How to Improve Your Credit Score After Debt Settlement

Debt Settlement is an excellent option for dealing with debt.  But, after you have settled all of your debts, you need to do some work to make sure your credit report and score is being reported correctly!  Here's what you need to do....

We have been helping people deal with the stress of have too much debt for many years.  Once one of our clients has successfully completed the debt settlement program, they are not sure what they can do to improve their credit score. 

As an example, I received this email yesterday:

"I'm so glad we've finally wrapped everything up!  Do you have any advice for me, with regards to building back up my credit score?" 

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It is very important to understand the "basics" of how your credit score is determined. 

According to the Fair Isaac Corporation, your score is determined from the following:

 

  • Payment History (35%) 
  • Amounts you Owe (30%)
  • Length of Credit History (15%)
  • Types of Credit Used (10%)
  • New Credit (10%)

 

As you can see from the breakdown above, at least 65% of your credit score is determined by how you have handled credit (History) and how much outstanding credit you are carrying now.

Our credit reports are used by lenders, insurance companies, potential employers, etc. to get a snapshot of how you have dealt with and are dealing with credit and debt.

When someone enrolls in our Debt Settlement Program, they have usually gone through (or are going through) a very emotional and stressful time in regards to debt and debt management.

Once the balances and the subsequent "minimum payments required" get too large to manage, most people choose a debt settlement program rather than bankruptcy protection.

When accounts have been delinquent for 5-6 months, they are usually charged off and/or sold or turned over to a debt collection agency.  Most of the time, the debt collector will accept a settlement of 40% -60% of the balance, sometimes more or less, depending on circumstances.

Click below to see some actual settlements we have negotiated for our clients:

Recent Settlements See what we have  done for our clients!

Once an account has been settled, the debt collector is supposed to report the settlement to the major credit bureaus, but many times they don't.

This is where spending a little time and effort can pay off tremendous benefits as regards to your credit score.

FIRST, you need a copy of your credit report to see what is being reported.

All of us can received a FREE COPY of our credit reports annually.

There are several companies you can find online that offer credit reporting services, but I've found the easiest to be:

www.annualcreditreport.com

Just follow the instructions and get a copy from all 3 of the Major Credit Reporting Agencies:

  • Experian
  • Equifax
  • TransUnion

Once you have it or them printed, take some time to go over the report.  These reports are not that easy to understand, but with a little effort, you can determine what is being reported.

What you are looking for are ERRORS. 

Let's say, for example that you had your XYZ Credit Card account settled last year.

The balance was $14,875, but the debt collector, Atlas Collection Corp (not real)., accepted $7,000 to settle this account.

As you are checking your credit report, you see that the balance of$14,875 was charged off from XYZ Credit Card and the notation says that it has been "placed for collection" or something like that.

Several pages further back in your credit report, you see that Atlas Collection Corp. has the account and is reporting the balance at $14,875 (might be more or less, depending on additional interest and fees.)

Atlas Colletion Corp. never reported the settlement, or reported the settlement, but the Credit Reporting Agency never changed the reporting to read....

    Balance $0     "account settled-as-agreed" or in some cases, "settled-in-full"

As long as this account is showing a large, unpaid balance, your credit score will suffer!

Now what?

Time for you to go to work...

You are going to go online and open a DISPUTE with each credit reporting agency that is not reporting this account as $0 balance and/or "paid-as-agreed".

To do so, click on the links below and follow the instructions. 

Going on line is far easier and quicker than trying to send in by mail, but either way will work.

You will need to be able to show proof that the account was settled, so you will need:

  • Copy of the Credit Report page showing the error (you want to circle the error and make it easy for the agent to see what you are disputing)
  • Copy of the settlement agreement
  • Copy of the cancelled check or check-by-phone or debit card you used from your bank statement
  • Brief letter of explanation, such as:

John Doe

123 Street

City, State Zip

Social Security # (they have it anyway) xxx-xx-xxxx

I am opening this dispute to correct an error on my report.  I've included the page showing the error along with proof that it should be a $0 balance now.

I negotiated a settlement for this account and it was paid as agreed on X/XX/2015.

I've enclosed not only a copy of the settlement agreement, but also a copy of the cancelled check as proof of payment.

Please correct the error to reflect a $0 balance and that the account was paid-as-agreed.

Thank you,

_____________________________________ (sign here)

John Doe

Phone: 555-555-5555

Email:  JDoe@ internet.com

You will need to copy all of your documents and proofs in a .pdf format, not only for your records, but also to attach when you go online.

The credit bureaus should correct the error within 45 days. 

You can go back online, login and check the progress.

If they do not honor your dispute, then do it again.  DO NOT GIVE UP!

Most of the time, if you have demonstrated a legitimate error and have provided proof, the credit bureau(s) will make the correction.

As your credit report starts to reflect $0 balances, your credit score will increase.

If you would like more information, click below:

How to Dispute Errors  on Your Credit Report

 

 

Photo Credit

 

Tags: debt collection, Credit Score, debt settlement in oregon, impove your cedit score

Can Debt Settlement Help My Credit Score?

Debt settlement is an option that can not only help you not only pay off debt, but will also work to improve your credit score.

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Studies have shown that 1 out of 5 of us have errors on our credit reports!

In fact, the Federal Trade Commission released a study recently that also reveals that many consumers who attempted to dispute those errors with the major credit reporting bureaus were unsuccessful.

Your credit report and more importantly, your credit score. is a reflection of all of the information that is being reported.  

That is why is so very important that you not only know what is being reported, but also to know what to do about inaccurate information.

Of course, you want to make sure that your personal information is correct, such as:

  1. Your name with correct spelling
  2. Social Security Number
  3. Current address
  4. Date of Birth

After that, inaccuracies on accounts, balances, etc. are common.

For example....

Let's say you went through a tough time, financially a couple of years ago.  If you were not able to keep up with your minimum payments on your credit cards, then one or more may have been turned over to a collection agency.

But, when things changed, you replied to one of the debt collector's letters or calls and paid the account off.

The debt collector should have reported it to the credit bureaus, but many times they don't.

So, when you go to get a loan and are denied, the credit report (if denied, the lender must provide you with a copy of the credit report they used and explain why) showed that account with an outstanding balance!

Now you have to contact the credit bureau and open a DISPUTE.

Many people just don't know that there are mistakes and inaccurate information being reported on their credit report and therefore, they are paying the price...literally!

If you find errors on your credit report, click on the button below and you will see exactly what to do:

How to Dispute Errors  on Your Credit Report

 

Just a word about so-called "credit repair" companies...

While you should dispute any legitimate errors on your credit report, opening a frivolus dispute is not only dishonest, but also could get you into trouble!

Using a Credit Repair company to challenge or dispute legitimate errors is fine, beware of those types of companies who make outrageous claims, such as:

  • “Credit problems? No problem!”
  • “We can remove bankruptcies, judgments, liens, and bad loans from your credit file forever!”
  • “We can erase your bad credit — 100% guaranteed.”
  • “Create a new credit identity — legally.”

The Federal Trade Commission has a good article about this that you should check out:

"Credit Repair...How to Help Yourself"

But what about legitimate accounts that you forgot about or neglected to pay off?

If that account has been with a collection agency for more than a year or so, you should be able to negotiate a SETTLEMENT for less than the full balance.

Once the account has been settled, the debt collector should (there we go again!) report it to the credit bureaus as "settled-in-full" or "settled-as-agreed" and the balance should be $0.

Once you have taken care of old accounts via debt settlement, your credit report will start to improve as your debt-to-available credit ratio improves, and thus, you are a better credit risk.

Finally...

Yes, Debt Settlement is a great way to not only pay off old, outstanding accounts, but also a great way to improve your credit score!

FREE  Debt Elimination Summary

 

Photo Credit

 

 

 

 

 

 

Tags: Credit Score, debt settlement in oregon

Debt Control: 4 Programs That Work!

Debt...although a necessary evil in today's economy, it can be devastating.  Here are 4 Debt Control programs that may work for you!

controlling debt control

Are you having a hard time with any of these?

  • Credit Cards
  • Medical bills
  • Utility Bills
  • Personal Bank Loans
  • Auto Loans
  • repossession Deficiencies
  • Judgments

 

If you do (and millions of people are just like you), you should consider one (or more) of these programs:

DEBT ACCELERATOR PROGRAM

There are all kinds of estimates or studies that have been done to try and calculate how many people are carrying debt loads that are becoming difficult to handle.

The average US household credit card debt is estimated to by around $15,000.  Now, some families are carrying very large amounts of debt and some have less, but the point is... we (most people) are carrying far too much debt. 

I  believe it was Dave Ramsey who either first developed or made popular the idea of the Debt Snowball Plan.  Sure, there are some critics of this type of plan, but usually those critics have not been dealing with people (and especially people's emotions) for very long.  While I don't agree with everything he promotes, the fact that he is helping people get control of their debt is admirable, and I applaude his teachings.

Basically, in a DEBT ACCELERATOR PROGRAM (my term for a Roll-Up or Snowball Plan) you are going to be paying a little more that the total required minimum payments of all of your accounts. Don't think you can find a "little more" money each month?

  • How about making a few changes in your lifestyle?  For example:
  • Daily StarBucks coffee = $5.00 x 30 days/month = $150 per month
  • Fast food lunch at say $6 bucks x 30 days/month = $180 per month
  • Health club membership you never (or rarely) use = $25/month

Get the idea??? If you are serious about finding some extra money to pay off your debt in a shorter period of time, you can do it!  OK, I'll get down from my "soap-box"! 

Let's say you have a total monthly minimum required payment of $500.  Although you have been paying consistently for several years, the balances are barely going down!

Of course, you know (or should know) why.  The credit card industry has tricked the average consumer into thinking that they are "repaying" their debt by making the minimum required payment each mont.  But, if you will take a close look at your next credit card statement, you're going to be shocked (outraged is better) to learn that your balance was hardly reduced at all.  Here's why:

Hypothetical Credit Card:

  • Balance                                    $7,000
  • APR                                             19%
  • Minimum Payment is 2.25% of balance

$7,000 x 2.5% = $175

19% / 12 (months in a year) = 1.583% interest on $7,000 = $110.81 (THAT'S RIGHT...DO THE MATH)

So, when you send in your "minimum payment" of $175, here's what next month's statement will look like:

Previous Balance                      $7,000.00

Interest charge                         $  110.81

Payment received                    -$   175.00

New Balance                            $6,935.81

YOU GOT IT!  You sent $175 and your balance was only reduced by $ 64.81!!!

No wonder it takes peope 10, 15 or more years to pay off the average credit card (especially if you continue to only make the "minimum payment required"!

But, by making a few changes in your spending habits, you find an extra $100 per month.  By adding an additional $100 per month to the $175 (and not reducing the $175 as you balance goes down), you can pay off that credit card in just 33 months, saving you thousands in interest!

Now that you have that one paid off, YOU DON'T LOWER THE TOTAL MONTHLY PAYMENT, you just reallocate or add it to the next credit card, and so forth, and so forth until all of your credit cards are paid off!  DOESN'T THAT SOUND GREAT!

But, what if you not only can't afford the total minimum payments, you don't have any extra funds for a Debt Accelerator Program?

Then, a DEBT SETTLEMENT PROGRAM may be the answer!

So many people have run into some very difficult times, financially.  This may due to:

  • Loss of employment
  • Too little fixed income after retirement
  • Death of a spouse or partner
  • Disability
  • Divorce
  • And many other "financial challenges" that you may be facing

Does that mean that you can never recover or be DEBT FREE once again?

No, in fact, debt collectors are usually more than willing to SETTLE a debt for less than the total balance, depending on your particular circumstances.

When you fall behind on your payments to your creditors, as you know, the calls start becoming more frequent and frustrating! 

Did you know that once your account has been transferred to a debt collector, you can legally make them stop calling?

STOP Collection Calls Free Sample Letter

After you account is with a debt collector (may be a "debt purchaser"), you will need to make a SETTLEMENT OFFER of much less than the total balance.  Now, here's where it get's tricky.

A professional debt collector usually receives a bonus or commission depending on how much they can get you to pay.  In some cases, they start out very firm and tell you that they cannot offer a discount at all (not true).  Sometimes, they are willing to offer 70% or so, and you may have received a letter with the offer.

My experience with dealing with debt collectors over the last 12 years is that they are all working on different "numbers" (for lack of a better word), meaning that they have certain goals their bosses give them and they may or may not be able to go as low as you want.

If you get an offer that works for you, MAKE SURE YOU GET IT SENT TO YOU IN WRITING! I don't know how many times we get a client who made a "settlement agreement" over the phone, made all the payments as agreed, but found out that the debt collector denied ever making the agreement and demanded the remainder of the full amount!

For more information about "how" and "if" Debt Settlement really works, CLICK HERE.

FEDERAL STUDENT LOAN FORGIVENESS PROGRAMS

If you are like thousands upon thousands of current, former or parents of students with too much Federal Student Loans to repay, we have SOME GOOD NEWS!

Again, as with any "government" program, depending on your particular circumstances, you may qualify for one of these new programs. Basically, if you income falls within certain parameters, you may be able to have anywhere from NO PAYMENTS to maybe only a $100 or so.  Make these payments for 20 years, and the remainder of the balance will be forgiven! 

And, if you are in or go into some sort of "public service" career, you may only need to pay the reduced payments for 10 years!

Trying to determine not only IF YOU QUALIFY, but HOW MUCH YOUR PAYMENT WOULD BE, is not very easy (remember....government...). Let us help:

877-492-4109

Finally, if your financial circumstances are so bad that you cannot qualify for any of the programs above, then you should consider BANKRUPTCY PROTECTION!

Notice I said "bankruptcy protection", as in PROTECTION FROM YOUR CREDITORS!

If you ignore the collection letters and calls and are not able to work out a repayment plan or settlement, the creditor or debt collector may decide to FILE A COMPLAINT and then you would receive a SUMMONS.

If you ignore the summons (as so many people do), then the creditor (or PLAINTIFF), will most likely be awarded a DEFAULT JUDGMENT.

Now the credior has the legal right to apply for a WRIT OF GARNISHMENT, not only for your INCOME, but possibly your BANK ACCOUNT(S).

You should seek the cousel of a BANKRUPTCY ATTORNEY right away.

So, there are 4 Programs to control you debt:

  • Debt Accelerator Program
  • Debt Settlement Program
  • Federal Studen Loan Forgiveness Programs
  • Bankruptcy

You don't have to live in fear or frustration. Get some help today!

 

 

Photo credit:

Jason Rogers

 

 




 


 

 



Tags: credit card debt, Bankruptcy, debt collection in oregon, debt collector, stop the collection calls, debt settlement in oregon

Your Credit Score May Get a Boost!

If you are having a hard time increasing your credit score, there may be some good news on the horizon!

credit score

Major credit reporting company Fair Isaac (FICO) has been pressured by Washington to change its credit-risk scoring model to give a break to consumers that have had debt turned over to collection agencies!

While this "change" to the basic credit score scoring model is still in the works, it could be a seen as a great idea to consumers, while at the same time, another dangerous, slippery slope by lenders.

 

Recently, I've reviewed a few articles recently about the changes may be coming to credit reporting agencies.  One of the best was from Paul Sperry for Investor's Business Daily.  I highly recommend you checking out Mr. Sperry's article.

For years, those unfortunate people who for reasons usually beyond their control, found themselves with too much debt and not able to make payments, saw their accounts charged off by the creditors and turned over to a collection agency.

If you've read any of my blogs in the past, you know what I think about most collection agents and agencies.

While there are a lot of debt collection companies out there that are professional and stay (for the most part) within the Fair Debt Collection Practices Act (FDCPA), as with any group or organization, there are always a few "bad apples".

It seems that the Consumer Financial Protection Bureau (CFPB), created by the Obama administration, has been in talks with the Fair Isaac company to "ease up" on some of the weight they give information about your credit to determine your credit score.

Currently, FICO uses the following guidelines (along with a lot of othe information) to produce a credit score:

FICO What is in your credit score

 

 As you can see, your payment history is worth 35%, so if you have had debt issues in the past and have had some or all of your accounts  go to a collection agency, your credit score would suffer.

However, under the proposed new guidelines "suggested" by the Consumer Financial Protection Bureau, FICO would no longer penalize your credit score because of delinquent MEDICAL DEBT or ANY DEBTS THAT GO TO A COLLECTION AGENCY THAT GET'S REPAID!

To me, that is great news!

In dealing with people over the last dozen years or so, I would say that the greatest majority of people who wound up in a severe debt situation, did so due to circumstances beyond their control, with MEDICAL DEBT being one of the largest debt!

It's not unusual to see someone with $10,000, $20,000 or more of medical debts.  When you see the (in my opinion) OUTRAGEOUS MEDICAL FEES charged by some doctors and hospitals, it's no wonder that people get into trouble.

If these people can find some relief to their credit score by making some changes to the way a credit score is calculated, then I'm all for it!

I like what the article said, "Obama regulators argue that it's important to insulate consumer credit scores from medical debt, for one, because such bills are "unexpected".

Another important and much needed action by the CFPB was that they released a report (2012) that basically stated that less than 80% of credit reports were accurate.

Inaccurate information on your credit report can really hurt.  The good news is that you can challenge mistakes and get the credit reporting bureaus to change your report, thereby increasing your credit score and/or credit worthiness.

Click here to get a FREE COPY OF YOUR CREDIT REPORT.

If you find yourself with too much debt, or just overwhelmed by all of this, we may be able to help:

 


 

 

 

 

 

 

 

 

Photo Credit:  lendingmemo.com

Photo credit:  http://www.myfico.com/CreditEducation/WhatsInYourScore.aspx

Tags: debt collection, FICO, debt collectors, debt collection in oregon, debt settlement in oregon, fair debt collection practices

What is the Best Way to Improve Your Credit Score?

If you have ever tried to check and/or improve your credit score, you know it can be pretty confusing.  Here are some tips on how you can improve your credit score.

You've probably seen an ad or had a "pop-up" appear on your computer by a so-called "Credit Repair" company offering to increase your credit scores almost "over night"!

My advice...RUN!  You've heard the old saying:

"If it sounds too good to be true, it probably isn't true."

Although there are many legitimate companies that will help you improve your credit over time by correcting errors and helping you maintain a disciplined approach to using your credit, there is just no "quick fix" when it comes to improving a bad credit history and therefore a poor credit score.

I have been have been helping people settle and manage outstanding credit debt for over ten years now and I believe that one of the most helpful sites you can use can be found at:

www.MyFico.com

While you cannot improve your score quickly,  YOU CAN IMPROVE YOUR CREDIT SCORE over time, by following the following tips:

If you haven't done so already, get a FREE copy of your Credit Report.

We all can get a free copy once a year, so take advantage of this by annually checking your credit report...and it's FREE!

According to Fair Issac or FICO, there are 5 areas that affect your credit score the most:

 

FICO Credit Score Breakdown

Paying your bills on time is one of the most important things you can do to maintain a good credit score.  Being just a few days late will hurt you score.

If you have had accounts go to a collection agency, then that obviously will hurt you score.  By-the-way, if you pay off or settle an account with a collection agency, it will remain on your credit report for up to seven years, but the fact that you paid the debt will ultimately help  your credit score.

Using a Debt Management Company to help you get control of your debt can be very helpful.

No, your credit score will not be affected by using or not using a Debt Management Company, but in the long run, the professional help and guidance will help reduce or pay off all of your debt and therefore, improve you credit score.

Next, notice that at least 30% of your credit score is determined by the AMOUNT OF DEBT you owe.

A lot of people think that just because they have never been late on a payment they should always have a great score.  But, if they have a very large amount of debt in relation to their income and total available debt, they will be disappointed with their score.

Here's basically why:

Let's say that you are a credit card company and are considering offering or issuing credit to these two prospects:

Prospect #1 has a good job and employment history.  She in never late on making her payments for her mortgage, car and all of her credit accounts.  But, even though she is earning a "better-than-average" income, she has accumulated over $30,000 of unsecured debt in addition to her mortgage and auto payments!

She would need to be making minimum payments of $750-$850 per month on her unsecured debts (credit cards, store cards, etc.) and that equates to about 25% of her net monthly take-home income just for these unsecured debts.  When you add in a $1200 mortgage and a $400 car payment, that's about $2,400 per month going out to service her DEBT!

Even with her "better-than-average" job and income at say, $75,000 annually, when you take out 30% for taxes and other deductions, that gives her a net monthly income of about $4,375.  With $2400 going out to just meet the minimum payments on all of her debt, that equates to almost 55% of her net income!

One "hick-up" such as long illness, loss of job, or any other hardship would make it almost impossible for her to meet your debt payment obligations.  If you were a credit card company, would you loan her more money?  Hence her credit score is not as high as she though it would be.

How about Prospect # 2:

He had a good job and earns about $4,000 per month.  Not that much really, but he is doing OK.  He isn't buying a home and so is paying about $800 per month in rent.

His old truck (not too old...maybe 8-10 years) is paid for.  Although it doesn't get great gas mileage, at least he doesn't have a big payment each month.

He has a good credit history and although maybe late a couple of times in the past, he has maintained a steady, on-time history for several years now.

He has about $10,000 on 3 credit cards which demands that he makes at least a minimum payment of $215 each month, which he does and sometimes adds a little more than the minimum.

Another VERY IMPORTANT PART OF DETERMINING YOUR CREDIT "WORTHINESS":

The ratio of credit being used to the availability of credit to you.

He has paid off several accounts in the past and actually has about $40,000 of available credit (credit limits on all of his accounts) that he could use if need be.

He is only using $10,000 of the available $40,000 or only 25%.  This is considered a good use of available credit and so he would be viewed as a better credit risk.

Are you starting to get the idea?  It's not just about paying your accounts on time (although that is certainly important), but more about USING AND MAINTAINING YOUR CREDIT WISELY!

You will notice that the LENGTH OF CREDIT HISTORY makes up at least 10% of your credit score.  If you are just starting out and have not established much of a credit history, DO NOT MAKE THE MISTAKE OF OPEINING A LOT OF ACCOUNTS IN A SHORT PERIOD OF TIME!

Opening too many accounts too fast doesn't look good to the credit bureaus.  In fact, it could do more harm than good!  Just open an account or two, make some small charges and pay them off promptly.

How long will this take?  It depends on some and/or all of the other factors we've been talking about.  The point is that establishing good credit doesn't happen quickly.

One more thing...

Closing accounts doesn't help improve your score!  In fact, it will probably hurt your score.

Why?

Again, you want to show that you are a responsible user of credit over a long period of time.  If you close too many accounts (assuming a $0 balance on them), you are reducing your "credit-use-ratio" as we discussed before.

Pay off and/or settle old accounts the best you can.  Sometimes it makes sense to seek the help of a professional Debt Management Company to settle old debts that have been around for a long time.

Sometimes these can be removed (using the proper procedure) from you credit report if they have gone past your state's statute of limitations.

Debt Settlement can help if you are in over your head!

Recent Settlements See what we have  done for our clients!

To summarize, the best way to improve your credit is too:

  • Manage your credit wisely...not too much...too fast!
  • Make your payments on time.  Being a day late hurts more than you know.  Try using "auto-payments".
  • Check that Credit Report for errors!  All three credit bureaus will let you go on line to dispute errors.  You don't have to pay someone else if you will take a little initiative.
  • Finally, although I don't suggest closing credit card accounts, I do believe that you should only use one card for emergencies only!  Pay cash or don't buy! Saw this sign in the parking lot of a major retailer the other day and it really says it all:

shop now pay later

The best way to improve your credit score????  Use credit wisely.

 

 

Photo credit:  http://www.myfico.com/CreditEducation/WhatsInYourScore.aspx

 

 


Tags: credit report errors, debt collection, Credit Score, debt, credit repair, credit report, debt settlement in oregon, credit card, debt management, credit cards

Does Debt Settlement Really Work?

If you are considering enrolling in a Debt Settlement Program, you may be asking yourself, "Does Debt Settlement really work?"

does debt settlement really work

 

There are several options available to help you get your debt under control, including:

  • Debt Management Program
  • Debt Settlement Program
  • Consolidation of Debt

 

While a Debt Management Program may be just the program you need, if you are having a tough time just keeping up with the minimum payments, you should consider a DEBT SETTLEMENT PROGRAM.

Some of the adantages of a Debt Settlement Program:

  • ONE monthly payment that is typically much less that what you are paying now.
  • Most debts can be negotiated at 50% or in some cases, much less.
  • A typical Debt Settlement Program will be about 36-48 months, depending on a number of factors.

So, the question you may be asking is, "Does Debt Settlement really work?"

Yes, if you fit the criteria for a Debt Settlement Program.  Many so-called "Debt Settlement Companies" only offer...Debt Settlement as the answer to anyone with debt problems.

Everyone should know that "one size does not fit all"!

Before you decide, it is critically important that you explore all of the options that are available to you.

But if after discussing your situation with a qualified, experience debt relief specialist, you deteremine that a Debt Settlement Program is what you need, you might want to ask for some proof of actual settlements.

Check out some of the actual settlements we have been able to negotiate for our clients:

Recent Settlements See what we have  done for our clients!

Successful negotiation of unsecured debt depends on several factors. 

For example, if you are retired and living on Social Security and/or a retirement income, both are 100% exempt from any garnishment or levy by a debt collector.  For these clients, settlements below 50% are possible.

Debt Settlement is really for those who are in a very bad financial situation.  Most prospects for a debt settlement program have had something happen in their lives that has caused them to get over their head with debt, such as:

  • Unemployment
  • Illness or disability
  • Death of a spouse or partner
  • Divorce

If you find yourself with too much debt and just not enough income, then you owe it to yourself to look into how debt settlement works and see if would work for you.

 

FREE EBook Debt Settlement  Basics

Yes, Debt Settlement really does work!

 

 


 

 

 

 photo by: Eleaf

 



 

 

Tags: credit card debt, debt relief options, debt settlement, debt settlement in oregon, debt management

Is Debt Settlement Your Best Option?

When faced with too much credit card and other unsecured debts, you really have only a few options. 

Here's some tips how to determine your best option?

I'm talking about credit card debt as well as other unsecured debts such as:

  • Personal loans
  • Private student loans
  • Store cards
  • Medical bills
  • Repossessions

Next to a very large consolidation loan (personal or home equity type), borrowing money from family and friends, withdrawing money from your 401(K) or other retirement plans, you really only have 3 basic options.

 

  • Debt Management (or in some cases using a Snowball Debt Reduction Plan)
  • Debt Settlement
  • Bankruptcy

Notice I didn't mention using the creditor's offer of a Hardship Plan as this is only a temporary, short term fix, that only delays the inevitable repayment of the debt!

And also notice that I didn't mention the so called "Pay-Day" loans.  Stay clear of those at all costs!!!

Do you qualify for a Debt Management Program?

If you are only able to make the minimum payments required of all of your credit cards and other unsecured debts, you should know by now that it may take you many years (anywhere from 10-15, depending on which article your read) and 3-4 times the original amount borrowed to repay those debts!

If you enroll in a Debt Management Program (formerly and sometimes still referred to as a Credit Counseling Program), here's what usually happens:

The Debt Management Company will contact each of your creditors.  Most of the hundreds upon hundreds of creditors usually have an agreement with Debt Management Companies to:

  • Lower or eliminate interest rates
  • Forgive or reduce late or over-the-limit fees
  • Re-Age your account (make it look like it you are not behind on payments)

You will make ONE MONTHLY PAYMENT to the Debt Management Company.  Although some of the Ads you see or hear seem to say that they can reduce your monthly payment, that is not usually the case.

Credit card companies figured out many years ago that they could make more money by NOT HAVING THE CONSUMER PAY OFF THE CARDS!  That's right, the credit card industry actually makes more profit from late fees, over-limit-fees, annual fees and low minimum monthly payment requirements, than they do on the high interest rates they charge.

For some shocking insight into what credit cards companies are doing, click here.

I don't want to get lost in the various calculation methods the credit card companies use to calculate the minimum monthly payment, but most credit card companies only charge 2% of the balance/12.

In most Debt Management Programs, the total or single monthly payment you will be required to make is about 2.7%.  This includes the payment to the Debt Management Company.  Did you really think they worked for free because they are incorporated as a "non-profit"?

Example:  Let's say you have a total of $20,000 of credit card debt.  (BTW...the average consumer has 8 cards with an average total balance of $9,000!)

$20,000 x 2% = $400 minimum monthly payment required now

In a Debt Management Program, $20,000 x 2.7% = $540 per month or $140 more!!!

If you are barely making the minimum payments now, how can you increase it by $140?

But before I move on to the second option, if you could make increase your monthly payments each month, why not check out a SNOWBALL DEBT REDUCTION PLAN?

A Snowball Debt Reduction Plan is a great way to reduce your debts more quickly and avoid paying the cost to a Debt Management Company.

However, not everyone has the discipline to set up, monitor and track a Snowball Debt Reduction Plan.  If you're like this, maybe you could use a little help...

But what if you don't have any extra money at the end of the month?  In fact, you are not  making the minimum payments and some or all of your accounts are "past-due" or in collections?

Then you should consider a Debt Settlement Program.

Or, perhaps you have fallen behind because of:

  • Small fixed retirement income
  • Disability
  • Unemployment
  • Divorce
  • Death of spouse or partner
  • Too little income...too much debt!

A Debt Settlement Program may be just what you need!

  • One monthly payment (customized to fit your existing budget)
  • Most debts will eventually be settled for 50% or more
  • Avoid seeking bankruptcy
  • Become DEBT FREE in 36-48 months 

Want a complete overview?  Download our FREE BOOKLET:

FREE EBook Debt Settlement  Basics

 

What about Bankruptcy?

If your financial situation is such that you not only cannot afford extra payments required of a Debt Management Program, a Snowball Debt Reduction Plan or a Debt Settlement Program, then you need to consult an attorney about BANKRUPTCY.

There are differing opinions about bankruptcy, but regardless, if you have accumulated so much debt that realistically you will never be able to repay, you owe it to yourself to check out your bankruptcy options.

Other questions?  Let us help.

 

 

 

 



 

 

Tags: snowball, credit card debt, debt settlement, Bankruptcy, credit counseling, debt settlement in oregon, bankruptcy attorney, debt relief

Is it Time for Debt Relief?

New year, new year's resolutions. Don't you think it is about time for you to consider Debt Relief?

stress-reduction

Sure, you say, but what is "Debt Relief"?

I'm talking here specifically about finally starting to take control of your unsecured debts...mainly credit card debt.

You've heard or read the statistics about how many individuals have too much credit card debt based on their income and living circumstances.

With credit card interest rates anywhere from 12%-24% or higher, if you are just making the minimum payments required, it could take you 10 years or more to finally pay off those debts!

Wouldn't it feel great to be DEBT FREE? OK, here are some tips that can really help if you will apply:

FIRST:  Do you know exactly where you are financially?  I mean, can you account for almost every dollar that comes in and for every dollar that goes out?

Most people have a vague idea, but have never taken the time to do a complete, thorough Financial Worksheet.

After completing a Financial Worksheet, I've had people say, "WOW, I had no idea that I was spending so much money on stuff like Starbucks, movies, burgers, etc."

Until you get a clear picture (and you may not like it) of where you really are, you cannot possibly make a plan to become Debt Free.

Here is a simply, easy-to-use Financial Worksheet that you can download:

Budget Worksheet FREE Download here!

SECOND: Now that you have a clear, honest (it won't help if you are not honest with yourself!) picute of where you are, it's time to get an up-to-date CREDIT REPORT.

You can get a FREE CREDIT REPORT annually that will tell you how much debt is being reported to the 3 Major Credit Bureaus (Equifax, TransUnion, Experian).

Not only will this report tell you to whom and how much debt you have, you may also discover that there are errors on the report.  I've read reports that 1 out of 4 people have errors on their report.

If you find errors, you can file a challenge to each of the bureaus on line or you can mail a challenge.

The following links will help:

Equifax disputes

TransUnion disputes

Experian disputes

There is a very good site from the Federal Trade Commission that will give you some good points on for do-it-yourself credit repair.

OK, but how about all of the legitimate debts that is being reported?

Break them down into two basic groups:

Secured debts, such as:

  • First Mortgage loans
  • Second Mortgare or Equity Line of Credits
  • Auto, boat, RV loans
  • Government Student Loans

There is not a lot you an do about these except keep paying.

But on the other hand, all of the UNSECURED LOANS, such as:

  • Credit Cards
  • Store Cards
  • Personal loans
  • Mecical bills
  • Pay Day loans
  • Private Student Loans

You do have options as to how to repay these...read on.

NEXT... List all of the unsecured loans like this:

             Creditor, Interest Rate, Payment (minimum), Balance

Here is where the Financial Worksheet is so important.

After completing the Financial Worksheet, you will be in one of the following groups:

After all bills (including all debts) are paid, I have $100 - $200 extra each month that could be used to start paying down unsecured debt.

You find out that you are basically even at the end of the month.  You are paying all bills (including all debts) and you have basically $0 left over, but not negative.

Finally, if after completing a thorough Financial Worksheet, you realize that you are coming out negative at the end of the month. 

You probably alreaday knew this, as you have been "robbing Peter to pay Paul" for a long time.  In fact, some, if not all of your unsecured debts are 30,60 or 90 days late and some, if not all, have been charged off and gone to a Debt Collection Agency.

Here are your options, based on your personal financial situation (revealed from the Financial Worksheet and Credit Reports):

Group One... Those of you who can put an extra $100-$200 towards paying down unsecured debts.

You should use a SNOWBALL PLAN to pay off those unsecure debts a lot sooner and at the same time, save you thousands of dollars in interest!

Basically, you break down your unsecured debts and start paying extra to the one with the lowest balance. 

After this one is paid off, you use the same extra, plus the minimum payment just paid off plus the minimum payment due  on the second and put all of that towards that second debt.

For a more complete overview, click here.

But what about Group 2?  You are making all of your payments, but there is just not anything left over?

You should be able to qualify for a DEBT MANAGEMENT PROGRAM.

  • In a Debt Management Program, you will have one monthly payment that will be disbursed to each of your creditors by a Debt Management Company.
  • Your interest rates should be reduced significantly.
  • Late fees and over-the-limit fees should be stopped or forgiven.

In short, a Debt Management Program can not only help you become Debt Free in a shorter amount of time (usually about 48 months), but save you thousands of dollars in interest and fees.

Finally, what about Group 3?  Those of you who have too much unsecured debt and are not only not getting anywhere but really can't afford your payments...here are your choices:

  • DEBT SETTLEMENT
  • BANKRUPTCY

Debt Settlement is a great way to pay off/settle your unsecure debts without having to resort to bankrutpcy.

Debt Settlement will allow you to have:

  • One Monthly Payment (usually much lower than the required total minimum payments now)
  • Your Debt can be settled at 50% or lower (depending on several factors)
  • You can be DEBT FREE in about 48 months.

To receive a FREE REPORT called DEBT SETTLEMENT FOR BEGINNERS, click below:

FREE EBook Debt Settlement  Basics

But if you cannot even afford the reduced payment of a Debt Settlement Program, then you should consider BANKRUPTCY as a way to not only cancel your unsecured debts, but relieve the constant finacial pressure and worry that comes from such a severe financial condition.

You should consult a Bankruptcy Attorney who specializes in Bankruptcy.  You should be able to schedule a Free Consultation to deteremine if you qualify.

Regardless of your situation, there is a way to not only become Debt Free, but stop the collection calls and relieve the constanct pressure that comes with too much debt.

 

Photo By: Eamon Curry

Tags: debt collection, debt settlement, Credit Score, Bankruptcy, credit report, debt settlement in oregon, debt management, credit report dipute, unsecured debt

How Oregonians Can Find Debt Relief

how-oregonians-can-find-debt-reliefIf you live in Oregon, I've got some good news on how you can find debt relief!

If you are fighting each month to just barely get by, you are not alone.  Statistics abound about how the average family has several credit cards and several thousands of dollars of debt.

What can you do about it?

Face the problem, honestly!

When is the last time you sat down and completed and honest, up-to-date HOUSEHOLD BUDGET?

If you are having a difficult time with too much credit debt, then the natural tendency is to avoid or ignore the facts, but you can't get out of debt without know exactly where you stand financially. Once you know exactly what you have coming in and exactly what you are spending your money on each month, we can devise a plan.

BASIC DEBT RELIEF OPTIONS:

DEBT MANAGEMENT

In a Debt Management Program, you will be making ONE PAYMENT to a Debt Management Company or what some people call a Credit Counseling Company.

This company will in turn have contacted each of your creditors to arrange a repayment plan.

Most Debt Management Programs take about 48 months to complete. 

Once you have competed the program, you will not only have saved a substantial amount of money in reduced interest and fees, but your credit report will reflect that you have $0 balances and your credit score will start to improve.

The problem with most Debt Management Programs is that depending on the amount of debt you owe and your left over or net, disposable income each month, you may not qualify.

Example:

Let's say you have $25,000 of various credit card debt.  At 2% of the $25,000 you owe on all of your cards, your minimum payment was $500.

Because the credit card industry figured out that they will make much more money in the long run if they make the minimum payment so small that that most people will take 10 -15 years or more to finally repay the debt.

And, the most tragic thing is that if and when you finally do pay all of the credit card debt, you will have paid 3 - 4 times more than you originally borrowed!

But in a Debt Management Program, you most likely will need to pay about 2.5% of the total, or in this case of $25,000 total credit card debt, $625 monthly!

But don't panic!  There's another option:

Debt Settlement

In a Debt Settlement Program, your payment or actually, your deposit to a bank insured reserve account is based on several factors:

  • The type of income you are receiving
  • The amount you have left over at the end of the month
  • Your health
  • Your retiement status

In a Debt Settlement Program, your creditors will not be receiving normal, monthly minimum payments as before.

Most people who have so much debt that they cannot keep up have fallen behind already or have had some accounts turned over to debt collectors anyway.

A professional Debt Settlement Company will negotiate a reduced balance (usually around 50% and sometimes less) with the creditor or debt collector.

Once the debt has been settled (by lump sum payment or over series of payments), the debt collector will report the debt to have been "settled-as-agreed" to each of the Credit Reporting Agencies.

For more information about Debt Settlement, click below:

 

FREE EBook Debt Settlement  Basics

But what if you do not qualify for Debt Management or Debt Settlement?

If that is the case, then you may need to seek BANKRUPTCY PROTECTION from your creditors.

Bankruptcy is a viable option to finally get out of debt.  Bankruptcy should be viewed as the last option (in my opinion) and not just a "get out of jail card" so to speak.

You will need to sit down with a BANKRUPTCY ATTORNEY in your area to discuss your situation and your options.

Depending on your specific financial circumstances, you will most likely be placed in a Chapter 7 or Chapter 13 bankruptcy.  The bankruptcy attorney will explain the differences.

We have been helping Oregonians become DEBT FREE for over 10 years.  Don't let fear of the unknown keep you in contast turmoil over too much debt.

You have options for debt relief, and we can help!

 

 


 


 

 

 

 

 

 

Tags: credit card debt, Bankruptcy, debt settlement in oregon, credit card, debt management, Best Debt Settlement Companies, chapter 7 bankruptcy, chapter 13 bankrutpcy, credit card debt relief oregon

Put a Stop to Debt Collection Calls!

Annoyed with debt collector calls? 

Here is how to Put a Stop to Debt Collection Calls

Anyone that has had financial troubles and fallen behind in there payments to creditors understands just how frustrating and annoying those calls from debt collectors can be.

Not only are they annoying, but embarrassing as well!

Who wants to hear, "Dad, some guy calling about your credit card bill!"

help-stop-debt-collector-callsDebt collectors are paid to get you to pay up.

They are (for the most part) trained professionals who will use every trick in the book to get you to pay.

Most abide by the law spelled out in the Fair Debt Collection Practices Act, but many do not.

First, it is important for you to know the basics of what a debt collector can and cannot do:

A debt collector cannot call you at all hours of the day.  They cannot call before 8:00 AM or after 9:00 PM.

They cannot call you at work if they are told by phone or in writing not to call you there!

A debt collector can call family or friends to inquire about your whereabouts, but the are prohibited from discussing your debts.

What debt collectors CAN'T do:

OK, so you want to put a STOP TO COLLECTION CALLS:

You will need to write a short, legible letter that demands that the debt collector stop calling you immediately.

Although you want to be authoritative, you don't want to be rude or use language you may regret latter.

Remember, most likely, you owe the debt and would like to SETTLE THE DEBT, one of these days.

Located in Portland, Oregon, we have been helping clients stop receiving debt collection calls for over 10 years.

To receive a copy of the letter we use, click below:

STOP Collection Calls Free Sample Letter

Once you have the letter written, you should send it by CERTIFIED MAIL with a RETURN RECEIPT.

This way, you have proof that not only did you mail the letter, but they received it.

WHAT IF Debt Collectors KEEP CALLING????

If the calls don't stop, write down the date, time and try to get name of the person calling.

You will need this later to file a complaint.

You have the right to sue a debt collector in a state or federal court.  You can contact your state's attorney general's office to file a complaint. If successful, you may be awarded up to $1,000 per violation!

To file a complaint with the Federal Trade Commission, click here.

Each state has it's own site, and/or method to file a complaint.

For example, if you live in Oregon, click here to file a complaint.


That should do it, but if you would like more information about how to Stop Debt Collectors or would like to know how a debt settlement program could help you, click below:

FREE EBook Debt Settlement  Basics


Tags: debt collection, fair debt collection practices act, federal trade commission, debt settlement, how to stop collection calls, dealing with debt collectors, debt settlement in oregon, debt relief in Portland Oregon