Colorado Study Looks at Debt Consolidation Services
The Colorado Attorney General’s Office found that people who sign up for debt consolidation services often end up paying money without really solving their debt problems, according to the Grand Junction Daily Sentinel.
The study found that less than 10% of people who signed up with 42 debt settlement and debt consolidation services between 2006 and 2008 had actually paid off debt or completed their agreements. Read the rest of this entry »
(No Ratings Yet)
Loading ...House Votes to Move Up Effective Dates of Credit Card Reform Law
The House of Representatives voted to move up the effective date for some of the legislation proposed under the Credit Accountability, Responsibility, and Disclosure Act (CARD). After constituents complained in the wake of receiving increases on credit card interest rates, lawmakers realized that something had to be done. Unfortunately for many of us, the credit card companies have already increased rates. The legislation that would be affected if the Senate likewise votes to move up effective dates includes:
- Banning retroactive rate increases on existing credit card balances.
- Protection from “triggered” increases in rates or fees resulting from one payment being late by a few days.
Unfortunately, consumer rights and welfare are likely to remain at the bottom of the priority list for credit card companies; they have tremendous influence in Washington D.C., and typically respond to regulatory pressure by passing along costs to customers.
Debt Management and Eliminating Credit Card Debt: The Consumer’s Solution
The best way to deal with credit card debt is by eliminating it. Whether you formulate your own plan for paying off your credit card debt, or seek help through credit counseling services, eliminating high cost debt is a strong step toward improving your finances. Here are some tips for dealing with credit card companies, paying off debt, and getting debt help.
- Shop credit card rates and offers: Compare credit card offers and don’t hesitate to transfer balances to new cards offering lower annual percentage rates (APR’s). The APR includes the interest rate and fees calculated as an annual percentage.
- Using balance transfers: Transferring balances between cards can work if you’re willing to carefully read offers and can pay off balances transferred during the initial offer period. Don’t stop reading at “zero percent for 6 months,” because balance transfers often carry transaction fees of three to five percent for each transfer. If you’re transferring from high rate cards, paying transaction fees may be worthwhile, but take time to do the math.
- Vote with your scissors: Stop using credit cards. It’s best not to close credit card accounts, because this can negatively impact your credit score. Pay off your highest APR account first, then concentrate on the next highest rate card, and so on until you’ve paid off your credit card debt.
- Create (and keep) a cash-based budget: The key to successful debt management is not carrying balances on credit cards. In order to do this, you need to make a household budget based on available cash.
- Getting debt help: If you’re stressing out over debt and it’s causing problems in your life, please seek debt help. You can work with a credit counseling service to arrange debt consolidation and affordable repayment terms. Regaining peace of mind and restoring financial security is well worth the effort.
(No Ratings Yet) Loading ...Get Help With Debt Instead of Walking Away from It
You’ve probably heard about people with large smounts of debt who’ve chosen to walk away from paying it off. But even if you feel desperate to be free of credit card debt, loans, and other bills, intentionally defaulting on it really isn’t a good idea.
Reasons for Defaulting
People walk away from debts for various reasons. They may be angry at banks who jack up interest rates and refuse to ease the terms of their accounts. Some people may be disgusted with themselves for getting so deep in debt. Others may decide to stop paying on credit card debt because they plan to file for bankruptcy. Read the rest of this entry »
(No Ratings Yet) Loading ...Credit Card Debt: Had Enough?
U.S. consumers are battling record unemployment rates, rising health care costs, and falling home values. And guess what? Meanwhile, the credit card companies stand at the ready, raising interest rates, imposing fees, and threatening to impose new fees on those who act responsibly and pay their balances in full each month.
Credit Card Debt: Is it Worth It?
Today consumers use credit cards for everything from charging cat food to buying trips around the world. We book hotels, buy flat screen TVs, and charge airline tickets with credit cards. In return, the credit card companies provide convenience along with certain purchase protections. Credit cards are definitely a convenience, but convenience turns to consternation when you carry revolving credit card debt. Finance charges are added to your balance. Minimum payments are so small it can take decades to pay off your balances. Your balances rocket skyward while your bank balance free-falls. You pay and pay. And you owe.
Credit Counseling and Debt Consolidation: Finding Your Way Free
If you’ve got credit spending under control, congratulations. But control doesn’t mean waking up in the middle of the night wondering if your last purchase at the TV shopping marathon put your ultra titanium credit card over the limit. If you’re stressing out with credit card debt, it’s time to get help.
Consumer Credit Counseling Services Can Help
These services help debtors learn how to manage their finances on a cash basis while paying off credit card debt with an affordable repayment plan. Depending on how much you owe, and how much you can pay, a credit counseling service arranges repayment terms with all of your creditors, and you make one scheduled payment to your credit counseling service. Your credit counseling service distributes payments to your creditors, so you also receive the benefit of low cost debt consolidation.
Professional credit counseling services can help you eliminate debt for a relatively low cost, especially when compared to the finance charges typically accruing on credit card debt. The downside to credit counseling is minimal, but you need to agree to certain requirements and understand what credit counseling services cannot do.
- Say good bye to your credit cards: Consumer credit counseling services negotiate affordable debt repayment for their clients, but credit card companies require that consumers repaying through such arrangements close all of their credit cards. That Visa stashed in the sock drawer? Toast. You are also required to agree that you won’t open any new credit accounts for the duration of your repayment plan.
- No “instant credit repair”: Credit counseling services cannot erase prior delinquencies from your credit reports, but by repaying debt over time, and lowering your debt levels, your credit should improve.
- No guarantees: Credit counseling services can help you get out of debt, but they cannot guarantee that you can qualify for future credit.
Gaining freedom from credit card debt is worth the work and time it takes. Contact a professional credit counseling service and start building financial security.
(No Ratings Yet) Loading ...Credit Card Debt Collection: Senator Cites Need for Increased Consumer Protection
A report issued by the Government Accountability Office (GAO) suggests that unfair debt collection techniques are commonplace. Senator Carl Levin, D-Michigan supports creating a new federal agency that protects consumer rights and enforces consumer entitlement to ethical collection practices. Although the Fair Debt Collection Practices Act (FDCP) was passed in 1977, Senator Levin suggests updating it to reflect new technologies and increasingly aggressive debt collection practices. It takes time to pass legislation, so consumers must protect themselves in the meantime.
Unsecured Debt Consolidation Options Scarce
Qualifying for an unsecured debt consolidation loan for enough to cover all of your bills can be difficult. Short of asking for loans from relatives and friends, what can you do? Consulting a credit counseling service can provide affordable options for repaying credit card debt. Credit counseling services don’t provide debt consolidation loans, but they do work with consumers and their creditors toward developing affordable debt repayment agreements. The benefits of repaying credit card debt through a consumer credit counseling agency include:
- Your credit counselor can help you develop a realistic cash based budget.
- Credit counselors can negotiate reduction and waivers of recurring fees that add to your debt each month.
- Your credit counselor may be able to negotiate lower interest rates. This helps you pay off your debt faster while keeping your debt from rapidly increasing as unpaid interest is applied to your credit card balances.
- Once you agree to a repayment plan through credit counseling, your credit counselor draws up a written agreement that’s approved by your creditors. Your repayment agreement also acts as a form of credit card debt consolidation, as you make scheduled payments to your credit counseling agency for all of your debts; your credit counseling agency deducts its fee and distributes the balance of your scheduled payments to your creditors. Making one payment instead of several can help you avoid late or missed payments.
- Once you’ve signed a repayment agreement, your credit counseling agency acts as an intermediary between you and your creditors. You can refer collection calls to your credit counselor according to the instructions and terms of your repayment plan.
Making one payment a month (or otherwise if required by your debt repayment plan) is easier than juggling several bills and avoiding phone calls at all hours. You are asked to destroy your credit cards and close your accounts. This may seem unreasonable, but it does ensure that you won’t incur more debt while trying to pay off the debt you already have. Don’t focus on losing your credit cards, but instead look forward to the financial freedom you can enjoy when you’ve repaid all of your credit card debt.
(No Ratings Yet) Loading ...Getting Student Loans Without a Co-Signer
You may be intimidated by the thought of paying for a college education at today’s prices, especially if you’ve had a lot of debt in the past and are leery of running up more bills. If you’re like many people, you probably have considered applying for student loans with or without a co-signer. Here’s what you need to know about getting a loan on your own. Read the rest of this entry »
(No Ratings Yet) Loading ...Should I Use a 401(k) Loan to Pay Off Credit Card Debt?
If you are carrying a lot of credit card debt it may be tempting to borrow money from your 401(k) plan to pay it off. But taking money out of a 401(k) can take a bite of your retirement nest egg over time. Here is what you need to know about borrowing money from a 401(k) plan.
Using a 401(k) to Help with Debt
Many Americans who need help with debt have turned to 401(k) money. Many 401(k) plans allow you to borrow up to 50% of the vested balance, with the total withdrawal capped at $50,000, according to SmartMoney. In some cases the money can only be used for a home purchase, medical costs, or education expenses. Read the rest of this entry »
(No Ratings Yet) Loading ...Understanding the Connection between Debt Consolidation and Consumer Credit Counseling
You’re up to your ears in credit card debt and want a debt consolidation loan to lower your payments and streamline debt management. Unfortunately, it can be difficult to find a debt consolidation loan unless you’re willing or able to put up your home or car for collateral. Paying off debt with an affordable repayment plan through consumer credit counseling can be a welcome alternative to pricey unsecured debt consolidation loans.
Consumer Credit Counseling: How it Works
Non-profit consumer credit counseling services offer a package of services for a fee. In some cases, their fees are based on your ability to pay as determined by a review of your income and debts. Paying a fee to get out of debt often makes more sense for debt ridden consumers than paying more interest on a debt consolidation loan. Here’s a general picture of how credit counseling services work; policies and procedures vary.
- Initial interview: When calling for an appointment, you may be asked several questions about your situation, but legitimate credit counselors never ask for credit card information over the phone. They provide instructions about the financial documentation you need to bring to your appointment. Prepare this information well before your appointment in case you find that some of what you need is missing.
- Your debt consolidation and repayment plan: Your credit counselor reviews your income, assets, and unsecured debt obligations. This information is used to determine your eligibility for a debt repayment plan. These plans are set up according to your ability to pay and requirements of your creditors. Your credit counseling agency acts as an intermediary between you and your creditors. Your counselor attempts to negotiate lower finance charges and fee waivers, but usually cannot lower the balances you owe.
- Signing your debt away and cutting up your plastic: Once your credit counselor has determined the terms of your repayment plan, you review it and are asked to sign an agreement. As part of the agreement, you destroy your credit cards and close your accounts. This is a difficult step for many, but it ensures that you won’t sabotage your repayment plan by incurring more debt.
- Debt consolidation: You make scheduled payments to your credit counseling agency and they distribute funds to your creditors according to your agreement. You gain the dual benefit of debt consolidation and lower, less costly repayment terms. Congratulations!
Consumer credit counseling can be a beneficial alternative to unsecured debt consolidation loans. Contact a credit counseling service to learn more.
(No Ratings Yet) Loading ...Will I Owe Taxes If My Mortgage Debt Is Forgiven?
Many Americans have turned to debt settlement to get their bills under control. But before attempting to settle your credit card debt and other loans, make sure you understand how your taxes will be affected.
Debt Reduction and Foreclosure
In many cases if you have a debt canceled or forgiven, you may owe taxes on the canceled amount. But if you have mortgage debt discharged on your principal residence, you should be able to exclude the amount from your taxes thanks to the Mortgage Forgiveness Debt Relief Act of 2007. Read the rest of this entry »
(No Ratings Yet) Loading ...Filing Bankruptcy: Seven Considerations
If you’re considering filing bankruptcy, there are some things to consider before doing so. Planning ahead can help in avoiding “surprises.” Bankruptcy provides a legal way to gain shelter from insurmountable debt, but it does not protect you from paying debts secured by real property or merchandise, such as your home or car. Here’s more information about how bankruptcy works and what you should know before filing.
- Which bankruptcy option best suits your situation? There are two types of personal bankruptcy, Chapter 7 and Chapter 13. Chapter 7 “wipes out” most unsecured debt and is typically filed by those who are unemployed or otherwise have no hope of repaying their debts. Chapter 13 bankruptcy allows those with steady income to restructure their debt and repay it within three to five years. This option can work for those who have returned to work after a long period of unemployment, or who have experienced a reduction of income. Consulting a bankruptcy attorney before filing can help in determining which option matches your needs.
- Bankruptcy stays on your credit reports for 10 years: Although filing bankruptcy provides legal protection from creditors, and may eliminate or reduce debt, it stays on your credit record for ten years, and can severely lower your credit scores. Credit counseling can offer debt consolidation and affordable repayment plans as affordable alternatives to bankruptcy.
- Don’t try to shelter your assets: You may be tempted to transfer assets to relatives or friends before filing bankruptcy, or repay friends and family in advance of repaying creditors. Don’t go there! The bankruptcy trustee can sue to recover assets transferred this way. You may also be subject to prosecution for fraudulent transfer of assets.
- Certain assets are exempt from bankruptcy protection: You can’t file bankruptcy to avoid paying taxes, alimony, or child support. Most student loans are exempt from bankruptcy protection. Secured credit accounts including mortgages and auto loans are also not extinguished by filing bankruptcy, although payments can be temporarily delayed.
- Continue paying on secured accounts: If you want to keep your home and car, it’s best to continue making payments during bankruptcy. This prevents additional negative credit reporting and can help you avoid paying late charges.
- Bankruptcy attorneys require payment in advance: Any money you have after filing bankruptcy becomes part of your bankruptcy assets; attorneys expect payment up front. Filing bankruptcy can cost a few hundred to thousands of dollars depending on the complexity of your case and customary fees and costs in your area.
- Bankruptcy won’t solve underlying issues: If you got into trouble with credit card debt due to overspending or other financial mismanagement, it’s important to get help so you can avoid future financial problems.
Filing bankruptcy is a major financial decision that can impact your life for years. Consider seeking credit counseling to learn more about bankruptcy and options that can help you avoid bankruptcy.
(1 votes, average: 4 out of 5) Loading ...- This blog covers a wide variety of debt consolidation and loan topics.
We rely on a large network of financial experts and leading authors to write the content for the DebtHelp.com Blog.
Colorado Study Looks at Debt Consolidation Services
House Votes to Move Up Effective Dates of Credit Card Reform Law
- November 2, 2009–November 8, 2009
- October 26, 2009–November 1, 2009
- October 19, 2009–October 25, 2009
- October 12, 2009–October 18, 2009
- October 5, 2009–October 11, 2009
- September 28, 2009–October 4, 2009
- September 21, 2009–September 27, 2009
- September 14, 2009–September 20, 2009
- September 7, 2009–September 13, 2009
- August 31, 2009–September 6, 2009
- August 24, 2009–August 30, 2009
- August 17, 2009–August 23, 2009
- August 10, 2009–August 16, 2009
- August 3, 2009–August 9, 2009
- July 27, 2009–August 2, 2009
- July 20, 2009–July 26, 2009
- July 13, 2009–July 19, 2009
- July 6, 2009–July 12, 2009
- June 29, 2009–July 5, 2009
- June 22, 2009–June 28, 2009
- June 15, 2009–June 21, 2009
- June 8, 2009–June 14, 2009
- June 1, 2009–June 7, 2009
- May 25, 2009–May 31, 2009
- May 18, 2009–May 24, 2009
- May 11, 2009–May 17, 2009
- May 4, 2009–May 10, 2009
- April 27, 2009–May 3, 2009
- April 20, 2009–April 26, 2009
- April 13, 2009–April 19, 2009
- April 6, 2009–April 12, 2009
- March 30, 2009–April 5, 2009
- March 23, 2009–March 29, 2009
- March 16, 2009–March 22, 2009
- March 9, 2009–March 15, 2009
- March 2, 2009–March 9, 2009
- February 23, 2009–March 1, 2009
- February 16, 2009–February 22, 2009
- February 9, 2009–February 15, 2009
- February 2, 2009–February 8, 2009
- January 26, 2009–February 1, 2009
- January 19, 2009–January 25, 2009
- January 12, 2009–January 18, 2009
- January 5, 2009–January 11, 2009
- December 29, 2008–January 4, 2009
- December 29, 2008–January 4, 2009
- December 22, 2008–December 28, 2008
- December 15, 2008–December 21, 2008
- December 8, 2008–December 14, 2008
- December 1, 2008–December 7, 2008
- November 24, 2008–November 30, 2008
- November 17, 2008–November 23, 2008
- November 10, 2008–November 16, 2008
- November 3, 2008–November 9, 2008
- October 27, 2008–November 2, 2008
- October 20, 2008–October 26, 2008
- October 13, 2008–October 19, 2008
- October 6, 2008–October 12, 2008
- September 29, 2008–October 5, 2008
- September 22, 2008–September 28, 2008
- September 15, 2008–September 21, 2008
- September 8, 2008–September 14, 2008
- September 1, 2008–September 7, 2008
- August 25, 2008–August 31, 2008
- August 18, 2008–August 24, 2008
- August 11, 2008–August 17, 2008
- July 28, 2008–August 3, 2008
- July 21, 2008–July 27, 2008
- June 16, 2008–June 22, 2008
- June 2, 2008–June 8, 2008
- March 17, 2008–March 23, 2008
- November 12, 2007–November 18, 2007
- November 5, 2007–November 11, 2007
- October 29, 2007–November 4, 2007
- October 15, 2007–October 21, 2007
- September 17, 2007–September 23, 2007
Chris Rocks is the Regional Director of the National Credit Federation (NCF). NCF is a nationwide membership-based organization that assists consumers recovering from a financial difficulty and those who need a significant increase in their credit score.
Chris began his financial services career as a Financial Advisor helping young families with risk management and asset accumulation strategies. It was during that time that Chris realized that many of these young families also needed someone to guide their choices with regards to debt management.
He made the transition into the mortgage industry where he first worked as a loan originator and later the Vice President of a small mortgage company. As Chris came across clients who had suffered through financial challenges and saw the difficulty they had in re-entering our credit driven economy, he discovered there was a real opportunity to leverage his unique background and help others.
He can be contacted by visiting his personal site, GoodCreditLiving.com.
Francine L. Huff is the Publisher and Editorial Director of Super Savvy Publishing, LLC, which provides editorial and publishing services. She is a gifted author, freelance journalist, and motivational speaker who has entertained and motivated a variety of audiences through workshops, panels and keynote addresses. Francine is the author of The 25-Day Money Makeover for Women, which has inspired and motivated many readers to rein in poor financial habits, become good stewards over their money and work toward a debt-free life. She has appeared on a variety of TV and radio shows. Francine previously worked for the Wall Street Journal, where she was the spot news bureau chief, a news editor and a copy editor. She has interviewed a variety of financial professionals about financial issues and strives to present information about managing money in an easy-to-understand format that is accessible to people of all backgrounds and income levels.
Karen Lawson is a freelance writer with more than 15 years of experience working in mortgage banking and loan servicing. She holds BA and MA degrees in English from the University of Nevada, Reno.
- Auto Loans (1)
- Consumer Credit Counseling (7)
- Credit Cards (2)
- Debt Advice (3)
- Debt Consolidation Options (5)
- Debt Consolidation Scams (1)
- Debt Management Options (2)
- Debt Settlement (8)
- DebtHelp.com (94)
- Economy & News (6)
- Helping Consumers (4)
- Managing Debt (1)
- Mortgage Fraud (1)
- Saving money in today's economy (15)
- Your Credit (2)
- You will recieve a reminder when we post a new article to the DebtHelp Blog.
Loading ...