Tuesday, May 13, 2008

Who are the Best Debt Negotiation Companies?

Debt negotiation, also called debt settlement has become very popular over the past 4 years. Since the change in the bankruptcy law in 2005 debt negotiation has become the best alternative to people who otherwise would need to go bankrupt. Therefore opening up a huge market for debt negotiation services. But how can one tell the best debt negotiation companies from the ones who are rather inept.

For one any good service will be listed in the BBB, and have a good track record. This almost goes without saying. Second a company should charge a portion of their fee based on their performance. And by performance I mean how low of a settlement they can get for you. The lower the settlement the more money you as the debtor will save. There are far too many companies out there that charge just only a flat percentage of your total debt amount and collect 100% of it upfront before any settlements have been made. This fee setup leaves no incentive for the negotiator of the company to get the best settlement because they have already earned all of their money. When a negotiator works off of performance they will earn more by getting a better deal and saving the client more. Resulting in a win-win situation.

One more thing to look out for is whether a company is under investigation by the Attorney General. You should look up the states AG office for the company you are considering doing business with, and if they are being investigated then stay far away.

And of course a good debt negotiation service should have a very capable and friendly client services departement, that is capable of handling the day to day operations of the business. Way to many companies neglect to really improve and take pride in their client services resulting in the client not getting what he or she thought they were going to get.

One of the best debt negotiation companies around is the US Consumer Advocate, this organization has a stellar BBB record and works based on their performance, for people in debt needing help they are definitely worth talking too.

Wednesday, April 9, 2008

Which debtors are well suited for debt settlement?

To start off I would appreciate for my readers to first understand which consumers are in need of debt settlement as a means to become debt free. One illustration of those in need are the consumers who pay only the monthly minimum payment. Another prime candidate for debt settlement is the person who has already fallen behind. The next individual who is ready for debt settlement is the person who owns a home with money coming in who is sincerely thinking about filing for bankruptcy.

At this point you must be thinking what is debt settlement? Debt settlement is a method of gathering enough money to arrange a one time payment that is negotiated down to a lower amount than the original balance owed. The first issue that pops into mind for most debtors at this point is, how in the world do you get your creditors to agree to a lower amount?. Well the answer is pretty simple, you need to fall behind on the debts owed. The reason being no credit card issuer in the world is willing to negotiate on a debt that is current. Which is logical why would the creditors negotiate for less if they think you can continue to pay their monthly minimum payments for the next thirty years, earning them large amounts on interest. So one must come to grips that in order to achieve a decent settlement you need to go behind on payments.

So what are the advantages of going through this process? The greatest advantage of settling your debts is that of saving money. Which in turn correlates with the next benefit, which is saving years of time. With the debt settlement process a debtor can expect to save around forty to fifty percent of what is owed, and become free of debts within 2-3 years.

When searching for a establishment to employ for debt settlement one should do their research before contacting the company. To ensure the establishment you will be using is reputable and can get the job worked out the right way. A good spot to start is too check up on the Better Business Bureau, most good standing companies will be registered with the BBB. Another extremely wise measure to take when seeking out a organization to do debt settlement is checking the Attorney General. Many states' Attorney General will list any company that is being investigated. As you can tell any company being investigated will not be a decent company to sign up with.

Tuesday, March 25, 2008

Please do yourself a favor! Avoid Bankruptcy

It crosses many debtors minds when struggling in debt, at one time or another have contemplated the option of going through a bankruptcy proceeding. In this brief writing I am going to give you three very serious reasons why you should keep away from bankruptcy at all costs, if possible. Many people do not understand the deep negative blow a bankruptcy can have.
1. Filing for bankruptcy has an enormously negative effect on your credit rating and becomes a lifetime public record!

A bankruptcy proceeding is one of the worst derogatory remarks that you could have put on your credit report. Thus making any additional credit you try to get extremely hard, and if you do get credit it usually comes with a pretty elevated interest rate. Plus, it will remain on your credit history for between 7-10 years. Even when it gets removed from your credit history it stays a public record for the rest of your existence. So whenever you apply for new loans at any point in the future, if they ask whether you have ever gone through a bankruptcy proceeding by law you must answer yes.

2. Brand New Bankruptcy laws in 2005!

In 2005, Congress approved a law which forces anyone filing for a Chapter 7, which will wipe the table clear of all your debts much more difficult. Basically if you have an income producing job and assets than most assuredly you will go into a review to find out if you should do consumer credit counseling first for at the minimum 6 months. According to NFCC close to 80% of people who apply can't abide by the very regimented rules set from them to complete the program thus throwing them back into the bankruptcy proceeding. That's when Chapter 13 comes into the situation which is a form of personal bankruptcy in which the judge will decide how much you will pay back each collector you list based on your budget.

3. Court Controlled Income with Chapter 13!

Before the new law was approved in 2005 many people that would be able to claim Chapter 7, were now forced to go Chapter 13 in it's place. Chapter 13 requires that you review with the judge and make available all of your finances. You must show all sources of income and assets. The court will go over your expenses compared to your income and then figure out how much money you will have to dish out each month. The court decides this for you, leaving you with no say in this process. If you have liquid assets such as a paid off car they can force you to sell them, within State law, to pay down your debt. There are scheduled reviews each year and if your income increases you must tell this to the judge, this could bump up the amount you pay back. If you have two family cars you could have to sell one to help pay off your debts. They basically tell you what you can do with your income. If you have the higher costing cable you will be forced to cut back to basic cable, if you consume high priced steaks every day you will need to cut back to cheeseburgers. This can be a very hurtful and embarrassing process.

These are all extremely unattractive proceedings that debtors must be made aware of before dealing with a bankruptcy attorney. Many attorneys will not disclose these negative facts of bankruptcy. Bankruptcy is available for a reason and for some individuals they have no other debt relief system available to them and must file bankruptcy, however a lot individuals go into bankruptcy when it could have been avoided. A very attractive substitute option to bankruptcy is credit card debt settlement. With debt settlement in many cases you will save way more money than you could have with a Chapter 13, plus you will be out of debt much quicker, and not experience the multitude of negative consequences of a bankruptcy hearing.
Steve Bis is a credit card debt analyst with the US Consumer Advocate, which practices in debt relief.