Debt Consolidation Blog

Archive for the ‘Credit Counseling’ Category

Credit report is history that shows your payments habits. If you default on payments, the creditors will report to credit reporting agencies that maintain payments history. If you found a creditor listing on your credit report, then there are chances that you owe money to that creditor or any of its business entities for with the creditor underwrites.

When you find creditor listing on your creditor report, do not overlook as that may hurt your credit score. If you found a creditor listing on your credit report then here are the things that can likely to happen:

Creditor listing appears when you owe money to it or its business entity, pay off: it is likely to list on your credit report when you miss monthly payments. In that case, contact you creditor and speak to them and explain your hardship. Draft an appealing hardship letter requesting to lower the interest rates and monthly payments that can be affordable to pay off the bills. If you are in serious trouble and can not afford to pay on monthly basis, try to negotiate with them and settle you account by paying the amount affordable by you. With debt settlement, you can clear the debt much lower, almost 50 percent of the amount you owe and get out of debt legally.

If you are not sure of the entry listed on the credit report, then verify it whether you owe the dues. Send the debt verification letter to creditor requesting to prove the debt with them. This is important because negative entries on your credit report may harm your credit score and penalty for which you do not responsible is disgusting. If they provide proof of debt then work out with them for repayment plan or debt settlement to clear the debt faster.

If you found the creditor listing for which you are not responsible then dispute the listing with your creditor. Contact creditor and request them to co-ordinate with credit reporting agencies in a process of updating the account correctly.  While sending a dispute letter to creditor attach documents which proves your stance and make sure to send them through certified mail with acknowledgment which let you know that creditor has received your letter and when.

If you owe money to creditor and it is for a long period of time then check for statue of limitations before making payments as you can avoid making payments if the account exceeds certain period of time and still the creditor seeks payment. You can use statue of limitation as a defence and make sure to check the statue of limitations of the state you are residing currently.

Articles on this site have been acquired from a variety of sources.  No content on this site should be considered financial or legal advice.

Due to present crisis, one word that we hear from most of the people is debt. It is because decrease in earning capacity of the individuals by which they are not able to pay their monthly payments like mortgage, credit card debt payments etc.

The reason for this credit card debt is that the average American carries about five credit cards with an average balance of $10,000. There are around 650 million credit card in circulation of which around 50 million pay off their balances every month while 115 million do not pay their balances. The remaining are put unused.

The credit card industry makes their profit from the APR interest rate they charge on credit card purchases. Due to increased burden of debt many people have declared themselves bankrupt in USA. They do so because filling bankruptcy, people can clear all their unpaid expenses but unfortunately they fail to remember that filling bankruptcy will hinder the chances of getting credit in future again.

Fortunately, in this economic hardship time people should be aware of the facts that bankruptcy is not the only way to recover form the debt. Many credit card lenders offer credit card hardship programs to who is suffering from any kind of financial stress.

One might be thinking what actually this credit card hardship programs are? Basically this program is debt settlement agreement with your lender. In this agreement your lender may reduce the APR interest rate that they charge on your balances which leads to reduce in monthly payments which can be affordable to you.

But one must understand that credit card hardship programs will not completely eliminate your debt instead there are several downsides of credit card hardship programs. So, one must make sure to find out the terms and conditions of the hardship programs before availing them. Call your lender to find out the new terms of the programs and find out terms and conditions.

Before availing the credit card hardship programs, one must be aware of certain myths and facts about this sort of programs. This article will try to give out some information about common myths that many people may not have an idea.

One may think that debt which has been reduced by the lender will give you relief and forget about it but it is not the case. In this case you may receive 1099-C tax notice. It means any borrower who benefited by the debt settlement from the lender for amount more than $600 has to file the 1099-C forms with IRS as it considers this settlement as income to borrower. For this reason one must consult your attorney to resolve all the issues related to debt settlement.

Other thing many people think that choosing the credit card hardship programs will not affect your credit score, but this is not the case, as you try to settle the credit card balance you may default the payments for at least two to six months in this case the defaults will affect your credit score. So beware of these things when dealing with credit cards.

Articles on this site have been acquired from a variety of sources.  No content on this site should be considered financial or legal advice.

In the time of economic recession many individuals are being burdened with more of debts and every now and then bankruptcy is being reported. To help them stand back on their feet there is credit counseling. You definitely need the credit counseling if:

• When you find that you can’t even pay the minimum credit card charges.
• In case you are paying late for your utility bills.
• In case you are being constantly hounded by various collecting agencies and creditors.
• In case you fail to crack a negotiated deal with your creditor.

All you need to take care of is, choose the right credit counseling agency or the individual. Few years back, National Foundation for Credit Counseling dominated the scene. It was the non-profit organization which worked with the ultimate aim of negotiating the lower interest rates or the payment plans and helped individuals avoid bankruptcy.

There are hundreds of agencies which are competing with each other. Some of them provide excellent services and negotiate well the repayment plans. But, there are many service providers which are fraud and charge exorbitant fees. While choosing the credit counseling service provider, make it sure you keep in mind that the cost of credit counseling should not exceed the benefits of credit counseling.

When you are looking out for credit counseling service provider you must watch out for:

• Large Upfront cost: Consumer Credit Counseling Services charges a nominal fee of $10 set-up charges. In case you are being asked more than this to pay. It is a warning bell for you. Many-a-times it has been reported that many companies after the upfront payment vanish in the thin air leaving people all the more in the disgusted situation.
• No official recognition: credit counseling firms which have the certification from Association of Independent Consumer Credit Counseling Agencies or National Foundation for Credit Counseling are the legitimate ones. Other should be ruled out from the list. Thus, ask for the certificate proof. As it concerns your financial security.
• Missing payments: keep a check as to how much is being passed on to the creditors and what is charged by the company as any missed or delayed payment can hamper your credit report adversely.
• Unrealistic promises: if the credit counseling agency makes tall promises don’t be lured. If someone promises you to settle your debts for little money don’t give in easily. No creditor is crazy to settle for much less than what he lawfully deserves.

Articles on this site have been acquired from a variety of sources.  No content on this site should be considered financial or legal advice.