Repossessions, wage garnishment, property seizures and foreclosures are words which strike fear into the heart of every consumer.
The general assumption is that overdue debts will result in these drastic measures. Sure, if you've put up property as collateral on a loan which you are unable to pay, it will typically be seized or repossesed. But the same does not necessarily hold true for unsecured debts.
In reality very few creditors will ever push for garnishment on small unsecured debts. Garnishment and seizure are a creditor's most effective weapons to collect an outstanding debt, but they are also very expensive and time-consuming to the creditor. While it is within the creditor's legal rights to pursue collections through any of these means, the cost of recovering a debt often exceeds the amount of the debt itself, and so it's not always cost efficient to force a collection.
Sadly enough, in the United States alone thousands of bankruptcies are filed every week in response to collection efforts on unsecured debts under $5000. Consumers are so intimidated by creditors that they fold under the perceived pressure, resorting to bankruptcy as a means of escaping an unsecured debt. If these same consumers had simply ignored the threatening letters and intimidating phone calls, they would have discovered that most creditors are all bark and no bite. Bankruptcy is arguably the worst type of negative listing you can have, and it is almost certain to wreak havoc on your credit report for the next ten years. You should therefore consider bankruptcy only as a last resort, and possibly never as an option to escape a relatively small, unsecured debt.
What are the warning signs that I am in too much debt?
There are numerous potential warning signs to let you know that you may be in too much debt and in need of debt management. These warning signs include avoiding looking at your bills and credit card balances, paying bills late or missing payments entirely, frequently borrowing money from friends and family, frequently exceeding credit card limits, and using credit card cash advances to pay bills. If you find any of these situations apply to you, you should contact us immediately for a free debt management consultation.
What Is Your Debt Settlement Program?
With our Debt Settlement Program, we negotiate with creditors to accept a lower amount than what they tell you is actually owed. If you have been a good and loyal customer, you have probably already paid more than what you have originally charged. Based on your financial hardship and payment history, we are able to negotiate on your behalf for the best settlement possible. In addition, we ask for everything in writing before the debt is settled. We make sure the creditor sends a letter stating that the payment will fulfill the debt obligation and that they will report the account to the credit bureaus properly. We also negotiate to have the creditors and collectors report the account to the credit bureaus as, “Settled”, “Paid” or “Paid as Agreed”. In cases where your relationship with the creditor has not been good, we may use alternate methods of negotiation. One method is to “reset” your account showing you as current again. As part of the “reset”, we may negotiate a reasonable interest rate!
How do I get my Free Debt Relief Consultation?
To get your FREE Debt Relief Consultation, simply complete our request form.
Do you lend money?
No, we do not provide loans. We provide a debt consolidation service which will allow you to satisfy your current obligations without incurring more debt. (See Why a loan won't help you for some reasons why the last thing people with credit problems need is more debt)
Can bankruptcy be a solution?
Bankruptcy is considered by many as a easy solution to credit problems. To some, filing for bankruptcy protection is a basic part of their financial strategy. To others, declaring bankruptcy is a "last-choice" solution only to be considered in the most dire of circumstances. While bankruptcy may be appropriate for some, there are alternatives that can help reduce or eliminate debt without taking the drastic step of declaring a chapter 7 or chapter 13 bankruptcy. Our debt settlement program achieves debt relief by reducing the total amount you owe through a documented debt negotiation process. We negotiate with your creditors to forgive a portion of your balance based on your financial hardship. You can achieve a savings of up to 70% or more on your current balances.
How will debt settlement affect my credit?
Your credit report is going to show a history of late payments until a settlement is paid. For instance, your smallest creditor should be settled in about six months. That’s about how long you’ll show a history of late payments. As we negotiate and settle each of your debts, your credit report is going to show that they have been settled and have a balance of zero. Whenever you apply for credit after completing our program, creditors are going to look at your credit report to see if you took care of your debts. When you complete our program, you will be able to answer "Yes, I took care of my debts." Remember we want to pay your creditors just as badly as you do. Anything you do to get out of debt; short of paying to full amount upfront, will have a negative affect on your credit.
Will the creditors start calling and harassing me?
Yes. As someone goes delinquent with their accounts, especially in the beginning, they will get creditor calls. However, we have developed steps that our clients can use that are effective in reducing and often eliminating phone calls from creditors. We have a letter that will be sent to each of your creditors instructing them to stop calling you as part of their debt collection efforts. Instead the creditors are informed that you have enrolled into our program and that you intend to make a settlement offer you have accumulated a reasonable amount of money to offer. NO COMPANY CAN STOP ALL CALLS. But we can reduce the number of call and make it easier to answer the phone.
How do I pay for these settlements, how does it work?
We work out a monthly amount that each client can afford to pay. That amount is electronically debited from their personal bank account and deposited into their "settlement account" at a federally insured bank on the date (s) they work out with our Debt Consultants.
How long before a debt is settled?
That’s really up to you. We’ve got you set up to pay off all your debts within months but chances are that after you get back on your feet and you’ll be able to add a little extra here and there. The more money that you make available the faster we can ask or offer settlements.
Can I negotiate my debts with the creditors myself?
Absolutely, but lets be honest with each other unless you are a dentist you probably go to a dentist to get your teeth taken care of right? So why would you try to negotiate a debt when you don’t know the rules or have the connections and experience? Remember you’re going up against seasoned professional collectors that do this for a living and they normally don’t take individuals seriously.
Why does the money have to be in the bank before you can start negotiating my debts?
We are able to offer and ask for settlement amounts based on what you have saved up. If you aren’t able to pay the amount they are willing to settle for immediately then they will not be inclined to do the deal. Remember, they just want to get paid and get paid today. You don’t go to the grocery store and offer to pay for the food next week do you? Besides as far as they are concerned, lending you a line of credit got you into this situation despite any personal issues you may be going through. Being able to pay immediately is the key to the success of our program.
