what is debt consolidation


Published on

Providing sound debt advice for all those experiencing tight money flow this time of year

Published in: Business, Economy & Finance
  • Be the first to comment

  • Be the first to like this

No Downloads
Total views
On SlideShare
From Embeds
Number of Embeds
Embeds 0
No embeds

No notes for slide

what is debt consolidation

  1. 1. ==== ====Hello, if you would like more help with your debt please visit the link belowwww.debtsettlementorder.com==== ====As economic difficulties around the country continue to worsen, tens of thousands of Floridaconsumers have reported problems with credit card accounts and bills they cannot easily pay.Unfortunately, many of these same borrowers have been led to believe that bankruptcy is theironly solution to seemingly intractable debt loads, and, particularly for those Florida heads ofhouseholds who have staved off external help as long as possible hoping that they could repaytheir debts through ordinary means, the new alternatives toward bankruptcy such as debtsettlement remain unknown to the people that could best take advantage of these programs. Muchas Chapter 7 debt elimination bankruptcy does still maintain some advantage for a certain sort ofconsumer - consumers with minimal earnings and no assets (including household furnishings) tospeak of, more exactly - a host of options currently awaits the borrower wholl spend thenecessary hours researching these new strategies. Make no mistake, all Florida residents with thecapacity to repay their obligations without unduly taxing their household budget should attempt tosatisfy their various accounts by traditional measures. However, with the economy of Florida andthe nation as a whole so tenuous at this very moment, it behooves the considerate borrower tolook at every strategy and pay special attention to the debt settlement solution.Thanks to their onslaught of television and newspaper advertisements around Florida, ConsumerCredit Counseling remains the most well known of all of the debt relief alternatives, and, indeed,the program does boast lower interest rates and substantially lower payments for those Floridianswhove signed on for their services. Still, much as the Consumer Credit Counseling programs mayalleviate many of the tensions that follow from lender harassments (and their accompanyingcollection agencies), reduced payments and simplified statements still do not equal debtliquidation. The Consumer Credit Counseling companies solution only helps aid their Floridianclients suffer through their bills in the short term while the actual debt is just put aside for a laterdate. There will be no hope of the balance liquidation offered through Chapter 7 bankruptcyprotection, and, for that matter, entrance to the Consumer Credit Counseling program alsothreatens other alternatives such as debt settlement since the borrower essentially admits thatthey could attempt to satisfy the balances on their own. Given the dramatic shifts of costs of livingthat exist around differing parts of Florida, Consumer Credit Counseling should be very cautiouslyapproached. It may still be a more beneficial alternative when compared to Chapter 7 or Chapter13 bankruptcy, depending upon the individual Florida households specific desires and capacities,but theres yet every reason to look at the other possibilities now at hand.Debt settlement, while a somewhat innovative method of satisfying unsecured loans that Floridaborrowers would otherwise be unable to repay, has been around for a number of years. Throughnegotiation with the lenders, experienced and certified debt settlement counselors attempt -successfully, almost always, for those borrowers that the settlement companies agree to work with- to argue for a significant reduction of existing balances. The process is both legal and justifiable.Indeed, since debt settlement essentially requires the repayment of some part of the loans, Florida
  2. 2. borrowers should consider debt settlement more ethical than the Chapter 7 debt eliminationprogram. In the best of all possible worlds, consumers would simply be able to reduce householdexpenses or raise their gross income so as to pay back their lenders month by month. Alas, inthese lean times (with every Florida employment market from Jacksonville to Miami dropping jobsby the bucket load), even the most conscientious borrower may need some professionalassistance, and there are certainly smoother roads toward unsecured debt liquidation thanbankruptcy. Once again, much as debt settlement may not seem as familiar to ordinary Floridaconsumers, its most certainly worth any debtors time to investigate the option.Within debt settlement (as with Consumer Credit Counseling or Chapter 13 bankruptcy protection),there will be a schedule of repayment that asks each Florida borrower involved with the programto send their money directly to the settlement company on time each month. When first talking tothe counselors, this is one of the important initial questions that Florida consumers must ask: howlong will the debt settlement process take? In general terms, the professional will guarantee aschedule of no longer than five years for the settlement process in order to prime the credit cardrepresentatives for balance reductions. However, should the borrowers not demonstrate enoughhousehold income (also taking into account their other debts untouched by settlement pluswhatever costs of living expenses in their area of Florida) to be able to satisfy the remainingamounts within sixty months, the debt settlement company may not be able to take them on asclients. Remember, payments must be low enough that the borrowers - with some degree ofdeprivation to be expected; remember, the point of debt settlement is to erase all credit card billsand similar obligations - could still maintain their household while attempting to estimate the familybudget for Florida in the seasons to come. If the debt settlement company does not truly believethat the borrowers would not be able to fulfill their monthly stipend through the settlement process,they will have no choice but to deny the borrowers entreaties. This is yet another differencebetween debt settlement and Consumer Credit Counseling: CCC companies never refuse a clientand have no problem whatsoever letting those clients continue along with low monthly payments(and ever accruing interest) for years and years to come.In Florida, there is far less potential for damage to recalcitrant consumers compared to theirbrethren around the country. Floridas debtor laws guarantee residents a number of libertiessurrounding over due accounts which most Americans suffering through such tribulations woulddearly wish to enjoy. Much as every state has their own laws preventing creditors and collectionagents from unfair harassment of borrowers, Florida specifically forbids lenders from anycommuniqués with their clients once a Florida resident signs a "cease and desist" noticeand mails the notice to the appropriate parties. Even beyond the automatic stay granted thoseconsumers filing for bankruptcy or the leverage that an attorney may grant, merely providingformal notification of the desire to avoid correspondence or communication with the creditors willmean that Floridians are legally protected. Furthermore, the state of Florida has enacted statuteswhich - for the most part - utterly vouchsafe the home and the wages of borrowers who cannototherwise repay their creditors. Much as these laws serve as an aid to Florida consumersattempting to satisfy their loans one payment at a time, the statutes also aid the debt settlementprocess since the lenders have more to lose should they continue to force the issue. Theresalways a chance of legal action, still, no matter the legislative safeguards, since creditors arereserved the option for law suits to recover their funds, but Floridian consumers have far moreopportunities for debt settlement negotiation from positions of strength.Every debt settlement company shall demand some money for their services, but the overall fees
  3. 3. could differ greatly from program to program. Annual administrative fees are fairly common place,there are bills to be filed, but a few of the less reputable companies add on monthly expenses.None of these extraneous charges should be particularly large or notable, but they accumulateover time and are signals of other potential concerns. Florida borrowers should keep in mind thatthey will want to investigate each debt settlement business thoroughly before signing along withtheir program. Any sincere exploration of debt relief programs, whether Consumer CreditCounseling or debt settlement or another approach, depends upon both the reputation of thecompanies and the level of trust that the consumer may or may not develop with the counselorthey will be working with. Contact the local chapter of the Better Business Bureau and the Floridastate attorney generals office to see if there are any complaints from past customers. Check online to try and suss out the companys reputation. In truth, since the debt settlement industryremains a fairly recent endeavor, many Florida consumers have utilized the internet and foundremote debt settlement firms that did just as good of a job (often, at reduced costs) as the storefronts larger cities may offer.There are, of course, expenses to be paid. Florida consumers shall find disadvantages with anysuch program that intends to carve away financial obligations already spent. Borrowers acceptedinto the debt settlement system will find harmful consequences as to credit ratings and FICOscores though they will be much less dramatic than what would be felt from bankruptcy protection.Furthermore, lenders could always call the debt settlement counselors bluff and initiate legalactions for seizure of property or wage garnishment, and, without the automatic stay guaranteedby bankruptcy protection, representatives of the creditors - or, worse, the collection agenciestheyve hired - may continue to harass and threaten borrowers for payment. The debt settlementsolution does not guarantee success. Furthermore, the debt settlement program will not do awaywith Florida borrowers past credit problems. Anything that the three credit bureaus (Equifax,TRW, and TransUnion) have recorded upon the borrowers histories shant be easily removedunless the information could be proven false. A few years ago, the United States congress passedthe Fair Credit Reporting Act which was intended to ensure that all data documented on the creditreports would be demonstrably accurate and that lenders which could not back up the black marksthey had presented to the credit bureaus must withdraw their notations. Unlike Chapter 7 orChapter 13 bankruptcy protection, which can stay upon a credit report for as long as a decade,negative payment records only last for seven years, and, while debt settlement does not score thesame as a defaulted loan, theres still repercussions from debt settlement as to FICO scores.This is an important distinction. While the debt settlement company shall dole out funds to thecreditors, the primary responsibility - the entire responsibility, in the eyes of the law - for the actualdebts falls to their clients. In many ways, this should be considered an asset for Floridianconsumers, and this is one of the reasons that debt settlement solutions are better received interms of credit ratings and FICO scores. Since Florida debtors retain liability for their credit carddebts and other unsecured obligations covered under the debt settlement negotiation process(unlike the Chapter 13 discharge or effective default that Consumer Credit Counseling engenders),they gain positive points within the vaguely understood Fair-Isaacs scoring system which all of thethree credit bureaus employ for every payment made on time. However, while that aspect of thedebt settlement program should certainly be seen as positive, Florida residents must rememberthat - since the responsibility for the obligations remains their own - they need check up on thesettlement company to make sure the bills paid arrive promptly. Even the most respected of debtsettlement firms shall occasionally make a mistake, whether from computer malfunction or lenderschedule alterations notated too late, and its up to the individual Floridian to talk to the credit card
  4. 4. representatives and discover whether or not the payments are being made. For that matter,though this should seem common sense, Florida borrowers would also be wise to ensure that thereductions of interest rates and balances promised from the debt settlement company are seen onthe actual statements.The effectiveness of debt settlement negotiation depends upon a shared realization between thelenders and the debt settlement professionals about the looming possibility of bankruptcyprotection. After credit card accounts or similar unsecured loans have turned delinquent, lendershave a set variety of what they could reasonably do in order to recover their funds. Fees accrue, ofcourse, interest rates escalate (sometime exponentially), and negligible minimum monthlypayments become unfathomable burdens. Remember, despite their many threats, the lenderswould much prefer that the borrowers would simply repay whats owed rather than having to gothrough the trouble and expense of fighting a case in the Florida courts. Delinquencies, thoughthere are tax breaks involved, help no one: the lenders wont get paid and the borrowers creditratings are effectively destroyed. If at all possible, the credit card companies will want to try andwork out a payment schedule that their clients can afford, and, if it seems that Chapter 7 debtelimination bankruptcy would be attempted, the creditors will jump at the chance to negotiate adebt settlement alternative even if they have to give up more than a third of the funds owed. Afterall, even if they end up asking for only forty or fifty percent of the original balances, the guarantee -or, at least, the word of a respected debt settlement company - of some money is better thannothing.Its important for consumers to maintain cordial relationships with their lenders, but Floridaresidents should also remember that representatives of the credit card companies have a vestedinterest in keeping their clients paying interest rates for as long as they could. The credit cardconglomerates will have their own form of consolidation programs with lower interest, perhapseven offering minimal cuts to balances, but they will virtually never be the best alternative availablefor unsecured debt elimination. No matter how friendly the lender reps may seem, theyre hardlylikely to discuss other sources of relief: debt settlement, especially. For ordinary Floridaconsumers, the debt balances themselves should be considered beyond negotiation. Credit cardcompanies will not soon bend down to the demands of Florida consumers without professionalrepresentation. Unless the lenders are convinced that their competitors are ceding precisely thesame percentage of funds owed, they have no reason to do more than shrug away past over limitfees and vaguely lower their interest rates. Much as debt settlement negotiation may seem likemore of an idea than a craft, creditors need to know both that a reputable company honors theirclients promise of repayment and that all lenders shall be treated equally. To this point, it mayeven be necessary for Florida consumers to intentionally skip payments so that their debtsettlement counselor could have proper leverage for the eventual negotiations. This shall hurt anyFlorida borrowers credit scores in the short term, true, but - should the debt settlement companyshave off nearly half of their clients debt load through a series of phone calls - the savings shouldbe certainly worth the temporary reduction of credit scores.Of all the financial strategies borne upon the diminishing impact of bankruptcy protection in themodern world, debt settlement seems to have met the most success for aggrieved Floridaconsumers struggling with credit card burdens. Still and all, there are warning signs to be avoided.Every debt settlement company shall demand some money for their services, but the overall feesdiffer greatly from program to program. Annual administrative fees are fairly common place, thereare always bills to be filed, but a few of the less reputable companies add on monthly expenses.
  5. 5. None of these extraneous charges should be particularly large or notable, but they accumulateover time and are signals of other potential concerns. Theres so much to be analyzed before anydecision should be made by a Florida household attempting to juggle their debt obligations againstprospective earnings. For home owners absolutely convinced that they will soon receive sufficientmoney to cover their accumulated bills, equity loans - despite the plunging Florida real estatemarkets - may genuinely be a worthwhile solution. Certainly, for borrowers that have weatheredgenuine calamities and have no assets worth protecting, Chapter 7 bankruptcy remains a muchneeded port against the creditor storm. Given the space constraints of an article such as this,theres just no way for your authors to pretend that they could honestly advise any Floridaborrower of the most beneficial debt liquidation maneuvers without taking a close look at theirfinancial standings.At the same point, while so many Florida residents fight against their mounting bills, relief fromcredit card bills has become a necessity for any consumer who does not believe he or she couldeasily eliminate their amassed unsecured burdens within a reasonable amount of time.Considering the state of the economy (and the nature of compound interest), theres no reasonFloridian borrowers should presume that their debts shall grow more manageable without adecisive strategy and the assistance of professionals trained in the practice of financial solutions.As should be clear from the paragraphs written above, we believe debt settlement - for thoseFlorida consumers who can show enough demonstrable income and the right sort of debt (somecredit card companies yet resist the program) - to be the gold standard of all of these programs,but it will be left to the individual borrower to discover for themselves what shall work best for theirown household. No debt scenario is alike. Some Florida borrowers found themselves in thispredicament through thoughtless spending beyond their means while others, struck by medicalemergencies or familiar distress, simply had no other choice. As we have written, theres as manydifferent debt solutions available to Florida residents as there are debt portfolios, and, much as westrenuously recommend the debt settlement option, every consumer must inevitably speak to aprofessional debt analyst themselves.For more information on this topic or if you are in immediate need of debt relief or debt settlement,please visit TotalDebtRelief.net.Article Source:http://EzineArticles.com/?expert=Cole_Collins==== ====
  6. 6. Hello, if you would like more help with your debt please visit the link belowwww.debtsettlementorder.com==== ====