Bad Debt Settlement - Laws That Protect the Consumers

Bad Debt Settlement - Laws That Protect the Consumers
By Hector Milla

Many people today are turning to debt settlement to help them control their budgets and finances. Many people are also worrying that there are too many strings attached to programs that help people with their creditors and that they are not protected by any laws. If you are thinking about debt settlement, research a few companies to find one that will fit your situation and needs.

Bankruptcy laws have changed making it harder for people to actually file bankruptcy. The new laws do promote other ways of handling your overdue bills, such as consolidation etc, as a better idea for straightening out your financial situation than bankruptcy.

Most debt collectors are still working out deals where you only pay back between thirty and seventy percent of what you actually owe. This also does not hurt your credit rating for many, many years like filing bankruptcy does.

These are provisions included in the Fair Debt Collection Practices Act that protect the public from being harassed by creditors and places limitations on the collection agencies. The debtor must receive fair treatment and be given a fair chance to pay off his debt and improve his financial situation.

A collector can only contact you in person, by mail, fax or telephone. They may not do this at places or times that are unreasonable. You can stop this or any harassment from an agency by writing a letter telling them to stop. After this, they should only contact you to say there is an action about to be taken against you. If you have an attorney or are in the process of a debt settlement those are the only people they may contact. They may not tell anyone besides the attorney and you that you owe money. The collection agency must contact you within five days after your first contacted and tell you the amount you owe the name of the creditor and what action to take if you believe the debt is not yours.

The thing to remember is that there are laws to protect you and that there are debt settlement companies that can help you handle the collection agencies and get your finances back on track.

By the way, by researching and comparing the best debt settlement services in the market, you will be able to determine the one that meets your specific financial situation. Nonetheless, it is advisable going with a trusted and reputable debt counselor before making any decision, this way you will save time through specialized advise coming from a seasoned debt advisor and money by getting better results in a shorter span of time.

Hector Milla runs the Best Debt Settlement Companies website - where you can see his best rated debt settlement service recommendation.

Visit for further information and read our full review of the best debt settlement company, plus articles and video training about how to get the most of your debt settlement process.

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5 Ways To Raise Credit Score

5 Ways To Raise Credit Score
By Gary Gresham

It's not as hard as you think to raise credit score. It's a well known fact that lenders will give people with higher credit scores lower interest rates on mortgages, car loans and credit cards. If your credit score falls under 620 just getting loans and credit cards with reasonable terms is difficult.

There are more than 30 million people in the United States that have credit scores under 620 and if you’re probably wondering what you can do to raise credit score for you.

Here are five simple tips that you can use to raise credit score.

1. Get a copy of your credit report

Obtaining a copy of your credit report is a good idea because if there is something on your report that is incorrect, you will raise credit score once it is removed. Make sure you contact the bureau immediately to remove any incorrect information.

Your credit report should come from the three major bureaus: Experian, Trans Union and Equifax. It's important to know that each service will give you a different credit score.

2. Pay Your Bills On Time

Your payment history makes up 35% of your total credit score. Your recent payment history will carry much more weight than what happened five years ago.

Missing just one months payment on anything can knock 50 to 100 points off of your credit score.

Paying your bills on time is a single best way to start rebuilding your credit rating and raise credit score for you.

3. Pay Down Your Debt

Your credit card issuer reports your outstanding balance once a month to the credit bureaus. It doesn't matter whether you pay off that balance a few days later or whether you carry it from month to month.

Most people don’t realize that credit bureaus don’t distinguish between those who carry a balance on their cards and those who don’t. So by charging less you can raise credit score even if you pay off your credit cards every month.

Lenders also like to see a lot of of room between the amount of debt on your credit cards and your total credit limits. So the more debt you pay off, the wider that gap and the better your credit score.

4. Don’t Close Old Accounts

In the past people were told to close old accounts they weren’t using. But with today's current scoring methods that could actually hurt your credit score.

Closing old or paid off credit accounts lowers the total credit available to you and makes any balances you have appear larger in credit score calculations. Closing your oldest accounts can actually shorten the length of your credit history and to a lender it makes you less credit worthy.

If you are trying to minimize identity theft and it's worth the peace of mind for you to close your old or paid off accounts, the good news is it will only lower you score a minimal amount. But just by keeping those old accounts open you can raise credit score for you.

5. Stay Out Of Bankruptcy

Bankruptcy is the single worst thing that will destroy your credit score. Bankruptcy will lower your credit score by 200 points or more and is very difficult to come back from.

Once your credit score falls below 620, any loan you get will be far more expensive. A bankruptcy on your credit record is reported for up to 10 years.

The reality of a bankruptcy is it will limit you to high-interest lenders that will squeeze out high interest rate payments from you for years.

It is better to get credit counseling to help you with your bills and avoid bankruptcy at all costs. By getting credit counseling instead of declaring bankruptcy you can raise credit score over a much shorter period of time.

Copyright © 2005 Credit Repair Facts.com All Rights Reserved.

Gary Gresham is a mortgage loan officer and the webmaster for http://www.credit-repair-facts.com He offers you credit information, debt elimination programs and informative facts that give you the knowledge to correct your own credit and credit report. For more credit related articles go to: http://www.credit-repair-facts.com/articles_1.html

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Can You Be Sued For Credit Card Debts-What To Do If You Are Being Sued For Debt

Can You Be Sued For Credit Card Debts - What to Do If You Are Being Sued For Debt
By K D Garrow

Being sued for debt is a frightening thought, but is an increasingly likely scenario for many consumers struggling through the credit crunch. One of the most common forms of consumer debt is money owed to credit card companies. The reason for this is not least because it is often very easy to get credit in the first place and much harder to keep track of plastic spending compared to hard cash coming out of your bank account. When times get tough, it is often credit cards we turn to in order to pay the bills or buy the things we need.

If you do find yourself in a serious debt crisis where you are unable to meet your commitments to pay back what you have spent, you may well be threatened with legal action by the credit card companies. They are well within their rights to sue you for their money, but they are only likely to do this if they think that is the course of action which is most likely to get back what you owe them.

Ideally, you should not be letting things go as far as being taken to court, but if you are already at that stage, it may not be as bad as you think. You cannot be sent to prison for an unpaid credit card bill if you have not been to court before. If the court judgement goes against you, the judge will order you to pay back the money you owe at a rate which the court thinks you are able to pay. They will examine your finances in order to make this judgement about what you can afford each month.

The best option is of course not to let your debts mount up in the first place, but this is easier said than done. If you already have substantial credit card bills that you are unable to pay, your best option is to try to negotiate a settlement with the card companies. This too is easier said than done, particularly if you do not understand how card companies operate.

Many people in this situation turn to debt settlement agencies, but you will need to pay them for this service, so ultimately it ends up costing you a lot more than if you do it yourself. If you understand how credit card settlement works, and can time your negotiations properly, you should be able to come to an agreement that will result in a large proportion of your debt being written off.

It is important to know what to say to the card companies and you need to understand the procedures they go through in order to time your negotiations to achieve the best results. Getting this right can make the difference between not reaching any agreement to settle, and achieving a settlement that writes off a huge chunk of what you owe, getting you out of debt in one stroke.

With the right guidance and information, you can negotiate directly will all the credit card companies you owe money to, and achieve the best possible settlement deals without paying substantial fees to a debt settlement company for their services.

Discover how to learn the secrets of effective credit card settlement. Follow the author's step by step guide to getting rid of debt by negotiating with your creditors on his Debt UK US website. K D Garrow has worked as a senior manager with significant financial responsibility for the last twenty years. His website offers free, unbiased advice on a range of debt related issues, including debt consolidation, IVAs and debt management plans.

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Do it Yourself Debt Settlement - A Viable Alternative to Debt Settlement Companies Or Bankruptcy

Do It Yourself Debt Settlement also known as Self Help Debt Settlement is a viable alternative to resolving your debt. The dirty little secret Debt Settlement Companies do not want you to know is: They charge you thousands of dollars for a service that you can accomplish yourself. Hiring a debt settlement company is like hiring someone to tie your shoes.

If you are like millions of Americans, you are searching for solutions to your financial problem. With an unemployment rate of 9.7 percent as of June 2009, many economists are concerned that the current trend could have catastrophic implications on the economy as a whole.

The State by State unemployment rates are even more disturbing. As of May 2009 twelve States have unemployment rates that exceed 10 percent. Of the twelve States four have unemployment that exceeds 12 percent. These States South Carolina and Rhode Island with 12.1 percent, Oregon with 12.4 percent and of course Michigan with an astounding 14.1 percent unemployment is clearly suffering the most.

The above statistics are not good news for the average consumer who is already experiencing financial difficulties. The outlook through the remainder of 2009 and early 2010 does not look encouraging either. In stating this, if you are already considering debt settlement, the question arises; how do I start negotiating with my creditors directly?

The first step to Self Help Debt Settlement is to research the entire process. There are a myriad of websites devoted to the process of debt negotiation. Most of these websites (In the interest of full disclosure, our website as well) are attempting to sell you something. The majority of these websites provide you with information that was gathered from the internet. Individuals can find all of this information on the internet with just a little research.

The next step is to gather all of your monthly bills together and establish a monthly budget. Make a list of your necessary monthly expenses to include your mortgage or rent, car payments, utilities, Insurance, gasoline, food and other household bills. Take this amount and multiply that sum by 1.2; this will give you an additional 20 percent cushion for unexpected expenses or emergencies. The difference between your total household income and the previously calculated amount is your monthly settlement budget.Start setting this amount aside as your settlement fund, as this fund accumulates use this as your benchmark for amounts you offer your creditors.

At this point you need to make an unyielding commitment to the process. It is essential that you understand that your creditors, in almost every case, will not even discuss settlements if you are currently paying them. Once you stop paying your creditors, the debt settlement process begins. The creditor is going to start escalating their collection processes in an attempt to mitigate their financial losses. Your creditors will start calling you to bring your account current. Do not avoid these phone calls; these calls are your opportunities to advise your creditors of your intentions and initiate the negotiation process.

When you are negotiating settlements with your creditors it is always in your best interest to offer settlements in one lump sum payments. If you have access to immediate cash, this is the best time to use it. Creditors are also experiencing financial difficulties in these trying economic times. If you decide to utilize investments (401k, Stocks, Bonds, IRA's and like investments) to settle your debt, seek the guidance of an experienced accountant first. The question you should ask any accountant is: Will I save money in the long term by utilizing these funds. Remember, your investments at best are generating 10 -12 percent interest. Your creditors are most likely charging you 2 - 2.5 times this amount in interest on your outstanding balance.

Now that way we have described the basics, is it any wonder why Debt Settlement Companies are flooding the airwaves (both television and radio) with their commercials. These Settlement companies are preying on your fears and lack of knowledge with commercials that make it sound like they are doing something special. The fact is (as several State Attorney Generals have recently stated) several settlement companies are making promises they cannot, or never intended to keep just to separate you from your money.

The Debt Settlement Industry utilizes the basic method described earlier in this article to settle the majority of debts. The majority of these settlement companies make consumers believe that they utilize "secret programs your creditors don't want you to know about". This and other like minded statements could not be further from the truth.

Debt Settlement Companies make claims that if you make them monthly payments your debt will be resolved with in 24, 36 or 48 months. The payment amount seems to be reasonable to most people. A basic rule of thumb should apply to the above: If it seems too good to be true, it probably is! What the debt settlement companies forget to advise their clients (or hide it in the fine print of the contract), is that they take the first several payments to cover their sign up fees.

Most people who enroll with Debt Settlement Companies are under the assumption that the creditors have working relationships with the Debt Settlement Company. This is a false assumption; in point of fact, they have an adversarial relationship at best. This adversarial relationship impedes as well as prolongs the debt negotiation process.

If you have read this article up to this point, you are clearly interested in settling or negotiating your debt. By now you have already started researching how the process of debt settlement works. We would like invite you to visit our website http://www.2settlemydebt.com for more information on our services. We have developed a self help debt settlement module that is Patent Pending as to the method utilized. We provide secure internet access to "user specific databases" and preformatted letters that assist individuals in negotiating directly with their creditors. The website also provides the users to choose either debt reduction or debt settlement programs.

How to Eliminate $7,500 Credit Card Debt - Debt Reduction Reviews of the Top Ways to Eliminate Debt

How to Eliminate $7,500 Credit Card Debt - Debt Reduction Reviews of the Top Ways to Eliminate Debt
By Adam Tijerina

If you have $7500 in credit card debt with an interest rate of 18%, which is what most people have, you will end up taking about 630 months to pay it off paying the minimum and you will pay over $21,000 in interest charges. Kind of makes you want to be your own banker now doesn't it?

There are several ways to eliminate your debt. You could pay it off on your own, which would probably take the longest to do, you could use debt settlement, debt consolidation, bankruptcy, a home equity loan, transfer to a low interest credit card.

Let's take a quick look at each of these options.

Paying it off yourself requires the most discipline. But then if you had any discipline you would not be in so much credit card debt. If you choose this route, I would suggest using the debt snowball method and starting with the lowest balance first. I used this method and in 10 months, I was able to pay off over $12,000 in credit card debt.

Next would be debt consolidation. Debt consolidation works by taking all your credit card bills and putting them into one monthly payment and rolling them into a new debt consolidation loan. The loan term is extended and your monthly payment goes down. You will end up paying a monthly fee, yes, even to a non-profit debt counseling company, of about $25-$50. You will also pay more in interest charges over the length of the loan. Using this method does not look good on your credit report.

Next, you could work with a debt settlement company and negotiate with your credit card companies and reduce what you owe by up to 50%. This also does not look good on your credit report as you are missing credit card payments as you build up your settlement fund. You will pay at least 15% of your debt to the debt settlement company. For $7500 in debt, that fee comes to $1125. That's a nice chunk of change when you can do it yourself. Debt settlement companies are not available in all states and most companies do not work with debt amounts under $10,000. The one company that I know of that works with $7500 is Credit Solutions. They are one of the largest debt settlement companies in America.

Next, you can take out a home equity loan and pay off all your credit card debt in one fell swoop. However, you take your debt and roll it into your house and are basically gambling with your house if you default on your loan payments. To me, that makes a home equity loan not worth the risks.

Transferring your credit card debt to a low interest credit card would be a good option if you can find one with a low APR offer and a low balance transfer fee. Most are now charging 3% of the balance transferred with no maximum. So on that $7500, that balance transfer fee would run you $225. Some great favor they are doing for you.

The last resort is bankruptcy and it should truly be your last resort. The cost of filing for bankruptcy varies from state to state and it can usually run from $500 to $2000. That seems like a high price to pay to eliminate $7500 of credit card debt. You will ruin your credit for a minimum of 7-10 years.

Making more money to pay more to your minimum payments is one option but make sure you do not increase your expenses with your increase in income. If you like to write, you could start a niche blog or write articles for Associatedcontent.com. For more money making ideas, check out WarriorForum.com.

You have several choices for eliminating $7500 of credit card debt. For more advice and to see what works for others, check out How To Eliminate Debt and get practical tips for eliminating credit card debt.

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Bad Credit Loans: Loans For Cars Are Out There (You Just Have To Look)

My mid-afternoon "trolling" of personal financial cyber news brought me to an interesting article on www.cnnmoney.com entitled "Things You Ought To Know". "Things You Ought To Know" was an article that dealt with a checklist of things to do before you set out to purchase a new or used car. One of the items on the list was "Shop For Money Before You Shop For The Car". I have to say, that is very good advise. Too many folks run to the car dealer, check out a car they like and then are limited to the "in house" financing available at the dealership. If you shop for the money before you shop for the car you will ensure that you are getting the best rates possible.
If you are in the market for a car we urge you to shop for the loan and right now while good rates are still available!

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Credit Repair : Proven Ways to Improve Your Credit Report and FICO Score (That Work)

When folks find that their credit score is suffering they often overlook the "common sense" things that they can do to improve their FICO score. Too often in American culture we want to wave a magic wand and have our problems all vanish instantly. There are proven tactics that can have a very positive effect on your credit score. Some of those common sense measures are...

First - Pay your bills on time! Too many people take a lazy approach to using grace periods on their bills as a way to manage their finances. They fail to realize that on their credit report this is a huge black mark. If you have never checked your credit score before then you are in for an education on just how diligent these agencies are in recording your financial life.

Second - Pay off debt rather than moving it around. Just because you moved a balance from a high interest account to a low or no interest account doesn't equate to an improvement in your score. The credit reporting agencys still see it as a debt you owe. Your cash flow might improve but your score won't!

Third - Don't close unused credit card accounts as a means of lowering your score. Keep the account open and the balance at zero. Closing it will actually lower your score.

Fourth - If you have just recently begun managing your credit don't open new accounts unless absoluteley necessary. People often believe that opening a new account just to demonstrate prompt bill paying history will help their cause. The only thing that will help your cause is to start paying your "existing" accounts on time. See number one!

Fifth - If you are looking for a loan make your search very focused and don't take a long time searching! The credit bureaus take notice of lengthy and unfocused loan searches and your score will suffer if you are involved in a lengthy search.

Sixth - If you are having trouble meeting your obligations seek out professional help. Debt and the resulting damage to credit scores has necessitated the need for professional debt programs.

What We Have: A FREE Credit Repair Analysis. You can begin the process in 30 seconds!

Who's It For: Anyone who desires lower finance charges on ALL your debt. Anyone who wants to save thousands of dollars in interest.

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