Negotiate credit card debt

Credit Card Debt Settlement Program Explained

admin — Sun, 15 Aug 2010 08:37:33 +0000

A credit card debt settlement is an agreement between a debtor and a creditor to negotiate debt for a reduced percentage of the payoff amount (typically 35%-50% of the total debt). A credit card debt settlement begins when the creditor agrees to cancel part of the debt and accept the remaining percentage as full payment. Credit card debt settlement is also known as “credit card debt negotiation”. Consumers who use debt settlement are those who are having financial hardships, and wish to avoid filing for bankruptcy. Credit card debt settlement programs are provided by debt settlement companies who negotiate settlements on behalf of the debtor. Typically, credit card debt settlement programs can get individuals and companies debt free in a short period of time.
Benefits of a Credit Card Debt Settlement Program
Debt negotiation and debt settlement is an option worth considering because:
oYou get out of debt without filing bankruptcy. You will never have to check the “yes” box to the question “have you filed bankruptcy?”
oIt is simpler and quicker (4-18 months) than a Chapter 13 bankruptcy (36-60 months).
oIt is quicker and cheaper than most consumer credit counseling plans. Credit counseling plans typically last for 3-6 years, and sometimes longer.
oIt is not a public setting. Everything you do is private. You will never be required to justify your monthly living expenses to the Bankruptcy Court and a representative of your creditors (the Trustee).
oCredit card debt settlement companies work only for you. Most credit counseling firms are there to get the best deal the credit card companies can squeeze out of you. By contrast, loyalties are to you, not your creditors.
Q: Is debt settlement the same as debt consolidation or consumer credit counseling? No. With credit counseling, you must pay back all of your debt plus interest. While they will reduce the interest rates from say 20% to about 8 or 9%, you still pay interest. With consumer credit counseling, you have to pay back 100% of what you owe. With debt negotiation, you pay back a fraction of what you owe. Also, Consumer Credit Counselors are paid by the creditors so they are really working for them and not you. With debt negotiation, we work only for you, not both sides. Credit counseling can be a good solution if you have less than about $10-$15,000 of debt and the plan they propose fits your budget and is less than 36 months long. In most cases, consumer credit counseling plans are 4-6 years, and that is too long, and it damages your credit further.

By: Stephen Craig

Credit Card Bankruptcy – How to Use the Threat of Bankruptcy to Negotiate Debt Settlements

admin — Sun, 08 Aug 2010 21:02:56 +0000

If you think that the only option left in front of you is credit card bankruptcy, take some time out to think from your creditor’s point of view. You can see that if you don’t pay your debts for a long time, it might prove to be of an added advantage to you. A creditor, who hasn’t received any payment for last one year or so, is more prone to accept, even if you offer to settle the debts with a 30% repayment. This is because it will save him/her from chasing you for another year instead. This may not apply to all kind of debts and then there are ample chances of the creditor suing you or getting a judgment to garnish your salary.

But more often than not, credit card bankruptcy isn’t your only option because creditors are willing to reach a settlement. Once you start receiving calls from a different collection agency, it means that this is a fresh attempt from the second creditor and that the first creditor has already given up. Naturally the second creditor will be keener to reach a settlement with you. So, the more you stretch time and at the same time accumulate money, the more are your chances to get rid by settling for a smaller amount and paying it off at once.

Don’t forget to inform the lender that you are thinking of filing for credit card bankruptcy and once that happens, he/she doesn’t stand a chance to recover any amount from you. At least that is what happens in most cases. Here again, timing is important because if you file for bankruptcy, the lender will have to be in queue to collect and that might take a much longer time. The creditor knows how filing for credit card bankruptcy can further complicate things and is likely to negotiate debt settlements.

But keep it in your mind that you are only using bankruptcy threat as a weapon, and don’t start giving it a serious thought. Credit card bankruptcy will affect your credit rating in a very negative light. It will be almost impossible for you to arrange for any loan or mortgage for the next 7 to 10 years. However, creating this impression is very important, to show how desperate and helpless you are, and as a result, the creditor is much more likely to accept the settlement figure that you are offering.

By: Sankalan Baidya

Bad Credit Repair – Credit Repair vs Debt Negotiation

admin — Wed, 04 Aug 2010 09:22:32 +0000

If one of these cases is, or has been your situation, chances are you have bad credit:

- If you have paid any installment loans like a car loan more than 60 days late, or a mortgage loan payment more than 30 days late

- If any of your credit, loan, store, or bank accounts have been turned over to professional debt collectors

- If you have credit card or line of credit accounts that are currently very near or over the limit

All of the above scenarios can cause your credit score (or FICO score) to be under 620, which is generally considered to be in the ‘bad credit’ range. You want to take steps to improve this score immediately if you are applying for a loan, credit card, or job that requires a fair credit score.

One way to make improvements to your credit score is through credit repair. Credit repair is necessary when there are items on your credit report that are inaccurate or incorrect. If you obtain your credit report and find there are items that you would like to dispute, the credit bureau by law must investigate your claim and resolve the issue within 30 days. If there is no evidence to support your claim, the item must be removed from your credit report. You do not need a lawyer or law firm to handle this for you – it is free when you do this on your own. In the end, the less negative and incorrect items that are listed on your report, the higher you credit score will be.

It is very important to examine your credit report closely to make sure all items are correct. If there are any errors on your report, even one, you can benefit from bad credit repair. In this age of technology, it has become easier for identity thieves to get a hold of your most personal information, use it to make purchases on your credit cards, open new accounts with your name, and then fail to pay on those purchases. Make sure you are not an identity theft victim by reviewing your credit report closely. If you find inaccurate accounts or information, file a dispute. These items must be removed from your report – thereby increasing your score and helping you to restore your credit worthiness.

Another method when considering bad credit repair is debt negotiation. Debt negotiation is a credit repair method that works with your creditors to reduce the outstanding amount you owe on an account. Many times, your outstanding balance can be reduced to an amount that is 40%-60% of the original debt. When you or a professional debt negotiator comes to a settlement agreement with the creditor, you pay the reduced amount. Once this amount is paid (either monthly or in total), the account is considered paid in full or “settled”. The fact that debt existed will still be reported on your credit report for up to 7 years, but not having as much debt on your plate can increase your score and your debt to income ratio will also improve.

If you have a lot of debt and it seems unmanageable, you might want to consider debt negotiation. When your accounts get out of control, you run into a lot of issues including increasing interest, over the limit fees, and if your account is sold to a collection agency, they can add fees on top of your outstanding balances. All of these factors can lead you deeper into debt with no foreseeable end in sight. Debt negotiation can be a great way to work down your debts and start a new credit future.

By: Ken S

Debt Negotiation Equals Reduction and Debt Canceled

admin — Sat, 03 Jul 2010 15:59:24 +0000

There is a new way termed debt canceled which is a process to eliminate your credit card obligation with self-negotiation. Being financially free by self-negotiation may seem difficult because you are required to work this process. The procedure for financial relief can be really simple when you find the right help you need. You contact your creditors and request that they cancel your credit card debt because you are unable to pay them based on your hardship so you can avoid bankruptcy. You can just send your creditors letters explaining your situation and that it would be to their advantage to cancel all of your money owing. You will need to give them all of the pertinent information about yourself so that their decision to cancel your financial responsibility will go your way. Credit negotiation does not have to cost you any money because you can do this yourself with a little help from knowing about debt canceled. Complete elimination of your financial burden is the goal to go after.

Using a formula called debt canceled provides you all the information you need to get your situation under control. Your credit card account balance can be erased. You can receive the relief you are looking for. What exactly is the definition of Debt Canceled? This is when the bank or credit card company cancels your entire obligation that you owe them because of your inability to pay. You then will have no more monthly payments because your balance has been canceled. You are then free and clear of any commitment to that bank or credit card company.

Debt management, consolidation, paid negotiation, reduction, & paid counseling are things of the past. Even if you use debt consolidation you will still have monthly payments for years with a balance. Discover how to eliminate debt with no monthly payments or balances by self-negotiation in the way of mailing letters describing your situation instead of phone calls or setting down at a table to negotiate. Creditors may try to manipulate you over the phone just to get you to send them more money. Never negotiate your credit card liability over the phone. The same holds true when setting down at the table in person to negotiate. You do not want debt reduction. You want a complete elimination of your entire liability, which would mean no more monthly payments or balance on your credit card accounts.

You can avoid bankruptcy and the high costs that come with it by using a system of debt elimination explained in detail. I’m not a lawyer but I know that there are new kinds of debt solutions today for the one who is struggling with money owing and has no money to get the help they need. The Banks and credit card companies are making millions of dollars off of our purchases and then give us back pennies as an incentive to charge more. How can you eliminate these monthly payments and balances using their program?

Debt negotiation equals reduction and debt canceled of all credit card obligations to become financially free. When your spouse losses their job and could not find work then your income will not be enough to pay your credit card balance and your basic living expenses. Even when you charge not only food but also your utility bills. Finally the money owing was getting more than you can bear because spending had to continue, going deeper into financial ruin. You may or may not be able afford to file bankruptcy. You can get some free financial counseling and credit management as an option. Study the subject of money owing and learn some legal things.

By: Bill Naugle

How To Avoid Bankruptcy & Get Out Of Debt Faster Using Debt Negotiation!

admin — Wed, 23 Jun 2010 08:31:57 +0000

Has credit card debt got you thinking about bankruptcy?

You’re not the only one these days. Even with the new bankruptcy laws, credit card debt continues to climb. Unfortunately for most of us, our paychecks don’t climb as quickly.

If you’re on the verge of bankruptcy, you may have another alternative.

Debt negotiation is a process where you negotiate with your creditors to pay off your debts at a reduced amount – for example, if you owe $12,000, you can negotiation a payoff of $5,000. The benefit for the creditor is that they get more money than they may have through bankruptcy, and they get the money sooner. The benefit for you is obvious – you get out of debt faster, and save lots of money in interest.

Where do you get the money to pay off the debt?

Take the money you would have normally used to pay your credit card bills, put it aside, and when you accumulate enough to pay off the debt, send in the reduced amount you agreed to.

If this sounds confusing, that’s ok. It’s really not.

There are many professional companies that will do all the work for you, and charge you a percentage of the savings.

I can speak from experience (I built up a lot of debt trying to start a sporting goods business, which didn’t quite work out) that even with the fees, this is a good deal – plus you save a lot money by not having to pay the high interest rates on your credit card bills.

Sure, it is a more aggressive approach to getting out of debt than making minimum payments, using credit counseling, getting a debt consolidation loan, or borrowing from a friend or relative. But in the end, you’ll get out of debt faster…

And avoid bankruptcy!

If you’ve never heard of debt negotiation (also called debt settlement), that’s ok too, not many people have. I didn’t until I began to seriously consider bankruptcy.

One reason many people are hesitant to consider debt negotiation is that it goes on your credit report. Sorry to tell you, but having lots of debt (even if you pay on time), making payments late, even credit counseling – all go on your credit report and can negatively effect your credit. And (of course) bankruptcy is a big negative!

In my case, getting out of debt, removing all the financial stress, and being able to live a normal life were well worth it. With so much debt, having good credit was meaningless anyway.

Plus, I was able to get all but one of the negative items off my credit report (that’s a topic for another discussion), and my credit is now back to normal. In fact, I now get more credit card offers than I can handle – and fortunately, I can now throw them all in the trash!

When money is tight, and debt is high, there aren’t many simple answers.

But if you are already considering bankruptcy, then debt negotiation might be the right alternative to help you get out of debt faster!

By: Kris Bickell

How to Negotiate a Debt Settlement – The Best Tutorial!

admin — Sat, 19 Jun 2010 06:10:28 +0000

If you want to learn how to negotiate a debt settlement and do not know where to start, this article for you.

Negotiate on terms

There are a number of programs which enables you to understand how to negotiate a debt settlement and what is the best and effective way of doing it. Starting from the basic you will find that it is important to negotiate on terms to finalize the deed. It’s not a tough one and you can actually master the terms and conditions and soon you will learn how and on how much to settle.

Don’t be hasty

Never try to rush on one while negotiating on a debt settlement. Strategically go with “Wait and Play”. Don’t rush behind the ball because it is possible that in a hurry you make a mistake which will cost you in shape of your precious money and some of the time more than that. When learning how to negotiate a debt settlement, it is important to stay focused, calm and just don’t agree on vague and expensive grounds when you don’t want it to.

Always go for a cutback

Always remember that it’s not just about the minimum amount of the payables but it’s also comprises with an average of 30 to 50 percent of total debt which in case of creditors they are not willing to leave and put you under pressure so that you leave the bargain and do as they want. So always go for a cutback on your debts and never let them take that away from you.

Document and file

Whatever you do, do document it and file it. Documenting every step will help you in future how to negotiate a debt settlement. After all it’s your private data and you should keep track of all the information related to it. In future if you deal with a settler or try to do it by yourself make this clear at this level that all the documents are there and intact to be compliment your case.

By: Jerry Cole

Bad Credit Repair – What is Debt Negotiation? Common Questions Answered

admin — Wed, 26 May 2010 04:42:24 +0000

If you have bad credit and are in need of bad credit repair due to unpaid or slow paying debts, you may want to consider debt negotiation. You may be a great candidate for debt negotiation if any of the following describes your situation:

o If you have any credit cards with payments 60 days past due

o If you have 2 or more credit cards with payments 30 days past due

o If you have any installment loans, such as a car loans, with payments 60 days past due

o If you have 2 or more installment loans with payments 30 days past due

o If you have made any housing payment (mortgage or rent) more than 30 days past due

No matter what, if you are consistently paying late on your accounts, the problem will just persist unless you take control of your debt. Many creditors and lenders will negotiate a debt reduction if you ask.

Let’s take a look at how debt negotiation works. Debt negotiation is a process where you negotiate with each of your creditors to try to reduce the amount you need to pay to settle your debt and have your account considered paid in full. Many times, debt can be negotiated where you only have to repay 40%-60% of the total amount owed. Debt negotiation is a huge step toward bad credit repair.

You can negotiate your debt yourself. Though time consuming, with diligence debt negotiation can be achieved on your own. However, there are companies that specialize in debt negotiation for the purposes of bad credit repair. These companies have experience and relationships with many lenders and many times can quickly negotiate a low repayment amount.

If you choose a debt negotiations company, you will sign what is called a “limited power of attorney” giving professional debt negotiators the legal right to negotiate a reduction in your debts on your behalf and begin your bad credit repair. After negotiations, the debt negotiations professional will report your total negotiated amounts back to you, and set up a payment plan that you can easily afford. This payment plan rolls the repayment of all your negotiated debts into one affordable monthly payment without taking out a debt consolidation loan. You will send your monthly payments to your professional debt negotiator who will place your payment into an escrow account that will be used to repay your debt settlement. Once you have a predetermined amount in your escrow account, your professional debt negotiator will make payments to your creditors that will lead to your accounts being considered settled-in-full and paid-in-full. Paid-in-full accounts can take anywhere from 12 to 60 months to complete depending on the monthly payment you set, but annoying collections calls to your home, job, or cell phone usually stop right away.

If you consider negotiating your debts on your own, you may find that it is a difficult and time consuming a task but do not give up. Be diligent in calling each of your creditors and asking for a reduction in your debt. You may be able to reduce your debts up to 60%. I also suggest you seek debt counseling Many debt negotiators have relationships with creditors and can work full time to get your bad credit repaired.

Either way, you can benefit from debt negotiation because it will free up some money each month and save you money in total. For example, imagine you have $10,000 in total credit card debt and you are paying $750/month in minimum monthly payments. You get your debt negotiated down 60% to $4,000 with a repayment of $300/month. You are now freeing up $450/month with a significantly lower monthly payment, and you are saving $6,000 in total credit card debt that you will not have to repay.

At the end of the day, you will feel much better once you are less buried by debt and begin the process of Bad Credit Repair and Debt Negotiation Help bad credit repair. It is better to face your debt than hide from it as it will never just ‘go away’. Once you face bad credit and your outstanding debts head on, you will be on your way to a better credit score and more opportunities to borrow at lower rates in the future.

- Ken S.

Is Debt Settlement a Better Choice Than Bankruptcy?

admin — Fri, 30 Apr 2010 14:12:36 +0000

Debt settlement is a good alternative to bankruptcy. In most cases, the services of a professional debt settlement company are required. These trained professionals are well-connected in the credit industry and can negotiate with credit card companies and lenders.

The primary goal of debt settlement is to significantly reduce outstanding debts. The Borrower pays the lender a lump sum cash payment or develops a repayment plan. Once the agreed upon balance is paid in full, the remaining balance is written-off.

Debt settlement can be used to negotiate medical bills, credit cards, student loans, unsecured personal loans, repossessions and accounts in collection. Debt management agencies generally cannot assist in negotiations with mortgage lenders, secured notes, delinquent child support, or tax liens.

Oftentimes, these professionals can negotiate debt reduction by as much as 60-percent of the total owed. However, Borrowers generally won’t receive the full discount. Most debt settlement companies charge a start-up fee, along with monthly maintenance fees until debts are paid in full. These fees range from 10- to 40-percent of the total amount owed.

Let’s say you owe $100,000 and hire a debt settlement company to negotiate on your behalf. Their total charge for services rendered is 15-percent of your overall debt; or $15,000.

Now, let’s say the company reduces your debt by 50-percent; or $50,000. Even though you have to pay a service provider fee, you have still saved $35,000.

There is a possibility the Internal Revenue Service will charge tax on the reduced debt amount. Using the figure above, the IRS might assess capital gains tax on the $35,000. Experts recommend consulting with a tax professional before entering into a contract with a debt settlement agency.

It’s important to note engaging in debt settlement practices will adversely affect your credit rating. However, it is not a detrimental as filing bankruptcy. The impact debt reduction has on your credit score depends on your current credit status. If you have good credit, debt settlement will have a more negative impact than if your credit is already lousy.

There are numerous companies across the nation claiming they can reduce your debt. It is imperative to conduct research and ensure you are doing business with a reputable firm in good standing with the Better Business Bureau – bbb.org. Unfortunately, there are many scammers out there. You certainly do not want to place your private information into the hands of a con artist!

Once you locate a professional organization, you will need to provide information about your outstanding debts. Be prepared to provide account numbers and balances owed. Your designated agent will review the information and advise you of terms offered by each creditor.

It is important to understand creditors are not obligated to negotiate with debt settlement companies. Retaining the services of a reputable agency with a proven track record will improve your chances of successful negotiations.

Repayment plans generally last one to three years; depending on the amount owed. During the repayment period, Borrowers are not allowed to obtain additional credit. Most repayment plans require a considerable amount of disposable income be contributed on a monthly basis. However, for those who want to break free from the debt chains, settlement could potentially be the best option.

Prior to making a final decision, take time to review other debt reduction options. These could include debt consolidation, credit counseling and budgeting. Additionally, you can attempt settlement directly with your creditors.

By: Simon Volkov

Questions to Ask a Credit Counseling Service about Debt Relief

admin — Wed, 28 Apr 2010 12:30:59 +0000

Debt relief is a topic on a lot of consumers’ minds these days, and with good reason. American credit card debt in 2001 was $692 billion, triple the amount from 1989. In that same time period, the average credit card increase for a middle-class family was 75%. The amounts were even higher for low-income families and senior citizens. At one time, such a high amount of credit card debt would seem frivolous as buyers spent money they didn’t have on luxury items such as electronics or jewelry. Today, however, in less stable economic times and a poor job market, more people are turning to credit cards as a way to extend their income. More and more debt is being rung up for everyday items such as groceries and medical bills. How can people get real help with debt relief?

Credit counseling services were originally established by credit card companies who wanted to get at least some of their money back before a client decided to declare bankruptcy. While that may seem shady to some people, for others it is a legitimate way to pay the debt they owe.

When seeking debt relief, however, be wary and be an informed consumer. Do your research before signing on with any one service. Here are some questions to ask:

* How much does it cost? Many less-than-reputable services charge hundreds of dollars to start up, money that doesn’t go to any of your creditors.

* Does the service notify credit bureaus about your enrollment in their program? Some do and some don’t. Creditors may still elect to put a bad mark on your credit report, but the agency you are looking at for debt relief shouldn’t.

* What services are offered? Do they offer a range of solutions from trouble-shooting before finances are a big problem to debt management. Beware of companies promising too quick a solution or promising to “fix” your credit report.

* What are the benefits of belonging to one particular group over another? For example, some services offer newsletters and budgeting tips, all to help you become more stable when your debt is paid off.

* Are they a member of the Better Business Bureau? If that is not advertised, check them out with BBB first.

With time, patience and diligence, you can become debt free.

By: Tim Gorman

Debt Negotiation Advice – How a Proven Settlement Company Can Reduce Your Debt Fast

admin — Wed, 28 Apr 2010 00:56:31 +0000

You have been searching most desperately for debt relief. Do not worry; you are not the only one who is doing so. Most US citizens are searching for debt relief to handle their Credit card debt. What are the various options available to you?

The options fall in broadly three categories; debt counseling, settlement, and bankruptcy. Let us take a look at all three and see which option is the best for you. If you are a small time debtor with a few hundred dollars of Credit card debt, counseling is the best option for you. You need not be even reading this article. If you have come this far it is needless to state that you are down with Credit card debt of more than a few thousand dollars. In this case you need to look at debt relief through bankruptcy or a debt settlement.

Bankruptcy is a legal procedure and needs to be taken very seriously. It has certain nuances and requires detailed documentation. The biggest disadvantages of bankruptcy are two; it does not discharge all types of debt and will cause a huge dent in your credit score. If you though that you could max out all your Credit cards and file bankruptcy you were really mistaken. Debt acquired without the intention of paying back amounts to fraud and can not be discharged by bankruptcy.

Take a look at debt settlement. You need to sign up with a debt settlement company for debt relief. After that you stop paying your installments and answering collection calls. The settlement company will do it on your behalf. You can go in for a consolidation loan to pay up 40 to 50 percent of your outstanding debt at one go. In exchange for a one time payment the debt settlement company will negotiate a waiver for you. Balance of the amount will be waived legally.

The consolidation loan comes at a decent rate of interest with easy installments. You become debt free within two to three years.

By: Lisa Archer-Jones