Debt Management Plan (DMP) - Speak to a counselor to explore this option, which can help with credit card debts, and well as medical and education expenses. The DMP program will provide you with the ability to start paying down your outstanding debt, waive fees, minimizing your payments, interest rates, deal with credit card companies, and address related fees and more.
Debt settlement is a process in which you enlist an outside company to help negotiate and settle your debt with a certain creditor. In exchange for a fee, debt settlement companies will work to lower your overall debt and may negotiate a lump-sum payment with your creditors on your behalf. They will typically ask you to stop making payments to the creditor while they negotiate your settlement, which can hurt your credit. If the company succeeds in reaching a settlement, you will still pay your creditor a portion of your debt, but usually not all of it. In addition to the cost and impacts to your credit, there are tax implications with this method, as forgiven debt is typically reported to the Internal Revenue Service as income.
There are four other popular options that you could discuss with your creditors. The first is to have your interest rates reduced. If you have high interest debts of, say, 15% or higher and could get them reduced to maybe 12%, you would end up with much lower monthly payments, which could make it possible for you to meet your obligations. A second option worth discussing would be a timeout period of two or three months during which you would no longer be required to make any payments. This would give you time to get your finances reorganized and to save money that might allow you to catch up on your payments. A third possibility would be to have some or all of your credit card debts converted into repayment programs. You would likely be required to give up your credit cards but in turn you would have fixed payments for a fixed amount of time after which you would be completely debt-free.
Credit counseling is a service offered to those struggling with credit and debt. Our expert coaches will go over your personal finances and offer expert advice that is tailored to your unique situation. We will help you create a spending plan to cover all of your debt payments and living expenses, provide personal finance tips and help negotiate better payment plans with your creditors. We will set up a plan to stop the collection calls.
A debt consolidation loan allows you to combine all your debts into a single, lower interest rate loan. It is particularly beneficial when you have high-interest rates debts. Combining your debts this way allows you to lower your monthly payment and makes it easier for you to afford your monthly bills. There are several different types of loans you can use to consolidate your debt.
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Carl has years of experience helping people tackle debt. As a Senior Financial Advisor, he knows the ins and outs of debt consolidation and debt management. He holds a Masters Degree in Finance and according to him, not all debt problems are the same and that’s why it’s important to take a look at the different options available for your situation.
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Checking your credit reports from each of the three main credit reporting agencies is easy. Under the Fair Credit Reporting Act, you have the right to obtain a free copy of all three credit reports once each year. These free reports can be accessed on the government-mandated site operated by the big three credit bureaus, AnnualCreditReport.com. You can also check your credit through our free credit report card, which provides a snapshot of your credit as well as letting you dig deeper into each factor that drives your score.
There are a number of non-profit organizations currently offering debt management services, which include both debt consolidation and debt settlement. Some companies may offer both, while others may specialize in one or the other. In order to be eligible for either of these programs, you must be able to show that there is not sufficient income to pay your bills as they currently require. If this sounds like your situation, debt relief may be just a phone call away.
Companies that want you to lie about credit history or create a new credit identity can get you into legal trouble. Companies that provide “new” identifying information may use stolen Social Security numbers, and if you use this number, then you are committing fraud. Likewise, using an Employee Identification Number or Credit Profile Number provided by these companies is a crime. Rather than committing fraud, take the steps below to improve credit on your own.
There are many reasons to start on the path to credit repair. The biggest reason is that credit affects you every day. It affects the interest rates you pay on credit cards and loans, including mortgages, and can result in higher security deposits for rentals. It can also affect what you pay for insurance rates and what credit limits you qualify for. Good credit can also mean financial freedom where you don’t have to depend on cosigners to help you make purchases and secure loans.
Debt settlement companies can’t collect a fee until they’ve reached a settlement agreement, you’ve agreed to the settlement, and you’ve made at least one payment to the creditor or debt collector as a result of the agreement. But you could still end up paying a portion of the debt settlement company’s full fees on the rest of your unsettled debts, says Bruce McClary, vice president of public relations and communications at the National Federation for Credit Counseling.
There is no magic wand, but you can fix your credit problems. This Complete Credit Repair Kit shows you how to repair your credit quickly. Also learn how to avoid bankruptcy, foreclosure, and identity theft correctly which will ultimately lead you to your stress free lifestyle just like many others who have used our kit. They agree it’s a great buy. Just try!