Bankruptcy And Debts

"Cut Your Payments in Half!" the headline screams. "Consolidate
Your Bills into One Low Monthly Payment!"

Consolidation Debt Mortgage When you see ads like this, they are often from Credit Counseling
firms. In this article, I'll explain the principles behind the
Credit Counseling approach and discuss the main problem consumers
face when they join one of these programs.

With the change in the new bankruptcy law effective October 2005, it is now necessary for consumers to get credit counseling within the six months before filing bankruptcy. The credit counseling service must be from a government approved credit and debt counseling organization. //www.usdoj. cc_approved.htm

Consolidation Debt Help First, let's get our definitions straight. The term "Credit
Counseling" is actually quite misleading, since it has nothing to
do with preserving or improving your credit score. In fact,
Credit Counseling will often damage your credit, an unpleasant
reality that is sometimes downplayed by industry representatives.

Our debt settlement program will get you debt free far sooner than credit counseling programs and not leave you with the devastating blemish of a bankruptcy on your record. Academy Credit is looking out for your best interest, not your creditors. We can get you out of debt with peace of mind. credit information cont

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Consolidation Credit Debt Credit Counseling is a debt management program where you make a
single monthly payment to an agency. In turn, that agency
distributes the money to your creditors on your behalf, ideally
at lower interest rates so you can pay off the debt faster.
Credit Counseling should not be confused with Debt Consolidation,
Debt Settlement, or Debt Termination. Each of these debt programs
takes a very different approach from Credit Counseling.

A person filing for Bankruptcy ust meet with a credit counselor in the six months prior toiling for bankruptcy. In addition, if your filing for Chapter 7 bankruptcy is approved, you mustþomplete money management classes before your debts are discharged. Both of these credit counseling requirements are at your expense.

Bill Consolidation Debt Of all the available debt options, Credit Counseling is by far
the most popular, with millions of Americans participating. Does
this mean it's the best choice for most people struggling with
debt? No! There are numerous problems with this approach.

An IVA, like bankruptcy, is a formal insolvency procedure and was introduced in the insolvency act of 1986. An IVA enables the debtor to pay off the whole of their debt or a part of it over a period of time. Rather than suffering the stigma of bankruptcy, the debtor works closely with their creditors to work out an affordable repayment plan.

Consolidation Debt Quote In recent years, the Credit Counseling industry has been heavily
criticized by impartial consumer groups like the Consumer
Federation of America. But these criticisms often miss the mark
entirely. They usually focus on the aggressive companies that use
their non-profit status to trick consumers into thinking they are
charitable organizations, or even that their services are free of
charge. In reality, these outfits charge hefty "voluntary"
contributions, often adding up to hundreds of dollars, plus steep
monthly fees as well.

Before paying someone for credit repair, consider getting your own credit report from all 3 national credit bureaus on how to improve your credit. Credit Counseling may be a reasonable alternative for those feeling financially stressed. Debt consolidaton and debt relief is an alternative to bankruptcy. ....

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Consolidation Debt Lead However, I'm not talking here about the bad companies who provide
little or no actual "counseling," or the ones that are only in
business to make their owners rich. No, I'm talking about serious
problems with the actual business model itself. So let's take a
closer look at how Credit Counseling works.

Consolidation Debt Non Profit Let's say you owe $25,000 on several different credit cards.
Let's also assume your average interest rate before you enrolled
was 20% (which is actually low these days, especially if you've
missed any payments). Your minimum monthly payments are $500,
which you've been struggling to keep up with. At this rate, it
will take a whopping 109 months (more than 9 years) to pay off
your debts, assuming you don't miss a single payment along the
way.

Consolidation Debt Loan Online You enroll in a Credit Counseling program that promises to get
you out of debt faster. But does it? Assuming your creditors
agree to participate in the program (not always the case), the
real key is the concession they will grant on your interest
rates. In prior years, creditors looked more favorably on Credit
Counseling and they offered steep discounts off the normal
interest rates. But lately they have squeezed the industry, and
the concessions are not so good any more. Currently, most of the
major players will reduce interest rates down to a range of 7% on
the low side to 18% on the high side. We'll use 12% as the
average.

Consolidation Debt Home Loan So if you keep your payments at $500 per month at the new 12%
rate, how long will it take? First, we need to deduct the monthly
fee charged by the agency. In this example, we'll use a fee of
$25 per month, so $475 of your $500 will go toward debt
reduction. The good news is you'll be out of debt faster. The bad
news is that it will still take 75 months (more than 6 years) to
become debt-free.

Christian Consolidation Debt But what happens if you can't keep up with that $500 per month?
After all, you sought help from a credit counselor because you
were struggling financially, right? Let's say you drop down to
$450 per month. After deducting the $25 monthly fee, that leaves
$425 toward your debt plan. Now you're looking at 90 months (7
years & 6 months), which is not much better than the 109 months
you started out with.

Consolidation Debt Information So how can credit counselors claim to cut your payments in half?
Good question. If you dropped down to $250 per month, you'll
never pay off your debt! At 12% interest, the debt will climb
faster than your $250 per month can reduce it. The lowest you
could go would be $300 per month. However, it would now take 20
years to pay off the debt, hardly an improvement!

Agency Consolidation Debt In order to truly cut your payments in half, down to $250 in this
example, the agency would need to completely eliminate all
interest! And even then, it would still take more than 9 years to
pay off the balance! So the ads claiming you can cut your
payments in half are simply false.

Consolidation Debt Solution Bear in mind here that in our example, we're assuming you're
working with a good company that charges low fees and actually
obtains good interest rate concessions from all of your
creditors. Even with the best of credit counselors, you're still
looking at a 5-9 year program to pay off your debts.

California Consolidation Debt That's why Credit Counseling is usually only effective for people
with short-term financial problems. Consumers with long-term
financial instability have trouble keeping up with the regular
payment stream required to make these programs work. The result?
Even the most favorable statistics show that about 3 out of 4
people drop out of Credit Counseling programs before completing
them.

Consolidation Debt Loan Uk If you do decide to join one of these programs in order to obtain
some short-term relief, be sure to do your homework first. Here
are a few tips to help in your selection:

Consolidation Debt Equity Home 1. Look for a company that actually provides old-fashioned budget
advice and counseling. If they want to sign you up right away
without first understanding your budget situation, move on!

Consolidation Debt Government 2. Obtain copies of the contract and read it carefully before
signing up. Make sure you understand all of the fees involved.
Are there enrollment fees? "Voluntary" contributions? Monthly
fees? Extra fees per account? These hidden fees can add up to big
bucks.

Consolidation Debt Firm 3. Make sure they work with all the creditors on your list and
not just some of them.

Consolidation Debt Financing 4. Don't be fooled by "non-profit" status. That doesn't guarantee
you're dealing with a good company. And it certainly doesn't mean
the service is free!

Consolidation Consumer Credit 5. Aim to find a local company that you can visit in person.
Check out your target company with the local Better Business
Bureau.

Consolidation Debt Free Quote 6. Make sure they provide support after the sale. Try calling
their customer service number to see if you can get through
promptly.

Card Consolidation Counseling Remember, you can eliminate your debts if you take a disciplined
approach to your finances, make a budget and stick to it, and
don't use your credit cards unless you can pay off new balances
in full each month.

Consolidation Debt Lender Good luck in your financial future!

Calculator Consolidation Debt Charles J. Phelan has been helping consumers become debt-free
without bankruptcy since 1997. A former senior executive with one
of the nation's largest debt settlement firms, he teaches
consumers a do-it-yourself method of debt negotiation &
settlement. Expert training via audio-CD plus personal coaching
helps debtors achieve professional results at a fraction of the
cost. http://www.zipdebt.com/article1

Best Consolidation Debt Loan

Consolidation Counseling Charles J. Phelan has been helping consumers become debt-free without bankruptcy since 1997. A former senior executive with one of the nation's largest debt settlement firms, he teaches consumers a do-it-yourself method of debt negotiation & settlement. Expert training via audio-CD plus personal coaching helps debtors achieve professional results at a fraction of the cost. To learn more, please visit http://www.zipdebt.com

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