How A Debt Settlement Attorney Can Help You Write Off Debt

August 4, 2010 By Leave a Comment

Are you struggling to keep up with the minimum payments of your debt and worried about bankruptcy? Then what you need could be to have a debt settlement attorney help you back on track. This article is about how they work, so you are in a better position to make an informed decision about if this option is what you are looking for or not.

The goal for them is to help you come to an agreement with your creditors about paying a onetime amount of between 40% and 60% of the total debt and have them forgive the rest. Now this is obviously not a deal a credit card company is interested in if they can just keep receiving the minimum payments every month. So in order for them to even consider making a deal like that you have to be at least four month behind on your payments.

When you start working with a debt settlement attorney he will ask you to stop paying to the loan and start saving up money for the lump sum. But when you stop paying your creditors will start calling and try to collect their debt. However if you hire professional help all communications will go to them, saving you the worry of having to deal with it.

The negative aspects of this solution are that it will affect your credit score and it cost money to get professional help. Your credit report will show the late payments even if a deal is made and the actual debt will be noted as “settled”. This will affect your chances at getting a loan in the future. Another issue you need to be aware of is that a large percentage of the money you save by making a deal might end up only covering attorney fees.

A debt settlement attorney can help you write off debt, but the negative aspects makes it better to pay off your debt in full if you are able to, but it’s still better than bankruptcy in many cases.

Filed Under: Credit Cards, Finance, Get out of Debt Tagged With: , ,

Climbing Out of the Recession With a Bad Credit Score

July 26, 2010 By Leave a Comment

Having a bad credit score is not uncommon these days. Considering the recession we are now climbing our way out of, many people are in need of financial repair. For whatever reason, be it a job lay off, unforeseen medical expenses, or perhaps they are a new college grad with zero credit and tens of thousands of dollars in student loans to repay, bad credit lenders are a resource to consider.

A low credit score sends a message to the bank or lending company you are soliciting. It is a negative message no matter what your personal circumstances are. Most established banks will not deal with you because your low score is immediately interpreted as a financial risk. Whether your low score is due to financial irresponsibility or not all lenders will need to protect themselves from the slight possibility that you may default on a loan if it is extended to you.

If you decide to apply for a bad credit loan, expect a higher than usual interest rate and strict terms and penalties. However, if you should get through the process and repay the loan on time and without incident, expect an improvement in your credit score. The cost may be high but the payoff is worth every penny.

Your first order of business should be to inspect you credit reports and know what your score is and why it is low. Check all reports from the three national reporting agencies. They will be different and most likely find errors your first time around. These can be contested and removed. Make sure all entries are up to date and make note of all reported late payments. Take the time and expend the effort to get all your debts up to date. Another tip is to curb your spending for at least three months before applying as some lenders will look at your bank accounts and make note of your spending habits.

A bad credit score may be a downer but it can be repaired. Due diligence and the right loan could get you to higher ground.

Filed Under: Credit Cards, Finance, Get out of Debt, Loans Tagged With: ,

Are Debt Consolidation Loans a Good Plan?

July 26, 2010 By Leave a Comment

Getting tired of seeing all those unpaid bills pile up month after month? Tired of the stress? Uncertain about how and when you’ll finally be able to get out from underneath all that debt? Well, you’re not alone and like many people, you just need some guidance. You will prevail and be able to get past this point in your life. It takes perseverance and the willingness to tackle the problem head on.

So, in looking to resolve your debt, what’s your best course of action? Well, the best option to eliminate debt altogether is through a debt consolidation loan. Its basic premise is to take all your debts and amalgamate them into one monthly payment. Many people use debt consolidation loans to combine credit card debt, student loans, car loans or even credit lines into one monthly bill. It allows individuals to better track their money while still being able to save for a rainy day.

It’s easy to get carried away and get addicted to living on credit. In some cases it’s gradual and happens over time. In other cases it’s merely a result of being faced with an emergency and lacking the necessary funds. Regardless of the reason, many people today are living paycheck to paycheck and paying only the minimum required on their credit card balances and outstanding loans. It’s a recipe for disaster. Interested in knowing how a debt consolidation loan can help you start over?

Debt consolidation loans reduce debt by reducing interest rates:

The immediate benefit of a debt consolidation loan is that it immediately reduces the interest rates on your outstanding balance owing. In some case that interest rate can be cut in half! With some credit cards charging anywhere from 17% to 24% in monthly interest rates, there’s simply no reason not to consolidate your debts. In a number of cases individuals save thousands of dollars a year in interest rate charges with a debt consolidation loan.

Debt consolidation loans help repair your finances and improve your credit rating:

Trying to pay all those bills at one time is an exercise in futility. At some point you’ll miss a payment and that will negatively impact your credit rating. It’s common for someone to have an excellent credit rating their entire adult life, only to be burdened by debt and see that credit rating plummet. Your credit rating is essential in ensuring you have access to credit and loans. Whether it’s to buy a house, a car, or just applying for that additional credit line, at some point you’ll need credit. Debt consolidation loans help individuals repair their credit rating gradually. It helps to establish consistent payments over time and that repairs your credit rating.

Applying for a debt consolidation loan is the most important step in resolving your debt. Over time your balance will be decreased and you’ll begin to improve your credit rating. You’ll save thousands of dollars over the life of the loan and be able to have a little extra for yourself when you need it most.

Filed Under: Finance, Get out of Debt, Personal Finance Tagged With: , ,
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