Dealing with a debt collector can be one of the most frustrating experiences you will ever go through!  Here are a few tips that will help.

It's 5:30 PM, and you've just sat down at the table to finally relax and enjoy a meal.

You don't recognize the caller from your caller ID, but you know who it probably is. 

Yep, another call from that debt collector.

If you're like so many people these days who for one reason or another have fallen behind on your credit card or some other unsecured debt, you know how annoying it is to get these calls!

Let's put a stop to these calls!

If you do not know the address of the debt collector, then go ahead and answer the phone (just this time only!).  Tell the debt collector that you want to pay this bill, but cannot at this time.

Of course, the debt collector will try to get you to agree to some small amount to be paid as a check-by-phone or from your debit card. DO NOT DO IT!!!!

Instead, ask for the address (as though you intend to mail a check later).  If the debt collector will give it to you...great.  If not, then just hang up.  In a week or so, you should get (if you haven't already) a letter from the debt collector with the address you need.

According the the Fair Debt Collection Practices Act (FDCPA), if you write a letter demanding that the debt collector stop calling you, they must stop or face some very hefty fines!

Click below for a FREE sample letter to send:

By-the-way....

Make sure you send the letter either by Priority Mail with a tracking number or by Registered Mail.  You want to have proof that the debt collector received the letter.

OK, you've sent the letter, and since it will take a week or so for the calls to stop, what should you do the next time the phone rings?  Here is what I suggest:

TURN OFF THE RINGER ON YOUR PHONE AS SOON AS YOU GET HOME! 

If you do not have caller ID, GET IT!  You will be able to see who is calling and if you do not recognize the caller...DON'T ANSWER.  Your friends and family will leave a message. 

DO NOT RETURN ANY MESSAGE FROM A DEBT COLLECTOR...PERIOD!

Debt collectors are trained to do one thing and one thing only...get you to pay!  And although there are very clear laws that limits what they can and cannot do, some debt collectors are pretty low-down, and if you're not careful, they will get you to start paying. 

DON'T FALL FOR THE HARDSHIP PLAN OFFER!

Although a "Hardship Plan" may have it's place, once in a while, for the most part, they are not a very good solution to your problem.

In most hardship plans, you will agree to make a lower payment for about 6 months and then the creditor will re-evaluate your situation.  While this may help with your "cash flow" for a short term, in the long term, you will not be any better off.

OFFER A REDUCED AMOUNT AS A SETTLEMENT!

Believe or not, most debt collection companies will take a settlement on your account for much less than the current balance.  A 50% reduction is not unusual and depending on your circumstances, you may able to get an even better settlement reduction.

Check out some of the settlements we have done for our clients:

If you don't have a lump sum to offer, they will (in most cases) work out a TERM-SETTLEMENT plan.  Don't be afraid to ask!

Depending on how old your account is and your specific financial circumstances, the debt collector may have purchased your account from the original creditor for literally pennies-on-the-dollar, so they will usually take a settlement paid out over a 6-12 months, and in some cases longer.

What about a SUMMONS!

If you have received a summons, it is still not to late to work out a settlement or a repayment plan, but you need to take action quickly!  I have written many blogs detailing HOW AND WHAT TO DO IF YOU RECEIVE A SUMMONS.  Please take a few minutes to check out.

BOTTOM LINE:

Dealing with Debt Collectors is certainly not easy, but can be done.

Would you like some assistance?  Just let us know:

Photo Credit:   Sean MacEntee

Want to learn a method to become DEBT FREE?  Here's a recap of a real life success story you don't want to miss!

I had to comment on an article I read in the 4/2/14 edition of The Oregonian newspaper.

The title was:

           "Couple put strategy into action, paid off $127,000 in debt"

Here's a recap of what they did:

Had over $127,000 of debt:

• Student Loans
• Credit Card debt
• Auto loans
• Personal debt

It took them a little over 4 years, but they were able to pay off all of their debts and are now living DEBT FREE!

            HOW'D THEY DO IT (HOW YOU CAN TOO):

Find ways to save money/increase net funds. Here are some things you can do:

1. Adjusting your tax withholding.

If you are getting back a large TAX REFUND each year, consider changing the number of dependents/withholdings.  This alone generated about $100/month extra to put towards debts.

2.  Cut your household budget by trimming unnecessary "luxuries" (you can add them after you are DEBT FREE!)

Using grocery coupons. Become a "coupon expert".  This alone could help save you 20%-30% off your grocery bill each month!

Do you really have to have a "Starbucks" coffee each morning?  At an average of $4-$5 per day, that adds up to $100 -$150 each month!

Take a hard look at additional monthly expenses that you could "live without"...

• Gym membership (you rarely use)
• Magazine subscriptions
• Too many "premium cable channels"
• Going out-to-eat several times a week

I know...but think about this...

As hard as giving some of those things up seems,

HOW GOOD WOULD IT FEEL TO BE 100% DEBT FREE?

OK, you get the idea.  So now you've found an extra $100 -$200 per month.

3.  What now?

List all of your debts showing:

• Account
• Balance
• Interest Rate (not as important as you think at this point)
• Minimum payment

Sort by the smallest balance first (don't worry about interest rates).

You are going to make all of the minimum payments, but you are going to add the extra (let's say $150/month) you found by making sacrifices, etc. to the smallest balance.

Once that one is paid off, you are going to add the extra $150 plus the minimum payment required on that smallest balance and add that to the minimum payment you are required to make on the second smallest balance.

For example:

Let's say you had several cards, but the Visa Balance was $1000 and the Discover Balance was $2500.

The minimum payment for the Visa was $30/month and the Discover was $65.

You are going to make a payment of $30 plus $150 to Visa until it is paid off.  At the same time, you are making the $65 to Discover as well as all of the other minimum payments required.

Once the Visa is paid off, you are going to take the $180 ($30 + $150) and add that to the $65 due on Discover.  Now you ar making $245/month to Discover (and all of the other minimums as well). 

Once the Discover card is paid off, you take that $245 and add it to the mimium on card # 3.

Get the idea?

Can you imagine how excited you will be when you start seeing those balances down to $0!

Yes, it won't happen over night, but before you know it, you are going to be 100% DEBT FREE!

This is not a new idea.  This is a Snowball Debt Reduction Plan.

If you are serious as this couple was, get your Snow Ball Calculator today!

This all sounds great, you say, but what if you can't keep up with the minimum payments despite making cuts trying to find extra funds, etc.?????

That is a very real problem that anyone that has had:

• Loss of employment
• Death in the family
• Illness or Disability
• Divorce

...can attest to.

If you cannot afford a Snow Ball Debt Reduction Plan, then you should consider a...

               DEBT SETTLEMENT PROGRAM

Debt Settlement is for those who are doing and trying everything they can to keep from seeking bankruptcy protection.

Basically, funds are deposited in a bank account until there are sufficient funds available to begin negotiations with your creditors/debt collectors.

Depending on several factors, your debts may be settled for 50% or less.

Regardless of your financial circumstances, there is a solution! 

For more information about the couple who paid off the $127,000, visit their website at:

                 QueenOfFree.comQueenOfFree.com

Photo credit:

www.lendingmemo.com

When you have too much credit card debt, you only have a few options. 

Here are 3 options for credit card debt relief:

#1 Debt Management or what is commonly referred to as Credit Counseling

The credit card industry makes billions of dollars loaning us money to purchase things with credit versus using cash.

You can get several types of credit card interest calculator programs on line, but I found a good one at ZilchWorks.

You will be shocked to see how much interest and fees you really pay on your credit cards!

For example...

Let's say you have a Visa Card with a balance of $2,500 at an annual percentage rate of 21%.

How long (and how much) do you think you will repay if you make the minimum payments until the balance is fully paid?

I know it is hard to believe, but you could end up paying back anywhere from 4 to 5 times the original amount you borrowed!

If your one of the 7 out of 10 people in the US that has a credit card balance, and are only able to make the minimum payments each month, you should consider a DEBT MANAGEMENT PROGRAM.

In a DEBT MANAGEMENT PROGRAM, you will have:

• ONE MONTHLY PAYMENT
• REDUCED INTEREST RATES
• WAIVED LATE and/or OVER THE LIMIT FEES

Most Debt Management Programs take about 4 - 5 years to complete, and the consumer will not only be DEBT FREE, but save thousands of dollars in interest and fees.

Does a Debt Management Program hurt you credit score?

Common question, but the answer is not just a simple "yes" or "no".

There are many factors that go into determining a credit score and I've written several blogs over the last few years.  Go to "What Determines My Credit Score" for more information.

But for now, the best answer is "no" because with too much credit, your credit score most likely has already been damaged.

The only way to improve your credit score is to start paying off those debts and a Debt Management Program may be the way to go for you.

But, not everyone can qualify for a Debt Management Program. If that is your situation, then you should strongly consider a DEBT SETTLEMENT PROGRAM.

#2 Debt Settlement Program

Features of a Debt Settlement Program:

• Have ONE MONTHLY PAYMENT (that will fit your current budget)
• Each of your debt will be negotiated at a balance that is approximately 50% of the current balance.
• A QUALIFIED, PROFESSIONAL Debt Settlement Company will explain all of the pros and cons of a Debt Management Program.

There has been a lot of good and bad press written about Debt Settlement Companies.

Here are 3 tips on choosing a good Debt Settlement Company:

1)  Check with the Better Business Bureau.  It is not important that the company be an "accredited" company with the BBB.  The BBB charges a fee (no, the BBB is not a government agency but a "for profit" company.  What you are looking for is the rating (A+) and complaints.  Stay away from "shady" companies!

2)  Are they registered with the state?  Not all states require registration, but if your state does, DO NOT choose a company that is not on the state's list of registered Debt Settlement/Management companies.

3)  When you call the company, are you connected with someone you can understand and that seems to be more interested in you than just "signing you up"?  A good Debt Settlement Company will offer a FREE CONSULTATION WITH NO OBLIGATION.  Don't let anyone or any company pressure you into making a quick decision!

If you do not qualify for a Debt Management or Debt Settlement Program, then you may need to seek BANKRUPTCY PROTECTION.

#3 Bankruptcy Protection

Although the word "bankruptcy" brings up all kinds of sentiments and feelings, in some cases, it is not only the only choice, but could be the best choice!

If your financial situation is so dire that you cannot make payments towards your debts, then you must seek the counsel of a qualified attorney who specializes in bankruptcy.

He or she must offer an initial free consultation and demonstrate not only a professional but personal quality.  If you would just like to get more information without making any commitment, then click on the button below:

If you are overwhelmed by too much credit card debt, we can help!

Many people find themselves drowning in credit card debt and other unsecured debts, but don't know what to do about it?

We get calls daily asking for advice from people who have too much credit card debt in Portland, Oregon (where our office is).

Maybe you find yourself in this situation and have considered:

• Debt Management,Consolidation or Credit Counseling
• Debt Settlement
• Bankruptcy

There are many factors that should be considered before deciding on which program or debt solution would be appropriate for you:

Are you still working or have you retired?

Is you primary source of income from Retirement Sources?

• Social Security
• Pension
• 401(K)

If unemployed, what are the realistic chances that you will find a job within the next 3 months or so and if so, will you be earning the same as before or less?

Let's discus the first option, DEBT MANAGEMENT.

Debt Management is the term used today can also be referred to as "Debt Consolidation" or "Credit Counseling".

In a Debt Management Program, you most likely will have several credit cards or other unsecured accounts and you are making the minimum payments, but the interest rates and fees are making it almost impossible to pay off these debts within 15-20 years!

In a Debt Management Program, you will get credit card debt help as you will have:

• ONE MONTHLY PAYMENT
• LOWER INTEREST RATES
• MOST FEES ARE FORGIVEN
• A TARGET OF 48-60 MONTHS TO BE DEBT FREE!

How will this affect your credit score?

Your credit score is deteremined by several factors. Here are a few:

• How much debt to income you have (debt/income ratio).
• How much debt you have taken on compared to the available credit you have.
• Your payment history.
• Types of credit accounts you have.

You must realize that having too much credit is usually the main reason your credit score is low.

Any program that helps ELIMINATE DEBT, will ultimately help improve your credit score!

If after a thorough FINANCIAL CONSULTATION, it is obvious that you cannot afford a Debt Management Program, then may qualify for a Debt Settlement Program.

In a Debt Settlement Program, you will have ONE MONTHLY PAYMENT that is designed to fit your budget.

It is usually much lower than what would be required of a Debt Management Program's payment.

In a Debt Settlement Program, your accounts WILL NOT be getting a monthly payment.

Most people who choose Debt Settlement over Debt Management, have had a severe financial hardship or have had accounts that have been charged off or are severely delinquent.

Debt collectors are calling constantly.

In a Debt Settlement Program, a trained debt negotiator will arranage a reduced payoff of that account.

Once settled, the company or creditor will report it to the credit reporting agencies as "paid as agreed" or "settled as agreed" or in some cases, "paid in full" or "settled in full".

Now your credit report will show a $0  balance and your credit will slowly improve as your debts are paid!

Finally, after examining your first two options, you may be forced to seek BANKRUPTCY for protection from your creditors.

There are basically two forms of BANKRUPTCY available to most consumers:

Chapter 7 or Chapter 13 bankruptcy

Before considering bankruptcy, you should consult a Bankruptcy Attorney.

Look for a local bankruptcy attorney who specializes in bankruptcy.  Many law firms try to be a "one stop fits all" firm and that is not for you!

Click here for a FREE, NO-OBLIGATION CONSULTATION.

WE CAN HELP!