a difficult process, but doesn’t have to be. Instead of refinancing your current debts or taking out another loan with a large interest rate, consider applying for debt relief grant money from one of the many Federal Financial Aid Programs that are available. Remember that there are many types of software and organizations available that can help you apply and simplify the entire process for you. The benefits of finally paying off your credit card debt once and for all should be incentive enough for you to start applying for these grants today.

By: H. Milla