Debt Consolidation

Reducing Credit Card Debt

In part 1 we looked at what needs to be included in a hardship letter, now let’s cover what comes after you’ve gotten your letter written. Send the letter, along with a request to settle for $x amount (where again, x is a dollar amount, 35-50% of the current balance).

You can also talk about your hardships while on the phone with the collectors and requesting a settlement offer. Try to focus on financial hardships over personal issues. Be sincere when you tell them about this stuff. You might just find that acing embarrassed by the situation will go further than being a “woe is me” victim with no personal responsibility. But remember we ALWAYS want an offer IN WRITING.

That also means you want to start a small journal where you record the name of the person you speak with, who they are representing, direct number/extension, time and date. You want to keep this accessible at all times in case they call and you have to speak with them.

3. When you do send them a check, use certified mail that includes a receipt.

After they send you a settlement offer that is acceptable to you, send them a check. IMPORTANT: make sure that you write your account number on the check and write “For Payment In Full” in the memo area. Send the check and a COPY of the settlement offer via certified mail. And don’t forget a return receipt!

After the account has been paid and has a zero balance, you can do some steps to repair your credit and possibly have the settled debt removed through disputing it.

The negotiation process can be tricky and often times, a company’s willingness to cut you a good deal will be dependent on the economic climate. There are many helpful resources available with insider knowledge written specifically by arbitrators and lawyers such as .

The Top Debt Consolidation Companies

There are a number of large debt consolidation firms operating in the United States. Some specifically cater to people in certain locales while others operate on a nationwide basis-and even have subsidiaries that work overseas.

AmeriDebt is one of these large companies. AmeriDebt is located in Maryland, New York, and Alabama. Of the three companies, only one person–according to the BBB–has reported a complaint. Few people claim that AmeriDebt isn’t an honorable debt-counseling corporation. It has never landed in court with judgments against it.

Another one of the leading consumer debt management services is the Federal Credit Unions, which operates in a number of different states. The Unions will help consumers decide their needs for debt reduction and is a “Non-Profit United Way” credit agency that assists both families and individuals alike. United Way, according to many, is one of the most qualified expert organizations for helping families avoid bankruptcy, judgments, summons, and so forth. The company will help the families avoid foreclosures and repossessions by working closely with the creditors to combine all accumulated debts into one monthly installment.

The CCCS will also help families and individuals learn how to manage their income. The CCCS houses “Financial Counseling Certified” counselors who work closely with families and individuals, helping them to divert a plan to lower their debts and increase their cash flow. In other words, instead of going through the changes that some debt consolidation companies go through, the CCCS works to help families and individuals to get out of debt on their own simply by counseling them. The credit company is associated with “Housing and Urban Development (HUD),” which works to get families homes and to then get them credit support.

Finally, a few organizations are also affiliated with religious organizations, and often these debt consolidation companies are affiliated with qualified companies that help families and individuals relieve debt.

If you are looking to consolidate debts, you have a number of high-quality, professional options, so shop around and find the deal that is best for your specific needs.

The Benefits of Unsecured Loans for Debt Consolidation

Unsecured loans for debt consolidation are loans that do not require collateral. Debt consolidation loans are claimed to help debtors avoid bankruptcy, eliminate debts, terminate hassling creditors calls, lower debt payments, and one low monthly installment. Of course, no one in their right mind wants to file bankruptcy.

Lawyers are notorious for telling people that there is no other way but to file for bankruptcy. Likewise, any source that tells you that they can eliminate debt is leading you on. Reality is structured to keep everyone in debt. No one has the ability to get out of debt unless they die. However, there are solutions for minimizing debts so that you can remain stable.

The unsecured loans for debt consolidation are nothing more than subtracting a series of debts and adding new debts. Sure, you may pay less, but in the long run, you still owe something to someone.

To give you an idea of unsecured loans for debt consolidation, I am going to breakdown the balance of a hypothetical loan scenario.

Let’s say that you owe a number of creditors $10,000: you can go to a debt consolidation organization that offers you the loan amount. Now, you have depleted your debts from the other lenders, but you incurred a debt from another lender. Let’s say there are fees (which in most instances is true) and those fees equal $39 plus a 4.49% interest. On a $10,000 unsecured loan for debt consolidation, you would pay around $834 per month to repay the debt. If the company charges $39 plus interest and the capital on the loan, it would only equal around $759.30 per month when applied to the loan. This means that it would take you longer than one year to repay the debt.

Finally, there are solutions for paying off debts without getting in more debt; however, most of these solutions will require you to actually deal with your own creditors and will also require you to exercise an enormous amount of personal restraint in your financial decisions.