Financial debt relief

Financial debt relief

Financial debt relief

Debt relief

There are times when the creditors have very little choice in getting back their money from the debtors who face financial crisis. Hence, to get back loan from the debtors without any unsavory scenes, they resort to financial debt relief.

Financial debt relief is sought by making negotiations with the debtors. This kind of a measure not only enables the debtor to get rid of his ever amounting debts and hence anxiety, but also paves the way for the creditor to receive whatever little amount of the debt he can.

In this kind of an arrangement, both the parties try to strike a deal which suits them the best. The debtor tries on his part, to get his outstanding waived off as much as he can whereas, the creditor on the other hand tries his best to receive as much as he can from the debtor.

There are various ways by which financial debt relief can be worked out. The debtor has the choice of either consolidating all his debts into the one which has the lowest interest rate, paying off -whereby the debtor agrees to pay the remaining outstanding in a lump sum amount after getting the interest rate waived off or by debt settlement -where the debtor gets a waive off either on the principal or the interest and agrees to pay off the rest of the amount in equated monthly installments over a period of time.

Though is very much legal and the right of the creditor to get his money back. However, at times of recession, people face financial hardships and are unable to pay their amounts. The situation may get so worse that the debtor may file for bankruptcy. Bankruptcy is on option which favors neither the debtor nor the creditors. Apart from making a permanent dent in the financial credibility of the debtor, it also denies the creditor any kind hope of getting his money back. To avoid such situations, financial debt relief options are worked out. It helps the debtor to plan the remaining of his debt in such a way that he is able to pay back his burden in the legitimate way with the least amount of fuss.

Get out of credit card debt

Get out of credit card debt

Get out of credit card debt

credit card debt

Today in this world when every person desires to have extravagant and luxurious life and the expenses pushes them to meet the debts then it really becomes very difficult to get out of debts. Today every single person possesses numerous credit cards and without knowing its disadvantages you continuously use them to purchase your day to day requirements. But once you are in credit card debt then it really becomes very hard to get out of credit card debt.

In order to stay out of credit card debts it is important to follow some steps that are given below.

Stop increasing your debts: if you possess numerous credit cards then it is better to lower the number. It is always better to possess one or two credit card at a time because making the payment of two credit cards will not be huge burden for you. Apart from this you should also cut down the other cards like departmental store card, gas card etc. Try to purchase all your requirements by using one credit card. Don’t use all of your credit cards at one go.

Try to keep record of your expenses: The concept of writing down your each and every expense made by your credit card will really help you to get out of your credit card debt. This is one of the most beneficial key for you to stay out of debts. The main reason to be in debt is that you spend more money and don’t have a record of it. It is for sure that if you purchase something in single day then definitely it will not be the reason to be in debt, spending money each and every day for long period of time and without keeping record of it is the reason to be in debt. So, it become really very essential to keep record of what you spend every day to bring down your daily expenses which on the other hand will help you to stay out of debts.

Credit Counseling: If you really desire to get out of credit card debt then it is better to go for any credit counseling offered by some reputed Consumer Credit Counseling Service (CCCS).

Debt negotiation settlement

Debt negotiation settlement

Debt negotiation settlement

Debt negotiation settlement

Sometimes, a few compelling circumstances make a person unable to clear his dues in time. This makes the situation worse over a period of time as compounded interest factor increases the debt burden further. In such situations, the highly indebted person is left with few options, debt negotiation settlement being one of them. The process of debt negotiation settlement is performed with the help of a qualified and experienced debt counselor who negotiates on your behalf with your creditors. Normally, the creditors agree to such type of negotiations as they realize that it will be expensive and time consuming for them to recover their dues through the intervention of the court. There are different types of unsecured debts like credit card dues, student loans, medical bills, store cards etc. which can be successfully settled in your favor through negotiations.

You have to devote some time to find a trusted and suitable debt counselor for you who can win a beneficial negotiation for you and help you to pay off your debts easily. With the help of a fruitful debt negotiation settlement, you can be able to save a considerable sum every month which can be utilized towards some other expenses to save you from taking another debt. You should properly verify the credentials of the proposed debt counselor with the Best Business Bureau or with the office of the Attorney General so that you can find a reliable counselor. With the selection of a competent debt counselor, you can be sure to get a rewarding negotiated settlement in your favor and you have to pay lesser amount than what you would have paid under original terms of the debt.

If a person is so much indebted that he is ready to file for bankruptcy, he should try the option of debt negotiation settlement as bankruptcy damages your credit permanently whereas in the case of debt negotiation, your credit scores are temporarily affected. By paying your instalments regularly as per fresh agreement after negotiations restores your credit rating and if you are able to repay the entire debt well within the stipulated period, you can get even better credit score than earlier. As creditors also prefer to negotiate with the debt counselors, your task is made easier. Debt negotiation agencies have financial experts who are well versed with the different aspects of debt settlements.

Debt consolidation program

Debt consolidation program

Debt consolidation program

debt consolidation

A debt consolidation program is program in which a bigger loan is acquired, generally at a lower rate of interest to pay off other smaller loans. Like every debt relief options debt consolidation program has its pros and cons. When one opts for this program, he does away with all the paper work and tediousness of each and every loan. The person knows how much exactly he has to pay each month and on which date.

That apart, this kind of a program also helps one to save cash over a long period of time. By converting loans of high interest rates to those of a lower interest one, one is definitely able to save certain amounts which would otherwise have gone for paying the interests.

The important point to remember here is that a debt consolidation program only shifts your outstanding from one loan to another; it does not eliminate your debt. One has to pay back the loan in any case, even if you have opted for the same.

At times it might also happen that when a consumer realizes that he has only a small outstanding left as compared to what he can manage, he can get into the vicious circle of purchasing more and more and increasing his outstanding continuously.

For hunting for a suitable debt consolidation provider, one can negotiate with his own bank to extend a loan, since he already has a relationship with them. He can also ask a bank with whom he is not associated with, for the same, and they might be willing to do. That apart, one can also search the net for companies offering debt consolidation program, but one needs to be very cautious while doing so. At times one also gets mailers from companies who offer these kinds of programs.

Getting into the trap of fraudulent company can amplify the consumer’s headache rather than decreasing it. Whichever way one chooses for his program, he or she needs to do thorough homework for the same. Talk to all the possible channels before settling for this kind of a program, research on their reputation, the fees charged and the kind of offers that they might have for you. Mull over all the aspects carefully, and then decide upon the party.

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.