Skip to main content

Debt Consolidation and Settlements is not for the Weak at Heart.


When you consider debt settlement consolidation,it means you are in deep and getting desperate. These predator companies realize this and are more than willing to tell you all of the benefits and will not tell you the disadvantages until you sign a contract with them. These types of companies call themselves many names including: Debt Counselors, Debt Consolidation, Christian Financial Services, And Not for Profit groups. Be not fooled by the terms "Christian" or "Non Profit" as these are just ploys to get you to trust them.


Facts about the Debt Settlement process in a nutshell

* You pay up front for services before they will take your case either flat rate or a percentage of your total debt. P.S, Cash only no Credit cards.

* You then need to be in default on your payments, if you are not, then your "Counselor" will tell you to stop paying. Keep in mind once you stop paying late fees will accumulate,and interest rates will soar, plus your official debt will quickly double or triple. With this in mind here is something your "Counselor" will not tell you. You will have to pay taxes on any debt relief. To get the full depth of this, let me do scenario math. Your Original debt $30,000 + $ 20,000 (low ball figure of late fees and interest charges). The credit card company settles at $10,000. The only problem is you have is you owe gift taxes to the IRS on $40,000 which is roughly 30% that would be approx. $12,000 in taxes.

* Debtors will call, they will call at work,they will call your mother, they will call your neighbor, yep it is illegal, but I assure you, they call and verbally harass you. While you are not paying your bills, your debt gets sold many times, each debtor a little less scrupulous than the last.

* Your credit will be trashed.

For anyone considering Debt Settlement, I would highly recommend seeing a bankruptcy attorney instead. Most attorneys offer a free consultation,you will not have to pay relief taxes as with a consolidation,and attorney fees are cheaper.

--
http://www.ladystrange.com
http://www.ladystrange.net
http://www.blog-earnings.com
http://www.credit-card-money.com

Labels:

Comments

~The Real Deal~ said…
I like the page design, but more importantly this is a great eye opener or warning for people who aren't aware of these subjects.
August 14, 2009 at 3:19 AM
Kim oPatrick said…
Same kind of solutions cant be applied for all debtors' problems. They have to work out with debt professionals and find out which plan suits them. :)
August 16, 2009 at 11:07 PM
Investors times said…
Debt consoldation is quite good especially if you have some high interest debt. It will reduce the interest rate and make it easier for you to pay the debt.
August 26, 2009 at 4:12 AM
BeyondBankrupt said…
Never take for granted your debts and try to prioritize them first. Create a debt management plan with your creditors so that you can fairly settle your obligation.

___________________
Avoiding, Understanding and Surviving Bankruptcy
August 27, 2009 at 7:43 PM
Kim oPatrick said…
One can go for free credit counseling with professionals, before situation going out of hand. :)
August 28, 2009 at 11:41 PM
Post a Comment

Popular posts from this blog

Type Of Home Equity Loans For Debt Consolidation

How can home equity loans help out to consolidate your debts? In this article I just focus on how equity loan works for fight with debts in both long term and short term. Let me defined what exactly home equity loan are most if the people didn’t understand the function of this loan, it is one kind of loan which acts like second mortgage where you can lend some money as per your home value without gaining high risk. In home equity loans there are some category like: 1) A Closed-End Equity Loan: Closed equity loan is known as equity line of credit where a borrower received a complete payment consisting of a single sum of money it is signified to as a closed end home equity loan. These loans are advised orthodox second mortgages. Where the tenure will be written 15 years and a fixed rate of interest you have to until the whole loam amount is not paid. 2) Home Equity Line of Credit: Home Equity line of credit (often called HELOC and pronounced HEE-lock) people generally go for this kind
2 comments
Read more

How Chapter 13 Bankruptcy Lowers Credit Card Debt

Uncontrollable credit card debt has led many American citizens to look for a way out that really works. While some individuals resort to debt settlement programs, others favor the complete judicial protection that is offered by Chapter 13 Bankruptcy. Chapter 13 Bankruptcy assists US consumers to lower their monthly payments on credit card debt. You can become debt free simply within 3-5 years with complete judicial protection. Individuals who have non-exempt assets like rental properties frequently opt for reconstituting their credit liabilities throughout a 3 to 5 year period for the purpose of lowering the monthly payments. At the same time when there would be a negative impact on their FICO scores for up to seven years, those who are facing severe financial difficulties can become debt free. The Distinction Between Chapter 7 and Chapter 13 Bankruptcy The main distinction between Chapter 7 and Chapter 13 bankruptcy is that the second permits a consumer to hold non-exempt assets. A co
16 comments
Read more

How credit scores can change your lives?

Credit score is a 3 digit number that indicates your ability to repay a loan. It is calculated statistically and is based on your credit history. It reflects your creditworthiness or your past and future ability to repay debts. When your credit score is calculated, your income, liabilities and expenses to repay the loan are taken into account. Why is a credit score important to you? Your credit score helps lenders to objectively measure your overall credit risk. Your credit score is specific and gives your creditors a fair knowledge of your credit situation. Scores can be viewed by your lenders easily and this allows your lenders to speed up the loan approvals. With your credit score, your lender can approve your loan much faster. Scoring enables the lender to take faster credit decisions. Where can you find your credit score? Credit scores appear in your credit report, which is a file that contains all your borrowing details. Your credit report is generated by a consumer reporting com
1 comment
Read more