The Best Way To Get Out of Debt - No Other Program Is Faster & Safer
If you're looking for a magic formula to get out of debt, it doesn't exist. Obama's credit card bailout is a myth - simply false advertising in order to get you to call. Think about it... if there really is a bailout program, don't you think it would be plastered all over the media?
If you have excessive credit card and other unsecured debt, searching for the program that gets you out of debt the fastest and safest method possible is your first step. Below are the details of your options:
Comparison of consumer debt solutions
| Questions | Debt Consolidation | Debt settlement | Debt Management | Self Repayment plan | Bankruptcy |
|---|---|---|---|---|---|
| Will creditor or collection calls stop? | Yes. They will communicate with your consolidation company. | Yes. All communication will be done via a settlement company. | Yes. Debt management company will communicate on your behalf. | Yes. But make sure you keep paying every month. | Yes. Creditors are barred from collection efforts after you file. |
| Will interest rates be lowered? | Yes. The company negotiates to lower interest rates. | No. | Yes. The company negotiates to reduce the rates. | No. | Not all debts can be included. So, interest payment of those included will be eliminated. |
| Can I save on principal debt amount? | No. | Yes, you'll save 40-60% of the outstanding debt. | No. You'll save in interest when rates are lowered. | No. You can save in interest if rates are cut down. | Debts are discharged; hence you're no longer personally liable for the debt. |
| What are the third party fees? | a) One time representation fee to send letters and receive calls from creditor/collection calls. b) Monthly representation fee. |
a) One time representation fee. b) Monthly representation fee. c) A percentage of savings on debt. |
a) One time representation fee. b) Monthly representation fee. |
No. | Filing fees and attorney fees. |
| Credit effects of debt solutions | |||||
| Impact on credit score | Positive | Negative at first | Positive | Highly positive | Highly negative |
| Entry on credit report | It remains on the report till account is paid in full. | Late payments stay for 7 years; account reported as "Paid", "Settled", "Paid as agreed". Negotiate for "Paid", "Paid as agreed" status. | Report shows you're paying through credit counseling agency or Debt management company. | Account reported as "Paid". | Remains on credit report for 7-10 years. |
| Negative affect on credit score | No. | Late payments bring down your score. But once you pay off bills, your score improves gradually. | No. | No. On-time payments will have a positive impact on your credit. | Brings down your credit score by 200 points or more. |
| Availability of new credit | It will take some time before you get new credit. | Late payments will make it difficult to qualify for new credit. | It will take some time before you qualify for new credit. | Getting new credit will be easier. | Cannot get new credit for 2-4 years. |
| What we suggest | No obligation free debt counseling | No obligation free debt counseling | No obligation free debt counseling | Do it Yourself | Avoid bankruptcy |
This chart is an example only and should be used for general comparison purposes only. Many varying factors
not accounted for will create differences as to each individual's circumstances and results.
Individual results may vary and are dependant on factors such as successful completion of program, creditor
cooperation, and ability to save funds.
1 Individual results may vary and are dependant on factors such as successful completion of program, creditor cooperation, and ability to save funds.
2 Assumes 3 year: Attorney fees $2000 + Filling fee $189 + 5% Trustee fee + $300 CCCS. While not all Ch. 13 bankruptcy plans require paying back 100% of the debt, this example does not add interest that may be charged under the bankruptcy plan.
3 Assumes 5 year: $50 counseling fee + $50/m service fee for 5 years. Additionally, an 8% fair share of client payments are paid to counseling agency and an average interest rate of 13% are used in calculations as reported by the NFCC and cited in Credit Counseling in Crisis: The Impact on Consumers of Funding Cuts, Higher Fees and Aggressive New Market Entrants, Consumer Federation of America and National Consumer Law Center, April 2003
4 Assumes 10 year loan total fees 6% of loan value and 11% interest
5 80% default rate is only an estimate based on antidotal industry information on trials performed by certain credit card companies in the 3 & 4th quarter of 2005
Are you wondering, "these figures seem too good to be true"? Well, they are not. Successful debt negotiations happen all the time. However, don't take my word for it, do a little research to verify the figures.
Keep in mind that all debt elimination programs have drawbacks. However, these obstacles don't need to be of great concern if you understand how creditors and debt collectors and operate.
First, by settling your debt, one or more of your creditors may file a lawsuit against you due to non-payment (creditors have no incentive to settle with you if you are making timely payments). Second, your credit will be temporarily negatively affected. Last, the debt negotiation company may "take the money and run".
However, by doing a little homework, these obstacles are simple to overcome.
First, debt collectors love to threaten delinquent debtors with the threat of a lawsuit. Why? Because most people are scared of lawsuits. Based on statistics, they know this is a very effective strategy to collect a debt.
Creditors would much rather settle with you than take you to court. It's very expensive to sue someone. Attorneys aren't cheap! Besides, debt collection agencies purchase uncollected debt from creditors for pennies on the dollar-anywhere between 5-25 cents. If they settle with you for 50 cents on the dollar, most of the time, they at least doubled their investment!
The worst-case scenario is that you end up making a payment plan with the debt collector. This rarely occurs. Almost all debt collectors would much rather settle.
So, make sure that the debt elimination program you choose comes with attorney consultation. They know how to handle the games that debt collectors play.
Another concern about settling debt with creditors is that debtors don't want their credit affected. However, you need to understand how credit works in order to know how credit is affected by debt negotiation. First, ask yourself "what would I prefer, to be debt free in a few years and have temporary negative credit or remain bombarded with credit card debt for life and have excellent credit?"
You must choose one because you can't have both. Why on earth would you want to choose option #2? So you can add more debt and dig yourself into a deeper hole that will inevitably lead you to bankruptcy? You need to get your priorities straight.
Besides, your credit is already negatively affected. If lenders see that your credit balances are nearing the high credit limit, what do you think that tells them? It’s a sign that you are either struggling or can’t control your spending. As a result, your credit score is appropriately lowered.
When you settle your debts, you no longer have credit card debt. Therefore, your FICO score starts to climb. In addition, make sure that a professional credit repair program is included in the package. This will further raise your credit score.
Last, select a company that offers a guarantee that is so strong, that it would be virtually impossible for you to be scammed.
Therefore, the trick to eliminating your debt is by implementing a program that offers solutions to the obstacles of debt negotiation. By doing so, you may dramatically increase your odds of being debt free quickly and safely... while saving you $1000's!
