Posted by: Debt Relief : Category: 
In today’s economy many people suffer from debt issues and the need for a debt settlement Company has increased enormously. In this current generation people rely on credit cards and the high usage of credit cards ultimately leads to lot of debt. In order to get rid of debt issues and credit card debts everyone are looking for debt settlement solutions.
Need for Debt settlement companies
A debt settlement company finds an effective way to settle debts to the lenders and make them reduce certain percentage of outstanding balance with the borrowers. This process of debt settlement takes about 12 to 36 months of time and the debt settlement companies complete the entire process within that time. In this process, the borrowers are not allowed to contact lenders anymore instead they contact only debt settlement companies for any kind of issues. Entire communication should be done via debt settlement Company legally. The debt settlement companies contact the creditors and explain them about the debtors’ issues and speak to them in favor of the debtors.
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The debt settlement companies work hard to eliminate 40-70% of the original balances. Lenders co-operate with debt settlement companies as they are feared of bankruptcy. It is a serious problem for lenders to gain profit for their business because of bankruptcies. Once the consumer files the bankruptcies on the lenders, they will not get even single penny and hence lenders negotiate with debt settlement companies to get a fruitful result and at least 50% of the principle amount.
Working of a Debt Settlement Company
The borrowers have to sign the contract papers and “limited power of attorney” to the debt settlement company. After the contract is signed, borrowers are requested to make the monthly deposit to the settlement account which is used to repay the creditors or collection agencies. Now the debt settlement company starts negotiating with the lenders and when the deal is agreeable, the amount is transferred to lenders’ account. This procedure is followed till the agreement period gets over and entire amount is paid off with no balances.
Benefits of having a debt settlement company
The advantages of using the debt settlement services are
It helps the debtors to have a financial freedom
It improves the credit scores
It makes you debt free in a shorter period of time.
Hence by the reading the above content debtors can understand the need for a debt Settlement Company and know the benefits of joining such company. Debt Solutions Group has more information on debt settlement and solution programs which can help debtors to get rid of debt issues.
Watch the video related to debt settlement
Straight talk about debt settlement from a highly experienced industry executive.
November 18th, 2011 at 9:58 am
The worst thing that can happen to you is that you will lose the case.
If your wife doesn't have a job, they can't garnish her wages.
If you own Real Property, they can put a lien against it.
Otherwise, lawsuit judgements can also be "settled" if the creditor agrees. Just because the plantiff wins the case doesn't mean you have to pay the entire judgement amount-it just gives the creditor more options to come after your assetts.
November 18th, 2011 at 11:10 am
You already are aware of the main negative, in that you will likely receive a 1099 for the forgiven balance, and pay taxes on that amount. If they don't send the 1099, you may not have to worry about that (though your conscience might get you anyway).
If they're offering you 60%, they'll likely take 50%, maybe less. So try to hammer it down a bit more. Don't send one single penny until you have the entire agreement in writing, in your hands. They will screw you and try to collect the whole balance later if you do.
And don't just ask them to show it as paid. Ask them to permanently remove it from your credit report. They may refuse. If so, dispute it with the credit bureaus after it's paid. There's ALWAYS something inaccurate about the reporting, and the collection agency will likely not respond to the dispute on a paid account, so there's a good chance you can get it deleted permanently.
Last word of advice: Do not accept the offer unless you are 100% certain you can meet the payment schedule. Miss one payment by 1 day, and the whole thing is off. That'd really suck if that was your 3rd payment.
November 18th, 2011 at 11:35 am
The banks are not the true creditor, they sign nothing. You are the creditor when you gave them the application. Get them to sign a Declaration of Creditor Status and watch them run. You created the funds with the application, they have no skin in the creditor game so there is no privity of contract. They are probably making about 2m of your signature and give you a measley 10k of your credit. That is called unjust enrichment.
November 18th, 2011 at 11:38 am
Aren’t the credit card statements enough to prove their case? They always have the credit card statements. I just got a summons with the credit card statements included as evidence.
November 18th, 2011 at 3:16 pm
@Tuberidin01 YES!!! HAHA I totally agree, on the other hand I actually work for one of those “big” banks. Credit Unions ARE better and if you’re getting a credit card get one at A CREDIT UNION!!! I wouldn’t say this at my job of course lol, but by law credit unions can not exceed above an 18% APR. Also they usually don’t charge annual fee’s or any of the craziness that banks charge.
November 18th, 2011 at 5:35 pm
Most of the debt repair/consolation/settlement companies want their fees up front and leave you credit trashed.
Check nfcc.org for listings legit non-profit credit counseling services. They can help you set up a budget and work out clearing up your debt.
You can tackle your debt yourself by putting every extra penny on the highest interest rate debt, while making minimum payments on the rest. When the highest is paid, move to the next, till they are all paid off.
It will take 2 or 3 years but if you work at it, you'll be out of debt with a good payment history.
November 18th, 2011 at 9:29 pm
Possibly, but less so than a bankruptcy would. Many companies now check credit records. Various HR studies have shown that on average, people that maintain their credit the best also tend to be the best employees (for various reasons- they have less drama at home, they are more organized, they can manage resources better, or whatever). So if it negatively impacts your credit, it may keep you from getting a job, at least until it washes off your record in about 7 years time. But like I said, I'd far rather have debt settlement on there than a bankruptcy.
November 18th, 2011 at 10:37 pm
The answers above are both correct depending upon the specific debt settlement company used. Most debt settlement companies can make a request from the creditor to mark the account as paid as agreed or paid in full either way with a zero balance.
Credit implications in the future are tough to predict. He will be late on his accounts and may even wind up with collection accounts if the credit card companies sell the accounts. He may even be sued if the debt settlement company has poor relations with the credit card company. In his favor will be a drastically decreasing debt to income ratio considering that he will be paying his over all debt down faster than the average consumer hence increasing his FICO score and ability to borrow money.
Settlement letters can be seen with both sets of results at http://www.fdnsolutions.com/settlementletters and debt settlement is only for consumers in a legitmate financial hardship. My guess is that if your "friend" is able to pay his bills and enrolled in a debt settlement program its probably a case of over promising and later on under delivering. Have your friend ask for some results from the settlement company so that at least he can see some proof.
November 19th, 2011 at 2:51 am
@rayme4raw You may not have read my comments close enough. I’ve mentioned that I work for a credit union. Credit Unions “ARE NOT BANKS” they are member owned and not for profit. We are a member based co-op so the money we loan out to our members actually belongs to other members of our credit union. So when losers want to preach about demanding settlements for debts they have neglected on purpose… yeah they make me fucking sick because our responsible members suffer becuase of these losers.
November 19th, 2011 at 6:04 pm
@Tuberidin01 I’ve read your other comments, you have to be trolling for some big bank or third party collection agency.
November 19th, 2011 at 10:01 pm
Do not fall for these debt consolidation scams. The debt will still be there and also are your spending habits that got you there in the first place. You won't get yourself out of debt by borrowing. The only true way to get out of debt is to change your habits. One way is to get yourself enrolled in a good debt reduction program. There are many good ones to choose from. Sometimes it can be hard to choose the best one for you. You can visit the web site below for reviews of some of the best ones.
November 20th, 2011 at 4:11 am
Yes, it is too good to be true. Whether it is with a law firm or not, you will be wasting your money with a debt settlement company. I speak from personal experience and ended up paying more then if I attempted to settle the debt myself with the collection agency. If your debt is held by a collection agency, it is much easier and cheaper to deal with them directly to settle your debt. I have attached a link to a very good article about debt settlement companies.
November 20th, 2011 at 6:57 am
Excellent ! THANKS RICHARD!
November 20th, 2011 at 2:57 pm
Credit is a fake concept created by the bankers to enslave us and keep us in perpetual prison, but unfortunately credt history still exists. I was a victim of overbloated credit myself, struggled for months trying to get my credit score to respectability. Worst time spent EVER.
I was struggling with this, but my friend recommended a company that did all the leg work for him, and all they charged me was $40/year.
Give them a call if you got credit problems, They are AWESOME
888-338-3875
November 21st, 2011 at 7:10 am
The best thing to do is get a copy of "The Total Money Makeover" by Dave Ramsey.
Get yourself a written budget, where everything you make next month is spent on paper this month.
Nobody gets a dime until the essentials are paid for:
Food, shelter, utilites, transportation.
Then see what you can cut. Food = Beans & Rice. No restaruants, no steaks, etc.
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To quote from Dave Ramsey's web site:
History also teaches us that debt wasn't always a way of life. In fact, three of the biggest lenders today were founded by people who hated debt. Sears now makes more money on credit than on the sale of merchandise. They are not a store; they are a lender with some stuff out front. However, in 1910 the Sears catalog stated, "Buying on Credit is Folly." J. C. Penney department stores make millions annually on their plastic, but their founder was nicknamed James "Cash" Penney because he detested the use of debt.
Henry Ford thought debt was a lazy man's method to purchase items, and his philosophy was so ingrained in Ford Motor Company that Ford didn't offer financing until 10 years after General Motors did. Now, of course, Ford Motor credit is one of the most profitable of Ford Motor's operations. The old school saw the folly of debt; the new school saw the opportunity to take advantage of the consumer with debt. "
November 21st, 2011 at 11:40 am
Ewan,
DEBT SETTLEMENT IS NEVER YOUR BEST OPTION for eliminating credit card or other unsecured debt. Even if you happen to find a legitimate debt settlement company, there are some serious consequences and drawbacks, including…
- Short and long term damage to your credit
- NO GUARANTEE of results
- Very high and confusing fees
- Front-loaded fee schedules that delay progress in settling your debts, and
- Tax Implications (you will most likely receive a 1099 from your creditors for the amount of the balance reduction, which means you'll have additional income taxes due)
If you need assistance getting out of debt, a superior alternative to traditional debt settlement is Debt Resolution. Debt Resolution offers all of the benefits of debt settlement, but also either eliminates or significantly reduces the negative aspects mentioned above. Unlike debt settlement (which relies solely on the level of your delinquency to negotiate settlements), Debt Resolution leverages good faith debt laws to both challenge the amount of the debt owed, and provide legal protections for the borrower. Features include:
- Eliminate 55% of your unsecured debt (guaranteed in writing). Try asking a debt settlement company for a guarantee.
- Cut your monthly payments in half (or less)
- No interest charges
- No negative tax consequences (you won't get a 1099 from the creditor)
As an example, if you owes $12,000 in credit card debt, 45% of that is $5,400. If you can afford $600 per month, you can be out of debt in just 9 months ($5,400 / $600 per month). If you can only afford $200 per month, you can be out of debt in 27 months ($5,400 / $200 per month), and so on… The only other cost associated with the program is a one-time enrollment fee of $500 to administer the paperwork, get set up in the system, and establish the trust account from which the creditors will be paid.
That's it. There are no other costs or fees. Just a one-time $500 enrollment fee and 45% of the current balance, which can be spread over as many as 45 months, depending on what you can afford.
As for those well-intentioned contributors on the forum who suggest that you can do a debt settlement yourself… Well, they're right, you can do a debt settlement yourself. But guess what? You're most likely not going to settle your debt for less than 45% of the balance, which is the contractually guaranteed amount if you enroll in Debt Resolution. And guess what else? Unless you are familiar with the good faith debt laws and the laws of your state that govern credit card agreements – and you know how to leverage those laws to have the principal reduction considered a correction of the amount owed rather than a forgiveness of debt, you're going to receive a 1099 for the amount forgiven, and you'll have to pay taxes on it.
And what about suggestions of help through CCCS? Well, you can go that way if you want to pay 3 times as much and have the process take 2-3 times longer. You see, they're closely aligned with the credit card companies, and their goal is to get you to pay back as much as possible. Let's use the example above where you owe $12,000, and can afford $200 per month. With Debt Resolution, you'll be debt-free in 27 months. With consumer credit counseling ??? Let's say they reduce your interest rates to just 9.9%. If you were able to pay the $200 per month, it would take you 83 months to complete the program, and you would have paid $16,630 (instead of $5,400 !!!). But it's very likely that they would limit your term to just 5 years (60 months), in which case you would have to pay $254/month for 5 years (total of $15,262).
Quick question: Which sounds better to you… $5,400 and be out of debt in 27 months (at just $200 per month) OR $15,262 and be out of debt in 60 months (at $254 per month)?
But remember… DEBT RESOLUTION IS NOT THE SAME AS DEBT SETTLEMENT, and you CANNOT get these benefits from a debt settlement company.. Debt Resolution is a unique, proprietary process developed and perfected over many years by a former Deputy Attorney General of California with over 40 years of legal experience, including more than 15 years specializing in resolving debt.
For more information on Debt Resolution, you can visit:
http://www.BetterThanDebtSettlement.com
November 21st, 2011 at 3:24 pm
If sued, Elect Arbitration- JAMS and AAA.
It allows a Debtor to go on Offense, and charge creditor with $ Violations on FDCPA- FCRA, they break the law every time they collect a debt.
Debtor Boards advocates this, if U dont know your rights, you have none.
Get your case Out of Kangaroo Courts, elect Arbitration, it costs Creditors $3000-10000 to pursue it, most wont.
NAF- declared a Fraud and moratorium, Arb is now working!
Creditors have No note, Affadavit is bogus & $ Securitized
November 21st, 2011 at 8:04 pm
@clintosfan There a pros and cons to bank credit cards vs credit union credit cards. Here are my thoughts, if your credit sucks, yeah a credit union credit card may be your better choice because of their worst interest rate would probably be 18% or lower on the interest rate. If you went with someone like Capital One who loves to charge 24 or in some cases 32% default interest rates, and this was the best offer you had, then of course a Credit Union would be your better choice.