Debt ict

Just information about debt

Month: August 2018

Understanding Credit Card Debt Settlement

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Excessive usage of credit cards can ruin your life and put you into deep financial trouble. The best way to manage your finances is to keep your credit card outstanding low and if they are high, opt for credit card debt settlement. According to a study conducted by Equifax, a credit report agency, credit card debt burden of some of the US households is as high as 17% of their income and this does not cover data related to store specific credit cards.

Need for Credit Card Debt Settlement
Credit card debt settlement is the best way to get rid of your mounting credit card debt and improve your finances. Tempting advertisements and credit cards by the various issuers encourage us to use our credit cards quite frequently even for smallest of purchases. However, what we do not realize or think about is the exorbitant cost of doing so. It is a vicious cycle, wherein you borrow without thinking and then struggle to deal with late payments, heavy interest charges and penalties.

The ideal way to deal with credit card debt is get rid of it. If you have the resources, pay it off. But if you are not in a position to do so and are on the verge of declaring bankruptcy, take the help of a professional debt settlement company. The reason why a credit card company would agree to settle your debt for a lesser amount is the fear of getting back nothing if you declare bankruptcy. So, the best way to settle your payments is to negotiate with the lender for waiver of a portion of the outstanding amount.

Benefits of Credit Card Debt Settlement
Credit card debt settlement allows you to ethically settle your debts and avoid bankruptcy. On the other hand, credit card companies get a proportion of their money back, which is better than getting nothing. A settlement company generally acts as the negotiator between the credit card holder and the credit card company. But before you decide to authorize a settlement company to negotiate on your behalf, ensure that it is authorized to do so and has a good reputation.

Credit card debt settlement will have a negative impact on your credit score since you have chosen to break the original terms of your contract with the credit card company. So, you should only opt for this option if you are on the verge of bankruptcy or have been threatened with legal action or both.

Step by Step Approach to Get an Unsecured Debt Consolidation Loan

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For people who have a lot of credit card debts, obtaining an unsecured debt consolidation loan seems to be a very perfect financial solution for them to pay off their outstanding balances to their creditors. If you are also facing the same problem, let’s follow the steps below:

The very first step you should take is to determine how much unsecured debt you are having currently. At the same time, list down the interest rates for each debt. After that, you should get ready to look for the lenders you are familiar with that offer this specific loan. Obtain necessary information related to interest rates, duration of repayment and the minimum amount for monthly repayment. Find out whether there is any additional fee incurred.

Next, do a comparison on the interest rates of your current unsecured debts with the interest rate of the new loan. You should only apply for debt consolidation loan when its interest rate is much lower than your current ones. Besides, evaluate your financial position carefully to see whether you are able to make the monthly repayment. If you are not able to cope with your income, never ever apply for it as it will spoil your credit score later.

Then you are required to check your eligibility with your preferred lender. If you are qualified, then you can start submitting your application. Once your loan is approved, you are advised to pay off all your unsecured debts immediately.

Finally, after you have paid off all your debts, start focusing your repayment on the new loan. Work out your monthly budget and follow your budget strictly. A last reminder for you – STOP creating new debts. For more information about unsecured debt consolidation loans , visit DebtConsolidationLoansPlan.com.

Legal Helpers Debt Resolution Did Not Help or Resolve Debts

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Illinois Attorney General Lisa Madigan said the consumer debt settlement firm Legal Helpers Debt Resolution LLC failed to live up to its name, instead acting as a -front- to collect hefty fees from desperate consumers. On July 27, 2012, the Chicago Tribune reported that Legal Helpers Debt Resolution agreed to a settlement in which it will refund $2.1 million to its Illinois customers.

The Better Business Bureau (BBB) assigned a rating of -F- to Legal Helpers Debt Resolution based on 213 complaints that have been closed with BBB in the last three years, 100 of which were closed in the last 12 months. Legal Helpers Debt Resolution has more than 2,000 clients in Illinois, meaning the $2.1 million settlement will provide an average of about $1,000 in restitution to customers. Many debt settlement firms take advantage of struggling consumers who are overwhelmed with credit card debt, but it is important for people to understand that credit card debt is considered -unsecured- and can often be discharged through a Chapter 7 or Chapter 13 bankruptcy. Many debt settlement companies advertise themselves as being more effective alternatives to bankruptcy, when in fact, they collect larger fees without delivering any of the results.

Kevin Benjamin

Benjamin Legal Services

What is Debt Consolidation

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Debt consolidation means taking out one loan to pay off many others that secures a lower interest rate and a fixed interest rate or for ease of servicing one loan only. Generally, it involves a secured loan against an asset that serves as collateral most probably a house. In such case a mortgage is secured against the house. Since, by collateralizing the asset owner agrees to allow the forced sale of the asset to pay back the loan. All this involves minor chances of risk to the lender so the interest rate offered is lower. Sometimes a heavy discount is provided by the debt consolidation companies on the amount of the loan. The decision to consolidate must be taken carefully as consolidation affects the ability of the debtor to discharge debts in bankruptcy. As compared to an unsecured loan from a bank a debt payment by credit card is more beneficial as credit cards carry much large interest rate. Debtors those having property whether it may be a car or home get a lower rate through a secured loan by using their property as collateral. As a result of this the total interest and the cash flow paid towards the debt is lower which ensures the debt to be paid off sooner incurring less interest. Companies that are engaged in these debt relief programs are well-versed in dealing with various types of creditors, like mortgage companies, banks, credit card companies etc.

They are the great rescuer as they interact with creditors to reduce the amount of money you owe to them and can even convince creditors to cut back on the interest rate on your previous borrowings, thereby assisting you in finding your way out of this debt-ridden situation.

The Article is written by consolidationdebts.co.uk/ providing consolidation debt and debt loan consolidation Services. Visit for more information on consolidationdebts.co.uk/Products & Services___________________________Copyright information This article is free for reproduction but must be reproduced in its entirety, including live links & this copyright statement must be included. Visit consolidationdebts.co.uk/ for more services!

How Much Money Can Debt Consolidation Save

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Debt consolidation can work in one of two ways: the first is that you get a lump sum to pay off all your credit cards and the slate is wiped clean and you just repay the loan. The second is that the debt consolidation company will contact your creditors and negotiate a new rate of interest with them and you simply pay the debt consolidation company and they take care of paying your creditors.

If we take a basic example we can work out how much the potential savings are each month. If a person has $25,000 of credit card debt (which unfortunately isnt unreasonable) at a rate of 18% per annum and they are paying $500 a month then it will take nearly 8 years to pay off the debt and they will have paid over $21,000 in interest – almost as much as the original debt!

A debt consolidation company could offer a rate of 12% per annum for six years in which case the repayment is reduced slightly to $488 per month and the amount of interest paid is just over $10,000. Even when the charges and other fees are added its unlikely to be anywhere near as much as the credit card debt.

However, there might also be some scenarios where a debt consolidation loan ends up costing more than the original debt due to the long repayment periods. Take this example:

A person has a $15,000 5 year unsecured loan at 9% and a $10,000 2 year unsecured loan at 15%. The $15,000 loan costs $311 per month and the $10,000 loan costs $484 a month for a total monthly repayment of $795.

A consolidated loan company says they can reduce the rate to 8% over 7 years so you are only paying $390 a month. This means you have to pay $7,676 in interest over this period. However, if you continued to pay off the loans at the original rates you would only have to pay $5,276 in interest. The $2,000 difference is one of the ways the debt consolidation companies make their money.

Debt consolidation could be a tradeoff between lowering your monthly outgoings but increasing the length of time you remain in debt and increase the amount you have to repay so before you go ahead and sign up to a debt consolidation company make sure you have calculated exactly how much you could be saving.

Also remember that if you are consolidating your debt in to a loan then it is usually secured on your home which could be repossessed if you fail to meet the monthly repayments.