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Debt Relief Guide


Chris Collins


The іnfоrmаtіоn рrеsеntеd іn thіs eBook sоlеlу аnd fullу rерrеsеnts the viеws оf thе аuthоr аs оf thе dаtе оf рubliсаtiоn. Anу оmissiоn, оr роtеntiаl mіsrерrеsеntаtіоn оf, аnу реорlеs оr соmраnіеs is еntirеlу unіntеntіоnаl. As a result of сhаnging іnfоrmаtіоn, соnditiоns оr contexts, thіs аuthоr rеsеrvеs the rіght tо аltеr соntеnt аt thеіr sole dіsсrеtіоn imрunitу.

This eBook іs fоr informational рurроsеs оnlу аnd whіlе еvеrу аttеmрt hаs bееn mаdе tо vеrіfу thе іnfоrmаtіоn соntаinеd herein, thе аuthоr аssumеs nо rеsроnsіbіlіtу fоr еrrоrs, іnассurасіеs, аnd оmіssіоns. Eасh реrsоn hаs unіԛuе nееds аnd thіs bооk саnnоt tаkе thеsе іndіvіduаl dіffеrеnсеs іntо ассоunt. Fоr еаsе оf usе, аll links іn thіs report аrе rеdіsrесtеd thrоugh thіs lіnk tо fасіlіtаtе аnу futurе changes аnd mіnіmіzе dеаd lіnks.

Thіs е-bооk іs соруrіght © 2019 by Chris Collins with аll rіghts rеsеrvеd. It is illеgаl tо сору, distributе, оr сrеаtе dеrіvаtіvе wоrks frоm thіs еbооk іn whоlе оr іn раrt. Nо раrt оf thіs report mау bе rерrоduсеd оr trаnsmіttеd іn аnу fоrm whаtsоеvеr, еlесtrоniс, оr mесhаniсаl, іnсludіng рhоtосоруіng, rесоrdіng, оr bу аnу informational stоrаgе.

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Table of Contents

Circumstances under which debt relief is applicable

1. Debt management plan

2. Debt settlement

3. Do it yourself methods

4. Bankruptcy

Disadvantages of debt relief

What should you not do when it comes to debt relief?

Scams associated with debt relief.

How to avoid debt relief scams

Do debt relief make thing better or worse?

Top Debt Relief Recourses:

Debt relief refers to the act of slowing down the rate of growth of debts owed to individuals or rather stopping the growth of debt. Besides, debt relief is also the partial or total forgiveness of debt. Usually, it tends to change the terms as well as amounts of debt so as to enables a debtor to embark on life with little or no debts at all. However, it is usually not the right decision to opt to go for debt relief as it is accompanied with some consequences. It involves seeking a change in interest rate or payment schedule so as to reduce payments, persuading creditors to accept less than the total amount owed as well as wiping the debt altogether on bankruptcy. Thus, the ways in which debt relief may be acquired include:

1. Debt management

2. Debt settlement

3. Diy methods such as debt consolidation

4. Bankruptcy

It is worth noting that debt management may fail to reduce debts but it's effect on one's credit is less severe. On the other hand, bankruptcy and debt settlement may minimize and even eliminate debts but they severely impact one's credit. While some debts are erasable with much ease, others may not. Some of those that may not be erased or reduced include; child support, secured loans, federal student loans as well as child support. In instances where better budgeting may fail to resolve debt settlement, devt relief happens to be the ultimate solution to repairing one's finances.

Circumstances under which debt relief is applicable

• Do it yourself kind of methods such as a combination of debt consolidation, stricter budgeting as well as appeals to creditors ought to be considered if one is at a position to repay his or her unsecured debts within a span of five years.

• One should consider debt management or bankruptcy if:

i. They have no hope of repaying unsecured debts in a span of five years even though they take severe measures to minimize spending.

ii. The total of their unsecured debt equates to half or more of their gross income.

1. Debt management plan

Debt management gives one an opportunity to pay unsecured debts (typically credit cards) but usually at a lower interest rate or rather with fees waived. What happens in debt management planning? One makes a single payment daily to a credit counseling agency which later distributes it to your creditors.

Often, credit counsellors as well as credit card companies have an agreement that is long-standing in place to ensure they assist debt management clients. Credit card a counts are closed. Debt management plans themselves tend not to tamper with credit scores while closure of credit card accounts affects the scores. It happens that one is allowed to apply for credit once the plan is completed. Note all the fees as well as carry out investigation on other alternatives you may have before dealing with debt.

2. Debt settlement

This happens to be the carry last option that one should consider to settle for especially when it comes to those that fail to qualify for bankruptcy. Debt companies usually ask one to stop paying their creditors and instead put money in a particular account that is under their control. Each and every creditor is approached as the money accumulates in their account which makes one to lag behind on payments. Usually, the fear of getting nothing at all may actually motivate the creditor to accept a smaller lump sum offer and agree not to pursue you for the rest.

Failure of paying one's bills may lead to penalty fees, collection calls and even legal actions being taken against them. However, debt settlement does not stop any of the consequences while you are still negotiating. Consistently making late payments usually damage the credit scores. One may happen to face a bill for taxes on the forgiven amounts. Lawsuits may also lead to wage garnishments as well as property liens.

3. Do it yourself methods

This where one partakes the roles that credit counselors do in debt management plans. It often includes contacting one's creditors and explaining to them the reason as to why you fell behind and what concessions you require to actually catch up. Most credit card companies have hardship programs and who knows, they might be willing to lower your interest rate and waive fee.

Alternatively, one may educate themselves on debt settlement and negotiate an agreement by contacting creditors itself. In cases where debt may be unsurmountable, then other strategies may be available such as if your credit scores are commendable, one may manage to apply for a credit card with a 0% balance transfer offer that would allow one a smooth time. Notably, it's essential to have a plan that will prevent one from running up their credit card debt again.

4. Bankruptcy

Inarguably, it is accurate to conclude that it is pointless entering a debt settlement if one is unable to pay as agreed. Therefore, it is advisable that one talks to a bankruptcy attorney immediately before pursuing any debt relief strategy. Initial consultations are are usually free, if one fails to qualify, they are free to move on to other options. Bankruptcy is considered the best option to go for among all other debt relief programs.

What you ought to know about bankruptcy

Bankruptcy may be unnecessary if one does have any income or rather property that a creditor may go after. Usually, creditors can still sue one and get a judgement, but they won't be able to collect.

It may fail to be the correct option opting to give up property you would otherwise want to keep. There exist a particular kind of property exempted from bankruptcy such as some vehicle of a given value.

If it happens that debts continue pilling up, one may file another Chapter seven bankruptcy for eight years.

Bankruptcy will never erase taxes owed/child support obligation and student loans too may not forgivable.

If one settled for a consigner, their bankruptcy filing will make that consigner responsible for the debt solely.

Benefits of debt relief

• It enables one to avoid bankruptcy

Selling debts with your creditors if done right may help one to avoid filing bankruptcy and dealing with the consequences of a bankruptcy.

• Assists one to pay debts in lesser time

Debt settlement program assists one to repay debts in a span of two to four years which is a way shorter time if compared to the original repayment schedule.

Disadvantages of debt relief

• Creditors are usually not guaranteed to agreeing to settlement offers and one's credit may suffer in the meantime.

• One may owe taxes on the amount of debt that has been cancelled.

What should you not do when it comes to debt relief?

It is important that one understands that not all things you consider doing in the debt relief niche are as helpful as they seem. Decisions ought to be made with much consideration of their consequences. Some of the tips on decisions and actions that one must refrain from include;

Avoid making decisions on the basis of the creditors that tend to pressure you the most. This is because it might result to actions that could possibly not be in your best interest. Always take your precious time to research your options and select one that works the best for you.

Give it a second thought borrowing cash from retirement accounts in work places. This is because of you happen to lose your job, the loans may become inadvertent withdrawals and even trigger a text bill (remember that this is the last thing you need).

Avoid withdrawing cash from your retirement savings accounts in order to settle unsecured debts.

Avoid borrowing against the equity in your home. By doing so, you are certainly putting your home at a foreclosure risk and u might end up changing an unsecured debt wipeable in bankruptcy to one that is secured and can't be wiped out.

Refrain from paying of secured debts at a later period so as to pay an unsecured one. One could lose the collateral that secures that debt.

Scams associated with debt relief.

As people seek to do away with lump sum debts, debt relief companies are sought so as they can handle the entire procedure with the aim of settling the debt fully. Some of these companies are however not genuine and often engage in practicing scams. Some of the scams consumers should avoid include;

Fake credit repair.

Genuine credit repairing companies intend to assist consumers in doing away with credit problems. However, fraudulent credit repair companies engage in malpractices that often cause consumers to incur losses in the long run. Some of these companies need one to pay upfront service fees that are very high. They also may demand that the amount to be played via a demand draft. As if that is not enough, they go ahead and ask the consumer to disclose information concerning their bank accounts followed by credit analysis session. The credit analyst proceeds on to persuading you to purchase their services and you may later discover that a debit has been processed on your checking account. However, once you pay for the upfront fee, the company fails to repair your credit.

Debt consolidation scams.

Being a debt relief service, debt consolidation companies are sought by consumers on large debts. Some of the malpractices carried out by fraudulent debt consolidation companies are;

Asking for extremely high upfront fees that could even be thousands of dollars.

Inquiring for personal information that includes the account number as well as social security number. This should not be the case as they should only be interested in knowing the name of the creditor, balance as well as their interest rates.

Fixing extremely low monthly charges with hidden fake costs for consumers. They do so as they are aware that they shall raise a higher amount the moment the consumers enroll for the program.

Debt settlement scams.

At times, debtors may be finding it effective to settle their loans via negotiations. However, some may be misled by fraudulent settlement firms as some of their malpractices include;

Failure to provide full details concerning how they ran the settlement process.

Fooling customers by making them think that they are at a position to help them out with a lot of savings on their debts. Instead, they conceal the amount of service charge that a consumer is to pay the settlement company.

Assuring consumers that they would not receive harsh calls from creditors yet do nothing about it.

They at times tell consumers to cease paying dues to creditors and instead recommend that they open a savings or checking account. Later, they keep details of those accounts and draw their monthly fee from there.

How to avoid debt relief scams

a. Attempt to acquire the credentials of the company from the National Business Reporting Bureau.

b. Google the company's name and look up for discussions, suggestions, as well as updates made on the company.

c. Check for a perfectly clean record of good debt services to be certain about the company's performance.

d. Discuss details of the companies with a debt attorney or rather friends and acquaintances.

Do debt relief make thing better or worse?

From the above discussion, one may end up being torn between whether to choose to go for debt relief or not. Well, the answer to this question is both yes and no. This is because debt relief might end up worsening the situation by resulting to one's debt increasing rather than reducing. On the other hand, debt relief could give one a new start that would finally bring about progress on debt clearance.

In conclusion, I have come up with key factors that one may pay attention to so as to ensure that they take the correct turn from piled up debts. Prior to o engaging in an agreement with any of debt relief companies, get to know the following;

What fees are to be paid

All the tax implications

The requirements that would make you a qualified candidate for the debt relief program

Which creditors ought to be paid for the service so that payments are to the right agencies.

The amount of service fee you are to pay to the debt relief company

Top Debt Relief Recourses:

National Debt Relief

American Debt Enders

CuraDebt Debt & Tax Counseling

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