Debt relief management

Debt relief management

Debt relief management

debt relief

Debt relief as a term refers to the process whereby one receives partial and at times even complete relief from the outstanding debt. Unforeseen calamities, loss of a job and recession play an important role in the inability of person to pay back his loan. To add on to the miseries, the creditors levy heavy interest and late fees on the rest of the loan. This kind of a situation may get aggravated to such an extent that the debtor may even contemplate taking some extreme steps like suicide. To do away with this kind of a situation, debt relief is availed by the debtor, wherein he agrees top pay back the rest of the amount to the creditor either a lower rate of principal or with little if the interest levied.

There are credit counseling agencies which come to the rescue of such hapless debtors and recommend them to get enrolled into a debt relief management plan. A point to be noted here is that debt relief management does not pertain to just counseling, and neither it is remedy of very debtor who has defaulted. One should opt for this only when the credit counseling agency has thoroughly reviewed the debtor’s situation and has a firm plan to rush him away from his current situation.

Debt relief management entails all the plans and ways in which a debtor is able to repay his debt with minimum of fuss. There are scores of debts that a person might be under, from credit cards to home and vehicle loans. This kind of management will look into the outstanding of all the loans, their interest rates, their repayment schedules and how they can be worked out best.

Generally in the debt relief managements after a debtor agrees to the plan and services of a credit counseling agencies, he deposits a certain amount of money with the agency every month. This money in turn is used by the agency to repay the various debts that the person has taken, in the renewed terms and conditions with the creditor. It is very much important that before a debtor embarks upon a debt management plan, he must check with the creditors as to whether or not they have waived off or lowered the principal or the interest rates as touted by the credit counseling agencies.

Getting out of debt

Getting out of debt

Getting out of debt

debt Many problems in our life arise with the debt we are having. It reduces our comfort and changes our way of living. We should find the ways for getting out of debt. If we are having many debts then we can choose the option of debt consolidation. There are many competent and experienced money lenders who provide debt consolidation loans to people. These loans are secured against our property. The debtor is required to pay only one smaller monthly installment which increases their ability to enjoy life as they pay off their debt much more possible. It helps people in their financial hardships.

Credit debt settlement or debt negotiation service is another option for getting out of debt. In this service, a settlement company negotiates with the creditors to lessen the unsecured debt and help them to become debt free quickly. The advantages of this service includes consumers getting relief from their financial problems, they are no longer disturbed with reminder letters and incessant phone calls. There is no risk of legal action being taken against them. They can settle their debt by paying a smaller amount of the debt by negotiating with the creditors. It is financially appealing for customers.

The main reasons responsible for us to get into the debt include having too many credit cards. Spending more than we earn is another way to get into debt. Missing credit card payments as they fall due not only makes us to pay late fees but missed payments can make it more difficult for us to get accepted for credit in the future. Being unaware of how much cash we are having in the bank or lost touch with our finances makes harder to become debt free. Not seeking debt help when we need or feel helpless end up making the situation worse.

Before going into these options, we must be aware of the credit counseling program as it is beneficial for consolidating payments and reducing interest. The economy debt settlement has been a very effective debt relief method for many people. They are saving much of the amount of money with these options and finding themselves getting out of debt very quickly. We cannot begin to think of getting out of debt unless we stop making any further debt.

Credit debt settlement

Credit debt settlement

Credit debt settlement

credit debt settlement

Credit debt settlement is also known as debt negotiation service. In this service, a settlement company negotiates with the creditors to lessen the unsecured debt and help them to become debt free quickly. The advantages of this service includes consumers getting relief from their financial problems, they are no longer disturbed with reminder letters and incessant phone calls. There is no risk of legal action being taken against them. They can settle their debt by paying a smaller amount of the debt by negotiating with the creditors. These help them in saving their money and improve their credit history. They can have a single low monthly payment. They can avoid bankruptcy and help to get out of the financial crisis.
When someone is having debt which is deep enough, the facility of credit debt settlement can be availed instead of filing for bankruptcy. If we are having trouble to keep up with our credit card payments, we can call or write a strong settlement letter to the creditors to close all accounts. The letter must explain the reasons for closing all accounts in detail, backed up with proofs like loss of income or a medical reason. We should accept deals that can easily be paid to avoid making the situation worse than it was in the beginning. We should never pay with a credit card for a settlement.

The loans have higher loan amount, lesser interest rates, easier installments and long period for repayment. It helps people in their financial hardships. We must learn if a debt settlement negotiation program is right for us and should also obtain free advice, quote and speak with certified debt consultants. The companies provide professional advice to find a neutral way to make up the loss of the consumers to conserve their confidence and support their business.

The credit debt settlement is an alternative to bankruptcy. Bankruptcy affects the ability of the debtor to discharge debts. It is a technique to wipe out unsecured financial debt and various consequences attached to the proceedings of bankruptcy. It is financially appealing for customers. We must choose a genuine debt settlement company to get the most advantageous settlement. It is one of the best ways to get rid of our debts and lead a debt free and happy life. We require immediate action to settle the debt to become debt free.

Best debt settlement

Best debt settlement

Debt settlement

Debt settlement

debt settlement
Debt settlement refers to an approach whereby both the debtor and the creditor work out the modalities of the debt repayment and regard a lower balance as payment in full. This is resorted to when the debtor is unable to pay off his loan.

How a debtor decides to settle his outstanding balance, depends upon the kind of loan he has taken, the amount of loan, his financial condition and of course the terms and conditions of the creditor. Generally the best debt settlement option would refer to the negotiation for a lower principal, between the debtor and the creditor. This can also extend to the interest and the late fees levied. They are tailored to meet the needs of both the debtor and the creditor.

Debt settlement helps a debtor to keep away from bankruptcy, because declaring bankruptcy wreaks havoc on the credit credibility of a person and may affect him severely in the future. It is advisable that one resorts to this option only when he sees no hope in near future regarding his credit standing.

Generally, any creditor deals with the consumers on these terms only when they are assured of his financial condition and are confident that by lowering the principal and at times the interest rates and the late fees, the person would be able to pay off his debt as early as possible. More often than not, the creditors may ask for a lump sum amount as the full and final settlement rather than spreading the payment over months or years.

Hunting down the best debt settlement option for you can be an exhaustive process. It is advisable that the person looks into the offer documents, checks the references, research on the reputation and the fees of the company before zeroing it down. Choosing to settle down the debt can have a negative impact on the financial condition of the debtor. It is therefore imperative that one does thorough research, and then only marks the best debt settlement option for him.

Pay off debts

Pay off debts

Pay off debts

pay off debts

Pay off debts refers to the mechanism whereby the debtor tries and pays off his debt as fast as possible with as much installments he can, every month. Increasing debt burden can spell the doom for anybody, especially so in cases where the debtor has more that one loan to look at. When one decides to pay off debts, it helps in doing away with the burden that he carries, before the schedule. This process may bring in certain discomfort for the debtor since he has to slice off a lump sum of his disposable income in repaying the debts, but at least this measure does away with the ever amounting interest and late fee rates.

There are various ways in which one can pay off debts.

~Paying more than the minimum amount due: as one pays more than the minimum amount due, he not only does away with the interest amount that he would have to pay subsequently, but also prevents his outstanding from reaching alarming proportions.

~Snowballing: this entails transferring the debts that have a higher interest rate levied on them getting transferred to the loan accounts with a lower rate of interest. Just in case all the debts especially in the case of credit card are too big to get into one, it pays to pay off the one, with the higher rate of interest first.

~Pay off from the savings account: though it may pinch a bit, but it is wise to divert funds from one’s savings account for the purpose of paying off of loans.

~Borrow from family or friends: many a times we are able to secure loans from our near and dear ones. It pays to borrow money from them, because they generally do not expect you to pay any kind of interest on the amount lent and also do not set a very hard and fast time limit for repayment.

~Negotiate the credit terms with creditors-in case it is possible, negotiating with the creditors for a lower interest rate to enable you to pay off your debt fast may also be worked.

~Withdrawing funds from your retirement plan: though this is not a very suitable idea, it should be resorted to only when there is no other option is left in sight to pay off debts.

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

Debt counseling

Debt counseling

Debt counseling

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.

Debt relief options & programs

Debt relief

Debt relief

Debt relief

debt reliefDebt 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.