Archives for May 2013

How does “settled for less than full balance” affect your credit?

If your goal is to get out of debt, then you are likely to consider a settlement plan as a solution that can help. A debt settlement plan is a useful way to get your financial situation back on track if you are struggling with high-interest, unsecured debts. Despite the fact that it can help, you need to understand how the process works and the impact it will have on your credit rating before you are able to make an educated decision about your debt relief solutions.

How Settlements Work:

When you settle for less than the full balance on an unsecured debt, you are eliminating the debt through a negotiation process. You ask the creditor on the account to forgive part of your debt in exchange for you paying a lump sum of cash for the proposed amount. The creditor agrees to your proposal, and then you make the payment. After the payment, your account is considered settled, and you no longer need to make further payments to the creditor.

Before you can qualify for a settlement plan, you will have defaulted on your debts. Creditors will only accept a proposal if you are not making payments because you are struggling to manage your current expenses. If you are not struggling with your payments, then the creditors will expect you to continue making monthly payments.

The Impact on Credit:

When you decide to settle your unsecured debts, it will have an impact on your credit rating. By understanding the impact, you are able to make an educated choice about whether settlement is the best solution for your situation.

Debt settlement will have a temporary negative impact on credit. While the impact is negative, you are not likely to see extreme changes. Since you must already be in default before you qualify to settle the account, your credit score has probably already taken a hit from the struggle to manage your debts. The settlement process will cause a drop in the score, but it is primarily the result of continuing to miss payments throughout the process of negotiation.

After the account is settled, you are no longer responsible to make further payments on the account. As a result, you can begin rebuilding your credit immediately.

In most cases, you will be able to apply for a new loan or credit card within 12 to 24 months. Since a settlement does not have the extreme negative impact of a bankruptcy, it is possible to rebuild your ratings within a relatively short period of time.

Other Settlement Benefits:

If you are looking for debt relief solutions, then settlement is the best option to help you get back on track financially. While it does have the short-term impact on credit, the benefit of immediately working on improvement is a key factor that sets settlement apart from other options.

Beyond that basic advantage, you will also have less stress when you start a settlement program. During the negotiation process, you strive to save to pay the lump sum. As soon as the amount is paid, you no longer owe money to the creditor. As a result, you will have less stress over time.

Settlement is not only applied to high interest, unsecured loans. If you have a high cost medical bill, then you can still work on a settlement plan. Any debt that is not secured with an asset is eligible for settlement, including your hospital bills.

Time is another benefit of settling. On average, you can become debt free within 24 to 48 months, depending on the number of unsecured debts you need to negotiate and the amount of funds you are able to save. Other debt relief solutions take much longer before you become debt free and do not save you as much.

Settling your debts for less than the full balance is a useful tool when you are struggling to make your payments. You do not need to continue struggling or worry that your credit will take a long-term hit. Settling has a temporary impact and offers you the ability to get your finances back on track.

Who Will Consolidate My Credit Cards With No Cash Up Front?

If you have run into trouble with your credit card debt, you may be considering a credit card debt consolidation loan to solve your financial problems. Lenders make offers of large sums at relatively low interest rates in order to transfer your debt into their hands. Besides offering a competitive interest rate, they also offer you the opportunity to turn multiple and confusing debts into a single monthly payment.

Who Will Consolidate My Credit Cards With No Cash Up Front?

The first difficulty that you may encounter with a loan is the initial fee that some lenders will charge. When you are already strapped for funds, it does not feel right spending even more to get a new loan. However, you may be lucky enough to find someone that does not charge any money up front.

Why This Solution Is Not Satisfactory

Ultimately, however, seeking a consolidation loan is not a good idea. It may be better than struggling on with your credit cards debts and outrageous interest rates, but it leaves you deep in debt. You simply change creditors and now have to hope that the new creditor will be fair with your debt. There is another solution to your credit card debt that could free you from debt and restore your good credit rating in just two years.

The Debt Settlement Option

Debt settlement is an innovative and aggressive approach to handling your credit card problems decisively. This solution is not for the faint-hearted. It requires you to take on the credit card companies and make your own demands. However, you will not be alone in this. Your debt representative will handle your case and help you settle a fair share of your debt and get your account closed for good.

How It Works

Debt settlement may be the perfect solution for credit card debts, medical bills and a few other types of financial liabilities. It all starts with a phone call or online chat with a debt settlement adviser. You let this person know about the extent of your debts and provide some details about accounts and company names. He or she will let you know if you qualify.

If you are a good candidate, you will have to make a choice at that point about whether or not to continue. The road to debt settlement can be unnerving, but the outcome is worth the trouble.

To begin the process, you stop making payments on your credit card debts. Instead of sending money to your creditors, you send a single payment every month to your debt settlement company. The money is placed in a special account that grows with each monthly payment.

Your creditors will begin to harass you for payment right away. Your debt adviser will recommend that you ignore all attempts to communicate and pass them on to the debt settlement company. Someone will act on your behalf and begin to make offers to your creditors with the money amassing in your account. One by one, your debt representatives will convince your creditors to accept lump sum payments in exchange for closing your account. Typically, debt counselors can buy off your creditors for as little as a fraction of the total amount owed.

When the last creditor accepts a payment, you will be officially free of credit card debt. Your credit rating will begin to recover. Some clients even get loan offers and credit card offers in the mail right after they close the last deal. The whole process may take as long as two to four years.

Comparison to Consolidation Loans

Debt settlement far outshines debt consolidation loans. First of all, you end up with no debt in just two to four years. Second, you pay less than what you owe. Third, your credit score recovers. This last economic transformation allows you to start your financial life over again.

Debt settlement is a great solution to credit card debt. It does not always work, but debt settlement counselors are getting better at this every day. Credit card companies are beginning to understand that they have to offer other solutions for people who are in over their heads.

Using Lending Club Personal Loans For Debt Consolidation

If you are like many struggling American families, then you have probably considered taking out peer to peer personal loans from companies like Lending Club to consolidate your debts. Debt consolidation via personal loans often seems like a suitable solution to many individuals, but it is important to understand what you are likely to pay and the potential downsides of the loan. Making an educated decision about your debt relief solutions requires an understanding of all the potential problems that might arise.

Basic Information About Lending Club Loans:

Lending Club is a peer to peer lending solution. As a result, the lender is an investor or group of investors who are willing to offer funds to men and women who are unable to obtain traditional funding or who want to work with an individual rather than a lending institution.

Lending Club uses underwriting to determine the risk that borrowers present to the investors. As a result, many individuals are either denied loans or are offered high interest personal loans that help counter the supposed risk of default that the investors might face. This means that if you want to consolidate your high interest unsecured debts with a loan from Lending Club, you can expect that you will end up with a potentially high interest rate despite the requested interest rate you make.

The way that Lending Club determines the interest rate that is most suitable for your situation is via your FICO score, the current debt to income ratio, the length of time you need to pay the loan, and the amount you are trying to take out. When you make a request for a loan, you are able to state the amount you would prefer to pay in interest. Unfortunately, you are not guaranteed to receive the interest rate you request.

APR Interest Facts and Other Fees:

Since the interest rate is often determined by the risk underwriters in Lending Club suggest an individual is likely to provide, you need to understand the rating system and how it impacts a personal loan for consolidation.

If you are struggling with your minimum payments and need a consolidation loan or service, you have probably faced missed or late payments on your account. As a result, your FICO score is impacted by the struggles you are facing. Underwriters will issue a grade from A to G and then further categorize your risk from one to five within that grade.

A classification of A1 will end up with the best loan interest rates and origination fees while a classification of G5 will result in the highest interest. If the risk does not fall into any of the loan classification standards, you will find that the loan is denied.

After the reduction to your FICO score and the credit history that shows recent missed or late payments, you can expect to fall somewhere in C to G rating categories, depending on your particular credit information. This means that you should expect to have loan interest rate offers between 14 and 25 percent.

Beyond the interest rate, you are also required to pay an origination fee with your new personal loan. The origination fee for categories C to G are roughly 5 percent of the loan amount. This adds to the cost and can bring the total interest and charges to as much as 28 percent on your loan.

Consolidation Without Loans:

While Lending Club might have plenty of promise as a peer to peer lending solution, you do not need to take out a high interest personal loan to consolidate debts. The high interest you are likely to pay for the personal loan through Lending Club will not help your situation. If the interest rate does not decrease from your original unsecured loans, it is not enough to make your monthly payments low enough to manage.

Consolidation does not necessarily mean taking out a loan. Consolidation services from a debt relief company work through negotiation instead of providing loans. This type of service does not require that you have excellent credit or show a low risk of default. Instead, it requires that you are willing to work on completely paying off your loans.

Negotiation discusses the problem with current lenders and will put your current revolving accounts on hold. This helps prevent a debt trap that is commonly associated with taking out a loan to pay the other debts. During the process, the negotiator will discuss the possibility of settling the account for a lower principal so that you save as much as possible and are able to pay off your debt within two to four years.

Lending Club may not be the best solution for debt consolidation because of the high rates and potential for denial. If you want to consolidate or settle your debts, fill out the form on now or call us for a free debt analysis.

Selecting The Right Debt Relief Services

Debt isn’t a problem specific to Florida. It is, however, a bigger problem in Florida than the national average. In 2010, only one in 50 households had credit card debt exceeding $20,000 nationwide. Comparative statistics from Florida place more than 63 percent of individuals with more than $20,000 in credit card debt. It’s no wonder that so many citizens are seeking effective solutions for selecting their best options in the realm of debt relief services. Add to that the reality that the average Florida resident is about 1.8 months behind on their bills and the situation can be pretty scary.

Sadly, nothing is scarier than when those statistics and facts stop being something you’re reading about and start being something you’re living. When it’s staring back at you from mountains of late notices in a rainbow of glaring, warning colors, the weight of the burden is crushing. When you can’t answer your phone and contemplate changing your number, it’s time to do something about your debt, something that takes the particular limitations and stresses of Florida debt and credit laws and provides you with real, solid solutions.

Every Cloud Has a Silver Lining

Fortunately, Florida has made a great deal of effort to protect debtors from unsafe or harassing debt collection policies. Despite this, even those who stay well within the limits of legal harassment are enough to drive the average person insane. To call their tactics aggressive is putting it mildly. The good news is that you can take control of the situation. Get your debt under control and stop all of those harassing phone calls without having to go further into debt in order to bail yourself out. The idea of minimizing your debt by taking out a loan, which is just another word for debt, is just nuts. You’re just digging yourself in deeper than you were before!

The good news is that there’s another, better way to do exactly that and we’re going to show you how.

Let Us Help You Negotiate & Settle

Let’s take a moment to explore the ways we may be able to help you minimize your debt. DISCLAIMER: Please understand that everything that we can do is something that you could do yourself, it’s just an extensive and in-depth process that takes a little time to master. There is no secret formula. We just do what works. We contact your creditors individually, negotiate down each of your debts and have you paying them off in no more than 24-48 months, versus seven or more years in the world of bankruptcy. However, you must understand that with settlements, there are no “payments.” Time is taken to haggle with the creditor and once they agree to a settlement amount, the entire amount is due. With negotiations, however, not only do we negotiate down the amount of money you owe on the account, we create an arrangement for you to pay it off over a designated period of time per our terms of agreement.

What Are You Waiting For?

If you’re sick and tired of dodging phone calls and hiding from your bills or if you’re sick of the stress and headache of an enormous burden of debt, help is just a phone call away. Florida debt relief services are available. Right now, you can call to take advantage of a free debt analysis. We’ll take the time to explain how to use settlements to reduce your balances and not just APRs. If you don’t have time for a phone call right now, we also offer a convenient online form that gets the debt negotiation process started. Remember: Every day that you delay equals more money you have to pay. Quit procrastinating. Call or fill out the form today to start paying off your debt once and for all.

How To Get Medical Bill Debt Relief

Dealing with major medical issues can be one of the most terrifying things that you will ever go through in your life. Unfortunately, on top of not feeling well, missing work, and keeping up with doctor’s appointment and prescriptions, many people also have to figure out how to keep on top of all the doctor’s bills.

Doctor and hospital bills can be some of the most confusing bills to keep up with. Bills are often sent from multiple specialists, and it is very common to receive ten or more bills from the same hospital visit. Furthermore, it can seem as if there is no sense to what is being charged. This isn’t just in your imagination, multiple government studies have shown that patients going in for the same procedure can be charged wildly different amounts.

With all these problems, it’s no wonder that medical bills are the leading reason for people filing for bankruptcy. If you’re having issues keeping up with your medical bills, however, it is important to realize that bankruptcy is not your only option. In fact, a lot of people have benefited from going through the process of debt settlement with their hospital bills.

Debt settlement starts when you consult with a professional about your bills. This person will determine how much you owe and who you owe it to. After this, he or she will be able to start negotiating with the hospitals, clinics, and labs that you owe money to. The goal of these negotiations is to lower the total amount that you actually owe on these bills.

While many services will offer to negotiate hospital bills on your behalf, most of them simply work with the hospital or clinic to set up a payment plan. With debt settlement, these bills are actually reduced or eliminated.

The reason that this works is that hospitals know that there is a high likelihood that someone who is having problems paying their bills will stop making payments. This leaves the hospital with no money for their services. By agreeing to lower the bill, they have a much better chance of collecting something for their services instead of nothing.

Furthermore, hospitals are often open to negotiation because they negotiate the fees for a lot of their services with insurance companies. In fact, many services provided by hospitals are discounted 70 percent or more for insurance companies. Through debt settlement, a negotiator can save you thousands of dollars simply because they know the amount that other people have been charged for the same services or procedures that you received.

Because the hospital still receives money for the procedures it performed, they will still be willing to treat you in the future. This is critical if you are suffering from a condition that will require ongoing hospital visits and care. In some states, filing bankruptcy or failing to pay the hospital for their services can result in the hospital having the legal right to deny you care if the condition is not life-threatening. By going through debt settlement, the hospital will no longer show the debt as outstanding, freeing you up to continue to get treatment.

Making sense of hospital bills can be confusing, and there are a lot of more important things that you need to worry about when you’re sick. Talk to a debt settlement professional about getting your hospital bills under control.

Debt Consolidation Loans For Bad Credit Scores 580

If you have a credit score that is 580 or below, you might worry about the potential to obtain debt consolidation loans to meet your needs. This is particularly true when you are thinking about consolidation loans to pay off high interest debts. While you might hear of loans for bad credit scores of 580 or below, it is important to understand what these loans are and the downfalls of taking this type of loan to clear high interest debts.

The Available Loans:

The credit consolidation loans for bad credit scores of 580 or below are usually a type of unsecured debt that targets men and women who have faced past struggles with their financial responsibilities. While the lenders might advertise loans for those who have a low credit score, the actual loans are not what many homeowners or renters expect when they are looking for a solution.

In most situations, the loans designed for those who have bad credit are predatory in nature. The interest rates are usually not affordable and might create a bigger problem when you are already struggling with debt payments.

While the particular interest charges will depend on your situation and the exact credit score you have, a high rate is particularly common if your score is less than perfect. For example, you might receive an offer of a debt consolidation loan that has interest charges as high as 20 to 30 percent. Obviously, an interest rate of 20 to 30 percent is not likely to bring down your minimum payments on other debts and thus is not suitable for any particular need you might have.

If you turn away from the traditional loans and seek out short term solutions, you will end up facing an even bigger problem despite the small loan obtained. Payday loans are difficult to pay because the interest rates at as high as 300 to 800 percent, depending on the lender’s fees.

The Consolidation Loan:

If you are facing problems paying your minimum payments, you might consider a debt consolidation loan. Unfortunately, with a credit score of 580 or less, you will struggle to find a lender.

While lenders do have different cut-off credit scores, in most situations a consolidation loan will require excellent credit. A FICO score of 700 or greater is usually a requirement for most lenders. With a score that is far below the common cut-off of 700, you are not likely to find a lender who is willing to offer reasonable interest rates or who will approve the loan.

Beyond the difficulty of obtaining the loan, it will also create more problems. A consolidation loan does nothing to help you regain your financial balance and spot those spending habits that resulted in debts you struggle to pay.

Consolidation and Settlement:

If you are facing a bad credit score and your minimum payments are hard to manage, you do have solutions that do not require a new loan. You can obtain consolidation through a negotiation service instead.

Consolidation through negotiation does not require excellent credit because you are working directly with your current creditors. Since you are not taking out a new loan, your credit rating is not as important.

The professionals who work for a negotiation service to provide debt relief will discuss your situation with the creditors. During the process, you will see that your monthly payments decrease and the interest charges either stop or become much lower.

The ultimate goal of the service is debt reduction. As a result, the negotiation will go a step further and strive to settle the account. Depending on the amount of debt you have and your particular situation, it is likely that you might save a large amount of the total debt principal.

During the negotiation process, you will save up a lump sum of cash that pays off the creditors at the end of the program. Once paid, the creditors will no longer order collection calls, and you are able to avoid bankruptcy.

Debt settlement will have a temporary decrease in your credit score, but it is possible to start working on improving the rating immediately after settling the accounts. Furthermore, you will no longer have those debts.

Paying off the debts will free up more money each month so that you can keep up with your mortgage and other expenses. By paying regularly on your other bills, the credit score will increase over time.

A bad credit score will limit your debt consolidation loan opportunities, particularly if you want the funds to consolidate high interest debts. Fortunately, you do have other debt relief solutions that do not require a great credit rating to make use of the program. If you want to learn more about consolidation through negotiation services, call or fill out the form for a free debt analysis and more information.

How To Get A Creditor to Reduce My Debt

Owing a large sum of cash to a creditor is a stressful situation, especially if your financial situation has changed and you are no longer able to make the monthly payments on the account. If you owe more than $10,000 to a creditor, then you do have options to reduce the debt by negotiating with the creditor. The process of getting your financial situation back under control starts with understanding your options and working with your creditor to reach a solution.

Organize Your Data:

Before you start working on a debt relief solution, you need to get everything organized. It is not possible to settle an account for a lower sum if you do not know the exact amount of money you owe or if you do not have the data available to show that you are not able to make the payments.

Getting organized means that you get as much information as possible together related to your financial situation and the amount of money you owe. If you owe more than $10,000 to a creditor and want to settle the account, then you must have the information showing your financial situation available to make the point that you are struggling and cannot manage the payments.

Learn About Your Debt Consolidation Options:

Before negotiating with the creditor, you need to understand your options. The most common options available to reduce unsecured debts include obtaining a loan, filing for bankruptcy and settling the credit card account.

If you owe more than $10,000 to a single creditor, then consolidating is not an option in your situation. Debt consolidation occurs when you have several unsecured debts to many different creditors. Even if you owe more than one creditor, consolidation is not the best solution because it is usually only a temporary measure.

Taking out a loan is an option, but it is usually not a good choice. In most cases, a personal loan used to pay other debts is not worth the cost. If you owe more than $10,000, then it is likely you will end up paying more to interest when you take out a new loan. The lender will look at the current debt to income ratio and your current credit rating before offering funds.

If you are eligible for a loan, then you are also likely to pay more in interest for the funds than the original debt. Many personal or consolidation loans charge as much as 20 to 30 percent. On top of the interest, the loan will require paying closing costs and other fees, which can add unexpected expenses.

Bankruptcy is another potential option, but it is best reserved as a last resort if a settlement is not an option. The reason you should avoid bankruptcy is that it will remain on your credit report for ten years. This can impact your ability to get a new job, take out a mortgage or reach other financial goals.

Debt settlement is the process of negotiating with your creditor to reduce the amount you owe. Professional negotiators will discuss your situation with the creditor and ask for a reduced payment. In exchange for paying a lump sum of the reduced amount, your creditor agrees to forgive the remaining amount on your account.

Settlement Benefits:

The best way to reduce your debt if you owe a large sum of money to a creditor is through settlement. Since settlement will result in forgiving the remaining amount of debt, you can begin taking immediate action to rebuild your credit history.

Settlement has a temporary impact on your credit score. It does not have the same negative association as a bankruptcy, so it is possible to begin rebuilding the credit score and history immediately after the lump sum is paid and the creditor forgives your account.

The obvious benefit is that you will pay less than you owe, which provides relief if you are struggling with your debts. In most cases, you can settle the account within 24 to 48 months.

Getting a creditor to reduce your debt if you owe a large sum is primarily about negotiation and settling the account. Settling the debt will provide the relief you need and avoids building a bigger problem in the future.