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Debt settlement plan-The most competent debt management program

ainmohd — Thu, 28 Jul 2011 16:21:50 +0000

If you are submerged in debts and looking for some debt management plan which won’t affect your credit ratings in any way, then you are simply building castles in the air. All debt management plans affect consumer’s credit scores some way or the other. Debt settlement plan is also no exception but it is probably the best possible debt solution one could think of. Read on to know why debt settlement plan is considered better than other debt management plans.

What is Debt settlement?

With a debt settlement program you can eradicate up to 40 to 45 % of your overall debts. You can strive to settle your debt on your own, but you might be more likely to be successful if you take expert help and hire a debt settlement company or an agency to negotiate with your creditors. A debt settlement company can certainly handle paperwork and negotiations with greater experience and expertise. The arbitrator persistently put forth sincere efforts to settle your account to a considerable amount which is acceptable to both the consumers and the creditors and the rest of the debt balance gets waived off. Debt settlement program is more profitable in comparison to debt consolidation or credit counseling plan from a consumer’s point of view and should not be even compared to bankruptcy in any way.

The repayment terms and procedure

Once you settle your debts, you need at least 30 months to repay the new debt amount whereas the average time debt consolidation and credit counseling program takes is approximately five years. There is a hell and heaven difference between the repayment durations among several debt relief options and debt settlement stays ways ahead in this race of attaining financial freedom.

The total amount repaid by the consumers

If you settle your debts you have to pay average 55% of your debts whereas with debt consolidation and credit counseling, consumers end up paying 100% of their debt along with average of a 5-10% interest rate for five years. In short with debt relief programs consumers pay off 125-145% of their debt, but in debt settlement the amount is much less.

Credit

Debt settlement has adverse impact on the consumer’s credit score. After settlement the creditor report the account as “settled” or “paid as agreed” whereas throughout the debt consolidation and credit counseling program the credit bureaus report that consumers are “currently enrolled in a debt management company” and keep reporting the same for another seven years. This not only blemishes the consumers’ credit history but also raises a major red flag for any creditors for mortgages or auto loans or credit cards, and personal loans in the long run.

To conclude, with all the above mentioned features and this new FTC law coming into effect, a debt settlement plan has proven to be one of the best debt management plans available right now.

Helpful Credit Repair Secrets

ainmohd — Wed, 25 May 2011 21:12:47 +0000

It can be quite beneficial to know a few credit repair secrets when your credit score is lower than you would like. A lot of hucksters will promise to fix your credit for you, but they are limited to how much they can really do on your behalf. That doesn’t mean you have to just let your score stay low, though. With that in mind, here are some things you can do to start bringing your score back up.

1. Get a copy of all three of your credit reports. If you live in the US you are–by law–allowed to get one free copy of your credit report each year. What you may not know is that there are three major credit reporting agencies (Experian, TransUnion and Equifax) and you should get a copy of each one. That’s because not all creditors use the same agency, so you need to get all three to get the full picture of where your credit stands. Remember, you can get a new copy once per year, so do it every year to stay up-to-date.

2. Look for mistakes. Let’s face it, people make mistakes. You are dealing with three different agencies, each of which is dealing with any number of creditors; that means there are plenty of opportunities for mistakes to be made. The problem is that one little mistake can have a serious impact on your credit score. If you find any mistakes, be sure to report them to the agency right away. Send a copy of any documentation to support your claim. This is one of the “credit repair secrets” others will charge for.

3. Pay on time, every time. There are a lot of different things that go into your credit score, and some of them you can’t do much about. For example, you can’t change how long you have had credit for. But you can start making all of your payments on time. Doing this consistently for several months will start to raise your credit score. Now, this may not give you a perfect score, but every point in your favor is worth it.

4. Fight! Fight! Fight! You need to take your finances seriously. Once you have the right mindset everything else will get easier. There will be setbacks, there will be times when you will want to splurge, there will be days you want to give up, but you will get past them unscathed when you’re fighting for your financial future.

Your credit score may be on the low side right now, but it doesn’t have to stay that way. There is a catch to these credit repair secrets. Sorry, there always seems to be a catch, doesn’t there? The catch is that you have to follow through on them. Just reading about them will accomplish nothing, in fact it could make things worse. What’s next is up to you. All it takes to have the future you want doing anything to take that first step in the right direction.

Pros and Cons of Declaring Bankruptcy

ainmohd — Wed, 25 May 2011 20:59:07 +0000

Mounting debt is no fun. The worst part of it all is that once you reach the tipping point it just keeps getting more and more out of control. If you have thought about declaring bankruptcy then you are not alone. The state of today’s economy has caused an ever-growing number of people to file bankruptcy. These are hard working people who had every intention of paying what they owe, but then circumstances out of their control made that next to impossible. Before you make the decision–one way or the other–you should know some of the pros and cons of declaring bankruptcy.

1. If you are really deep in debt, and most of what you owe is credit card debt, then bankruptcy can eliminate or drastically reduce how much you eventually pay. However, it won’t eliminate all kinds of debt (such as back child support or student loans), so you need to consider what type of debt you’re carrying.

2. Your creditors are not allowed to contact you once they are notified that you have declared bankruptcy. They either have to deal with the court or your attorney. In effect, you lose control of how your creditors will be paid (or even if they will be paid), so there isn’t any good reason for them to be calling you anyway. Not being harassed by the constant stream of telephone calls is one of the pros of declaring bankruptcy.

3. Having a clean slate financially is a good reason to file for bankruptcy. It will give you the opportunity to start fresh and get it right from this point forward. This clean slate will also apply to your credit report (sort of). The debts covered under the bankruptcy will be removed but…

4. One of the major downsides of declaring bankruptcy is that it will leave a negative mark on your credit report for a full ten years. Also, while you won’t be listed as owing money to the creditors who were paid off, they can make a note saying they were not paid back under the original terms of your agreement.

5. It’s a hassle. The new bankruptcy law makes you jump through a fair number of hoops before you’re allowed to file. You will have to provide all kinds of financial information, and there is also an income qualification for some types of bankruptcy. In some cases you may have to attend credit counseling as part of the process.

6. What a lot of people don’t realize is that going bankrupt causes a lot of stress. Many marriages have come to an end as a result. People can become depressed after filing for bankruptcy, too. Then there are those who a lowered sense of self-esteem because they feel bad about not being able to live up to their word to pay back what they owe. You may scoff at these things, but they are a very real problem for a lot of people, and should be considered when thinking about declaring bankruptcy.

When should You Consider Bankruptcy As An Option?

ainmohd — Wed, 25 May 2011 20:33:59 +0000

With the economy being as sluggish as it is, more and more people are getting deeper and deeper into debt. If you find yourself struggling, you should know that you are part of a growing group of people. You may have even questioned whether or not you should file bankruptcy. After all, the companies and lawyers who sell bankruptcy services make it sound like such an easy solution. They claim all of your debts will be wiped out and you will be able to start fresh.

While that sounds wonderful, there’s more to it than that. Before we get into some reasons why you should not file bankruptcy, it’s important to know that being in debt most likely isn’t your fault. You had every intention of paying everything back when you took out your loans or charged things to your credit cards. Not only that, you also had the capability to do so. But then your creditors started playing their games and hit with all kinds of fees, or maybe you had an unexpected emergency that cost more than you could handle at the time, or maybe you were a victim of the bad economy and had a drastic reduction in your income. Whatever the reason, you are now at a point where something must be done.

Bankruptcy shouldn’t be considered as an option if you can pay off what you owe in a few years. You will need to list all of your debts, then calculate how long it will take for you to repay them. Figure out how long it will take if you pay the minimum monthly payments, and also how long it will take if you pay more than the minimum. This is only part of the equation because you have to be sure you have enough income to cover whatever amount you come up with. If you can get your debt under control in three to five years then you probably should not file for bankruptcy.

Not all debts will be erased if you file bankruptcy. Most may be eliminated, but things like back child support and student loans will not be wiped out. You will still have to pay the full amount on those. No matter how good the bankruptcy pushers make it seem, there are some obligations that will not go away. So, you need to consider what kind of debt you have before you even consider bankruptcy as an option.

If you will be in the market for a new car, new home, or anything that requires a credit check in the next ten years, then you should not file bankruptcy except in the most extreme of cases. That’s because it will stay on your credit report for ten years, and will make you a very high credit risk, a risk that creditors may not be willing to take.

To put all of this another way: you should not file bankruptcy if you have been led to believe it’s an easy solution to your financial problems. Now, that doesn’t mean you shouldn’t file, but that you should be realistic about what it entails.

The Foreclosure Process Explained

ainmohd — Tue, 17 May 2011 03:40:00 +0000

Step 1: I am behind on my mortgage payments

If you fall behind in your mortgage payments or your mortgage company bills you for additional charges you cannot pay or do not believe you owe and refuse to pay, you will receive any number of letters stating that if you do not pay, you may face foreclosure, lose your home and/or have negative credit information reported about you. Until you receive the official notice in Step 2, you are not really in foreclosure (although it may be treated that way by the mortgage company or credit agencies).

Step 2: I received a Notice of Intention to Foreclose

If you are less than 24 months behind on your mortgage, are behind less than $60,000 and do not have a federally insured mortgage (FHA), you must receive an Act 91 notice before your mortgage company can file a foreclosure case against you in court — at the top it says “Act 91 NOTICE — TAKE ACTION TO SAVE YOUR HOME FROM FORECLOSURE”. This notice may also be combined with a Notice of Intention to foreclose (for those whose original loan amounts were $217,873 or less), advising you of how much you are allegedly behind on payments or any other basis upon which the mortgage company claims you are in default and stating what you must do to reinstate your mortgage. If your original mortgage loan amount was $217,873 or less but you do not meet the criteria above for receiving an Act 91 Notice, you still must receive a “Notice of Intention to Foreclose”, advising you of how much you are allegedly behind on payments or any other basis upon which the mortgage company claims you are in default and stating what you must do to reinstate your mortgage.

What Is a 401(k)

ainmohd — Sun, 08 May 2011 23:35:06 +0000

When searching and sifting through copious amounts of confusing and conflicting information concerning financial retirement savings and plans it is quite likely that you have come across the term 401(k).

Different Types of IRAs

ainmohd — Sun, 08 May 2011 23:33:53 +0000

With all the three letter names floating around our society what is one more? Really? It’s not like we don’t have enough to worry about without adding this burden. However, when it comes to real life, these three letters will have a greater noticeable affect on people than many of the other three letter names that we here on a regular basis such as the CIA, FBI, NSB, ATF, and countless other abbreviations that are hidden behind three little letters.

Retirement Plan Types

ainmohd — Sun, 08 May 2011 23:16:58 +0000

The four common types of retirement plans include 401(K) plans, Keough Plans, IRAs (individual retirement accounts), and qualifying pension or profit sharing plans offered by corporations.

Serious Considerations For Financial Retirement

ainmohd — Sun, 08 May 2011 23:06:26 +0000

There are a few things you should keep in mind when planning for your retirement. First of all, you probably shouldn’t hold your breath when it comes to social security being able to cover even a small portion of your retirement if the service even exists in any form of its former self by the time you are facing retirement.

Retirement Planning: Cost Of Living

ainmohd — Sun, 08 May 2011 22:58:05 +0000

There are many things that people plan for when planning their retirement. They plan for the travel they wish to do, to have money for gifts for the grandchildren they hope to have, and all kinds of wise and practical thing. In the process, however, many people neglect to plan for where they wish to live upon retirement. We are seeing a growing trend of retirees moving to certain communities.