Help! Get me out of debt!

debt summary

Too much debt? Not enough money? What can you do?

Millions of consumers carry so much credit card debt that it will be almost impossible for them to ever repay the debt by making just the minimum payments.

Of course, the credit card industry knows this, in fact, they really do not want you to ever pay off all of your debt, because their profits come from the outrageous interest and fees they charge!

But if you have had enough and are serious about getting out of debt, here's a plan:


As long as you keep charging, you'll never get out of debt.

If you are serious about, cut them up, burn them, get totally rid of these monsters!


You should use a basic budget planner to help determine how much you have coming in (net, after all deductions) and how much you have going out.

If you total all of you balances, the average minimum monthly payment required will be about 2% of the balance.

Example:  If you have $10,000 of total credit card debt, at 2%, your minimum payment would be about $200/month.

If you have enough left over to make more than the minimum payments due on all of your cards, great! (If not, we'll show you what to do later.)

List all of you cards by:

  • Balance
  • Interest rate
  • minimum payment

Let's say you have $300/month to apply to your credit card balances.

Take the lowest balance and pay the minimum due and add an extra $100.  Pay the minimum on the remaining cards, for a total of $300.

Once the first card is paid off, apply the minimum you were paying on it plus the extra $100 and pay that toward the next.


Card 1 has minimum of $50.  You pay $150 until the balance is $0.

Card 2 has a minimum of $100.  You know pay $150 (minimum of first plus $100) plus the usual $100 for a total of $250.

When it is paid off, you do the same for card #3.

You won't pay them off over night, but you'll probably cut 7-10 years and save thousands in interest and fees.


The you will need to contact a professional Debt Management Company to determine if you should enroll in a Debt Management Program Debt Settlement Program.

In a Debt Management Program, your creditors agree to reduce the interest rates and fees.  You will make one payment monthly (probably close to the $200) and it will be disburse to each creditor according to the agreements.

It will probably take about 48 months or so to pay off all of your cards.


Then you will most likely be enrolled in a Debt Settlement Program.

Credit card companies will charge off delinquent debts after about 180 days.  These accounts will usually be transferred to a debt collection agency. 

At this point, a settlement of approximately 50% of the balance is possible.

Although it is possible to do-it-yourself, debt settlement takes a lot of time and dealing with professional debt collectors can be very frustrating.

If none of these work for you, then you may consider seeking the advice of a bankruptcy attorney. 

Tags: credit card debt, debt settlement, best way to eliminate credit card debt, debt elimination without bankrupcy, alternatives to bankruptcy

Debt Elimination Plan

debt elimination planWhat is the best debt elimination plan?

  • A new year
  • Too much unsecured, credit card debt
  • Time for a plan

The holidays are almost over and for most people, they find themselves with more credit card or other unsecured debt than they can handle.


Know exactly where you stand, financially.

The first step in any debt elimination plan is to take the time to complete a thorough BASIC HOUSEHOLD BUDGET.

Be honest with yourself!

If you are spending $100/month on stuff like:

  • Starbucks
  • Fast food
  • Video poker
  • other non-essential stuff

Maybe it is time to get tough on yourself and make some cuts!  If you are serious about eliminating debt, this is critical!

Attack the Credit Cards!


Are you serious about you Debt Elimination Plan?

Then it's time to destroy those cards!  Keeping those cards available will only lead to more debt.

The credit card industry preys on people by offering:

  • Easy credit
  • Low monthly payments
  • Earn "points" to be used to buy more stuff!

What they don't tell you is that if you only make the minimum payments due on the cards, you will most likely end up paying back 3-4 times the original amount you borrowed and may take you 10-15 years to do so!

Know what?

Each case will be different (that's why it is so important for you to complete the BASIC BUDGET WORKSHEET.

Let's say you have $25,000 of total credit card debt.  With the average credit card allowing you to only pay 2% of the balance, your total minimum payment would be $500/month.

Let's say you have $650 at the end of each month:


Although there are many "Snowball Plan Calculators" available online, the concept is simple:

Apply the extra $150 to the lowest balance while keeping up with the other card's minimum balances due.

Once this card is paid off (you'll be surprised to see how fast), then take the extra $150 PLUS the normal minimum balance you were paying on that card you just paid off PLUS the normal minimum payment on card #2 and apply to card #2.  

If you keep this going (always a total of $650/month), you will get these cards paid off in an average of 48 months or so and save thousand of dollars in interest and fees!


But, what if you don't have any extra money at the end of the month?  In fact, you can barely make the minimum payments now!

Then you are should seek the help of a Debt Management Company that can evaluate  (for FREE) your situation and recommend the proper program.

If you are serious about a Debt Elimination Plan, you will find a way to be DEBT FREE!



Tags: debt calculator, debt relief programs, best way to eliminate credit card debt, alternatives to bankruptcy

I need debt settlement advice!

too much debtA prospect wrote, "Christmas is over and I charged too much!"  Can you help with debt settlement advice?

When someone calls and tells us that their credit card debt has grown to a level where they cannot keep up with the minimum payments, they are in serious trouble.

Bankruptcy should be the last option, so what can they do?

First, we advise that they should get a clear financial picture of their situation.  They need to complete a BASIC BUDGET in order to find out exactly where they stand.

Next, it's time to be honest with yourself.

If your net disposable income (net left over after all bills are paid, excluding credit debt) is less than the minimum total payments required on all of your credit cards, then you really only have 3 options:

1.  Do you qualify for a Debt Management Program?  If you do, then you will have ONE MONTHLY PAYMENT that will be disbursed to each of your creditors according to agreements made with each creditor.

Some creditors will reduce the payment, interest rate and fees to allow you to pay off 100% of the balance over approximately 48 months.

Your creditors will NOT be calling you and according to FICO, being enrolled in a debt management program IS NOT A FACTOR of your credit score.

If you qualifiy for a debt management program, it would be your best option.

2.  If the total payment of a debt management program is still too high, then DEBT SETTLEMENT may be your best option.

Debt Settlement is a program designed to negotiate reduced payoffs on you unsecured credit card debt.  usually, the settlement is at 50% or so.

Instead of making regular monthly payments to your creditors, you will save an amount each month that your budget can handle. 

If you are not disciplined enought to leave this account alone, you may need to seek the help of a professional Debt Settlement Company.

Once a settlement has been negotiated and payment completed, the account will be listed on your credit report as "settled" or "settled at a reduced amount" or something like that.

People always ask, "Will this hurt my credit score?"

At this point, that should not be a consideration.  The goal is to get these creditors "paid off" and not have to file for bankruptcy!

There will be time to improve your credit score later.

If you cannot qualify for Debt Management or Settlement, then your only option may be bankruptcy protection.

Make sure to seek the counsel of a bankruptcy attorney who specializes in bankruptcy.

Tags: best way to eliminate credit card debt, debt relief solutions, debt elimination without bankrupcy, alternatives to bankruptcy, debt consolidation vs. debt settlement, debt settlement help

What is the best way to eliminate credit card debt?

debt reliefWhen faced with too much credit card debt, you really only have 5 options:

1) Continue to make the minimum payments required by each of your creditors. 

Very few consumers understand that the Credit Card Industry does not want, nor expect you to ever fully repay your accounts!  Billions of dollars of interest and fees are earned from the millions of consumers who only pay the minimum payment each month.  It is estimated that in takes the average consumer 15-20 years to repay a single account at a cost of 3-4 times the total amount charged!

2) Home equity loan or line of credit with your home as security.

This type of loan places your most important asset at risk.  If you have sufficient equity can afford the monthly payment, this option may be viable for you.

The problem is that most consumers, who have a serious financial condition due to too much credit card or unsecured debt, usually will not qualify for a consolidation loan.

If you do qualify and secure a consolidation loan, remember, failure to meet the obligation of the 2nd mortgage could result in you losing your home! Be very careful in choosing option #2.

3) Debt Management is a program designed to help you pay off your unsecured debt in about 4 years with significantly lower interest rates and finance charges.

Agreements are established with each of your creditors.

  • You will have one monthly payment that will be distributed to each creditor according to the agreement negotiated by the Debt Management Company. 
  • This payment is may be slightly higher than your total current payment as the minimum payments most companies require is only 2% of the balance and in a DMP, the payment is usually higher.

Will this hurt your credit score?

According to Fair Isaac Corporation (FICO), being enrolled in a Debt Management Program is not a factor in your credit score.

4) Debt Settlement Program (DSP), is a program designed for those who are…

  • Facing financial hardship due to circumstances beyond their control.
  • Have considered a Debt Management Program, but cannot afford the monthly payment.
  • Do not want to file for bankruptcy.

Clients who qualify for a DSP have fallen behind on their payments or most likely, will do so in the near future. 

The objectives of a DSP are basically twofold:

  1. Negotiate settlement agreements with your creditor, usually for substantially less than you owe.
  2. Help you become DEBT-FREE without seeking bankruptcy protection.

 As the saying goes, "if all else fails...":

5) Bankruptcy should be your last and only option.

The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 launched a new era:  With limited exceptions, people who plan to file for bankruptcy protection must get credit counseling from a government-approved organization within SIX MONTHS BEFORE they file.  They also must complete a debtor education course to have their debts discharged.

Bankruptcy is a drastic decision and should only be considered after seeking the advice of a competent bankruptcy attorney.

In the midst of our country's financial crisis, you are not alone.  Maybe you should consider seeking help.

For a FREE Analysis that will help guide you to the right decision, click here.

Tags: credit card debt, debt settlement, best way to eliminate credit card debt, debt elimination without bankrupcy, alternatives to bankruptcy

I received a summons. What can I do?

credit card help

HELP! I received a summons for my credit card.

What can I do?

First, don't panic! 

  • You are not going to jail
  • You most likely will not have to go to court
  • If this was an unsecured debt, no one is going to come take your personal property
  • The creditor is not going to garnish your wages...unless you ignore the summons
  • For the time being, your bank account is OK

OK, so now what?

Somewhere on the first part of the summons it will tell you that you have 20 or 30 days from receipt of the summons to ANSWER the complaint.

To answer means that you file a reply with the court explaining why you don't owe the debt, THAT IS, IF YOU DISPUTE THE DEBT.

But in this case, you owe it, you just don't have enough money to make the payments.  To answer DOES NOT mean to explain why you are in a hardship position, financially.  So don't waste your time or money filing an answer.

Instead, contact the attorney who filed the claim for the creditor.  Ignoring the summons is not a good idea!

But before you do, take time to write down all of your net income and expenses so that you will be able to explain why you cannot keep up with the payments at this time.

It might be helpful to use a basic household budget. 

For a free copy, click here.

If you had about 50% of the balance somewhere, you could make a settlement offer and most likely they would accept it.

But, most people do not have that kind of money available or they wouldn't be in trouble in the first place!

So, let's say that your minimum payment was supposed to be $125, but you can only realistically afford $50.

Offer to pay $50/month if they will stop the interest and finance charges.

If the monthly interest and other charges (late fees, over-the-limit fees, etc.) are more than $50/month, it doesn't make sense to send them $50.  You wouldn't get anywhere!

If they accept the offer (most likely will come back at you with a counter offer), MAKE SURE TO GET IT IN WRITING.

This is critical to protect you in the future.  Many people agree with a service person, authorize a check-by-phone, make several payments, and when the check on the account, find out that nothing from the original account agreement was modified.


Once the agreement is set, do not miss a scheduled payment.  This is usually grounds for voiding the agreement and you are back to square-one!

If you can't afford anything, then you may want to consider bankruptcy protection.

Although bankruptcy should be your last option, it is not the end of the world.

Seek the advice of a bankruptcy attorney (one who specializes in bankruptcy) before proceeding.

You may also want to consider other options such as Debt Management or Debt Settlement.


Be proactive and most likely, you'll work something out.



Tags: wage garnishment, debt relief solutions, summons, alternatives to bankruptcy, stipulated agreements

Need help with credit card debt?

If you need help with your credit card debt, you are not with credit card debt

Many people, just like you, face a financial crisis from time to time.  It could be caused by personal or family illness, loss of job, cut in pay or just overspending.

As bad as it may seem, it can be overcome.

The first step you must take is to get a realistic financial picture of where you are.  It does not have to be complicated or too exhaustive at this point, but you have to know where you stand.

You may want to use a simple Household Budget that will help you determine your total income and outgo.

In a time of financial crisis, you need to ask yourself some tough questions:

  • Do you really need all the "bells and whistles" of your cable TV?
  • Can you cut back on your heating/cooling/water and other utility bills?
  • What about miscellaneous spending?  Do you really need to be spending $5/day for that latte? I know, but...
  • How about putting a hold on that gym membership you rarely use?

Starting to get the idea? 

If you find out that there is just not enough money at the end of the month to pay all of the bills, you must make some tough decisions.

There is a HUGE difference between SECURED and UNSECURED debt.

Secured debt includes things like your mortgage, auto loan and possibly furniture or appliances if you financed through a finance company.

Failure to pay these debts could result in foreclosure or repossession.  So, make sure these are your primary bills that have to be paid each month. 

Your unsecured debts including credit cards, personal loans, any debt that is not secured by collateral, can be treated differently in time of crisis.

This is not the time to be overly concerned with your credit score!

We're talking about survival here.  The credit score issue can be dealt with later!

If you can service the secured debts, but there is not enough for the unsecured debts, contact each of those creditors and ask for a lower payment and/or interest rate.

Some creditors will work with you, but don't be surprised to discover that they really don't care about you or your situation!

If that is the case, you may want to contact a professional Debt Management Company to help.

You may qualify for a Debt Management Program or a Debt Settlement Program.  A qualified company will go over you situation and budget very thoroughly before making a recommendation. 

Be aware that most companies only offer one solution.  No one program will fit every situation, so be very careful.

In a Debt Management Program, each of your unsecured creditors will be contacted and a lower payment/interest rate will be arranged.  You will have ONE MONTHLY PAYMENT and it will be disbursed to each of the creditors accordingly.

These programs will usually take 48 months or so, but each of your debts will be repaid and you will not be receiving calls from collectors.

If you do not qualify for the DMP, then the Debt Settlement Program may be your best option.

In the DSP, negotiations will be made with each of your creditors for a reduced amount.  As you cannot afford to keep paying the monthly amount, these accounts will ultimately charge off and go to a collection agency.

You will receive phone calls which can be very annoying, but there is a way to stop these calls. Click here for a FREE REPORT.

These amounts will vary, but should be around 50% of the balance at the time of settlement.

Of course, you will need to set aside an amount your budget can handle to have funds to negotiate, so make sure you can be disciplined to make those deposits each month.

If after going over you budget and examining your options, you may be forced with the ultimate decision of seeking bankruptcy protection.

You should consult a bankruptcy attorney to find out which plan would be best for you.

Regardless of which option you choose, taking control of your situation will help put an end to the worry and frustration that financial pressure brings.

Most people find that after going through all of the steps above and choosing the appropriate solutions, it was not as bad as it seemed.

 help with credit card debt

Tags: debt relief programs, debt settlement, alternatives to bankruptcy, create a budget, help with credit card debt

Avoid Bankruptcy!

“I have too much credit card debt and not enough income! I don’t want to file for bankruptcy, but I don’t know what else to do. Are there any good alternatives to bankruptcy?”

Debt Relief

We get asked this question several times a day. The answer is YES! There are some great options available to help you avoid bankruptcy and get back on track.

If you are overwhelmed with too much credit card and other unsecured debts, you are not alone. With almost 1 out of 10 people unemployed and the economy in its worst condition since the Great Depression, thousands people who have always kept up with their debt payments in the past are in trouble and looking for answers.

Debt Management (formerly referred to as Credit Counseling) is a program designed to give the consumer one payment that is then distributed to each to the creditors enrolled in the program. The interest rates and fees are reduced and usually this type of program allows the creditor to be debt free in about 48 months.

Debt Management is a great option, however many people who are struggling financially cannot even keep up with this reduced monthly payment. In that case, more and more people are seeking help with their debt through Debt Settlement.

Most creditors are willing to accept a reduced payoff to accounts that are 180 days or more delinquent. This normally averages 50% of the balance and sometimes even less.

Most Debt Settlement Programs are designed to completely settle all of your debts in 36-48 months, depending on the total amount of debt, type of debt and what your budget will allow you to contribute.

If your financial circumstances won’t allow you to qualify for Debt Settlement, then you should seek the advice of a bankruptcy attorney.

Bankruptcy should be your last option, but in many cases, it is the only and best option.

Tags: debt settlement, debt elimination without bankrupcy, alternatives to bankruptcy, Credit Card Debt Negotiation

Loan Modification Scams

I've been scammed!Help!  I've been scammed! 

Loan modification scams are everywhere.  Many people have been taken advantage off and are in worse shape than when they started.

Here are things to look for if you are thinking about a loan modification:

Foreclosure Rescue Scams

A scam artist poses as a counselor and tells you he can negotiate a deal with your lender to save your house, but you have to pay him a fee first. He may even tell you not to contact your lender, lawyer or housing counselor. He may even insist that you make all mortgage payments directly to him while he negotiates with the lender. Once you pay the fee, or a few mortgage payments, the scammer disappears with your money.

"Government" Modification Programs

You get a letter that looks like this company is affiliated with or even approved by the federal government as a result of the President's Rescue Plan.  For an upfront fee, the scammer promises to help you qualify for one of the government programs.

Don't fall for it!  Contact your current lender directly and they can tell you if you qualify.  You don't have to pay for it!

Leaseback Scam

This is one of the worse ones out there.  The scam artist urges you to surrender title of you home to them so that it does not go into foreclosure. 

They will let you stay in the home as a renter or a lease-to-own tenant so that you can buy it back in few years.

The scammer never intends to sell you the home.  In fact, he may raise the rent over time so that you cannot afford to pay.  Once you get behind, he starts the eviction process to get you out.  Now he can sell the house!

A Promise to Find a Buyer for Your Home

The scam artist promises to find a buyer (or tells you he already has a buyer), but you have to sign over the deed to him.  He promises to share the profit with you after the sale.

Once you've done this, you are done.  No home and no money!  He simply rents or sells the home!

If you would like to talk with a counselor for free, visit HUD or call 888-995-4673.


photo by Caston Corporate

Tags: loan modification scams, government loan program, alternatives to bankruptcy

Are There Alternatives to Bankruptcy?

Just the sound of the word...BANKRUPCY sounds scary, doesn't it?too much debt

If you find yourself overwhelmed by too much debt, don't think that bankruptcy is your only choice. 

Millions of people just like you have resolved their debt problem by using alternative methods.

The worse mistake you can make is to DO NOTHINGIf you cannot afford to make the minimum payments due on your credit cards or other unsecured debt, don't put you head in the sand but start to take action.

Call your creditor before the due date of your payment.  You may be able to work out a temporary plan whereby you pay little or nothing for a few months or until you get yourself back on track.

However, don't be surprised to learn that even though you have been a good customer for many years and have never or rarely been late or missed a payment, they refuse to help you.

You'll soon find out that the credit card and banking industry is in business for one reason and one reason only...PROFIT!

Never forget that they DO NOT CARE:

  • That you've lost your job
  • That you have a family to take care of
  • That you've had a serious illness
  • That you've gone through a nasty divorce


So what can you do?

You should contact a Debt Management Company to see if you can qualify for a Debt Management Program (DMP). If you do, then your interest rates and fees will be greatly reduced and your single payment may be a little less that the total of your current minumum payments due.

If you can't afford the DMP, then you should consider a Settlement Program

Once your accounts are delinquent for 120-180 days, the creditor may be willing to accept a settlement offer at about 50% or so if you have that much to make in lump sum.

Of course, for most people, if they had that kind of money, they would be behind in the first place!

You may try to arrange a term-payment settlement, but you may not get as good a deal if it takes 6 months or so to complete.

The main problems with do-it-yourself debt settlement is:

  • You will be dealing with professional debt collectors that are trained to intimidate you into sending them as much money as possible.  Be very careful!
  • The debt settlement process takes many hours and for most people (who have a job and or family), they just cannot spend that kind of time.

You may want to seek the help of a professional debt settlement company that has the experience to help you.

The point is, there are alternatives to bankruptcy and you should explore them first.

Tags: debt settlement, best way to eliminate credit card debt, debt elimination without bankrupcy, alternatives to bankruptcy, settling credit card debt on your own