Debt can drive you to suicide.
Get out of debt before you lose your house, your car, and even your family. In our society being in debt is equivalent to being in a psychological jail, you will spend your entire life trying to get out while your debt grows and grows and grows. You will never be completely happy and never be completely satisfied, there will always be the burden of debt and owing inside your heart.
Debt consolidation is defined as the process of organizing loans and debts into one low-interest loan that can be paid off regularly. Debt consolidation is often a last resort for people who are in extreme debt and trying to avoid bankruptcy. Many people who are not in danger of bankruptcy, but have debt on high interest credit cards may also choose to consolidate their debt. Consolidating debt can help someone avoid bankruptcy, and help them manage their money more wisely. Debt consolidation is also convenient because it becomes easier to keep track of debt and one is only required to pay off one loan rather than several debts. In order to consolidate one's debt, collateral must be given. The collateral is usually the home, or a vehicle.
As putting these things up for collateral is probably not the brightest debt idea there are other options. One being to try a Debt Consolidation Company.
Debt Consolidation Company
Central to debt consolidation is a debt consolidation company. It is important to choose the best company to fit your financial needs. As is common in any financial sphere, there are reputable companies, and companies that use underhanded methods to gain more money from the customer. Most debt consolidation companies do use honorable methods, but it is still important to know what some underhanded companies will do.
1. Some companies will wait until you are backed into a corner. If you know you are headed for financial trouble and wish to consolidate your debt, make sure your company starts working on it right away. Some companies will delay in debt consolidation so that the customer gets in more debt and therefore has to pay the company more money in the long run as well as short term. A customer who has to consolidate debt or else face bankruptcy can be forced to pay extremely high refinancing fees or debt consolidation fees.
2. Some companies will also charge exceptionally high debt consolidation fees to people who have high interest loans. Sometimes these fees can be extremely close to, or at the state maximum for mortgage fees. It is important to know how much companies are able to charge you, and compare that to what a company is offering. The lowest price is generally the best idea. Always be on the look out for unnaturally high fees because some companies will attempt to scam you.
3. Last, and certainly not least, you should be aware of companies practicing "predatory lending." Predatory lending is a practice by some unscrupulous companies to allow their customers to become so in debt that no other company will help them. This is a way that a company can control you and make sure to make significant financial gains from your misfortune. Any debt consolidation service that attempts to control you is not a good service.
The decision to consolidate debt is a very important decision. It is important to understand this fact when looking for a company. Knowing how companies will try to make extra money at your expense is imperative to having a successful debt consolidation experience. Choose the best company and you will notice a positive outcome.
Debt consolidation is a wise option for people with nowhere else to turn, but it must be a well-thought-out, educated decision.
Change you life with debt consolidation.
Make sure to read the other posts below before you take these steps as using a Consumer Credit Counseling Service may not be the right route for you.
7/22/07
7/7/07
Options to Clear Up Your Outstanding Debts
What happens if you start using a CCCS company and they get your monthly payments all set up. You make all of your payments on time and they pay all of the payments on time. The bank not goes defaulted (if you read my earlier posts this would make sense) but your credit report goes down the drain and your get charge off and creditors start calling you again. Some from outside or third party collection agencies trying to collect on a payment that you are already making.
Well, you have a few options.
1) Set up a new payment structure with the creditor that is now calling. Your bank note is already charged off so at least you are paying it back. Before you take this method make sure to call the bank you took this loan from, as if they outsourced it to a third party collection agency they will give you that information.
2) Stop paying all together for that loan. Once your loan gets charged off your credit report will not get updated to Paid - Charge off or Settled - Charge off until you don't owe them anymore money. The original balance will still show as delinquent for as long as that payment is outstanding. What I would do, hold all that money until I had enough to settle with. Even though companies are going to tell you that they want the full amount or nothing, you should still be persistent.
Working in this type of collection department we would take settlements sometimes as little as 40-50% of the remaining loan balance. Rarely any lower but that's about the standard.
Before you look toward this option make sure that this company that is contacting you isn't looking toward the legal option. A judgement is one of the worse things that can happen to your credit history as it will remain there for approximately 10-20 years. How do you know if a judgement is possible? Well if you owe less then $5000.00 it's probably not profitable for a company to process a judgement because the legal fees will exceed the $5000. Sometimes its possible for the amount to not be a factor as some banks will just send the note to a lawyer regardless of the amount owed, so make sure you check.
3) Your third option is to dispute the claims. Sometimes a dispute will remove the debt from your report all together. Even if you owe the money you can always depute it. In order to do this you must submit a letter in writing to all the major credit bureaus. The letter must be clear and concise, and shouldn't run on about irrelevant information. It should have the account numbers, then credit report information and the reason for the dispute. Many times this works because if the creditor doesn't get back to the credit bureau in 30 days or less the whole thing is marked as requested in your dispute. Banks are usually so busy that they don't get to the disputes for more then 30 days.
4) The fourth option is Bankruptcy. Although it might seem like the worst option, sometimes it is the best option. Bankruptcy can be very costly, as it might cost about $1200 dollars just to retain a lawyer and file, it will completely eliminate all judgments and money owed. I will be writing another post on this later, so stay tuned.
What happens if you start using a CCCS company and they get your monthly payments all set up. You make all of your payments on time and they pay all of the payments on time. The bank not goes defaulted (if you read my earlier posts this would make sense) but your credit report goes down the drain and your get charge off and creditors start calling you again. Some from outside or third party collection agencies trying to collect on a payment that you are already making.
Well, you have a few options.
1) Set up a new payment structure with the creditor that is now calling. Your bank note is already charged off so at least you are paying it back. Before you take this method make sure to call the bank you took this loan from, as if they outsourced it to a third party collection agency they will give you that information.
2) Stop paying all together for that loan. Once your loan gets charged off your credit report will not get updated to Paid - Charge off or Settled - Charge off until you don't owe them anymore money. The original balance will still show as delinquent for as long as that payment is outstanding. What I would do, hold all that money until I had enough to settle with. Even though companies are going to tell you that they want the full amount or nothing, you should still be persistent.
Working in this type of collection department we would take settlements sometimes as little as 40-50% of the remaining loan balance. Rarely any lower but that's about the standard.
Before you look toward this option make sure that this company that is contacting you isn't looking toward the legal option. A judgement is one of the worse things that can happen to your credit history as it will remain there for approximately 10-20 years. How do you know if a judgement is possible? Well if you owe less then $5000.00 it's probably not profitable for a company to process a judgement because the legal fees will exceed the $5000. Sometimes its possible for the amount to not be a factor as some banks will just send the note to a lawyer regardless of the amount owed, so make sure you check.
3) Your third option is to dispute the claims. Sometimes a dispute will remove the debt from your report all together. Even if you owe the money you can always depute it. In order to do this you must submit a letter in writing to all the major credit bureaus. The letter must be clear and concise, and shouldn't run on about irrelevant information. It should have the account numbers, then credit report information and the reason for the dispute. Many times this works because if the creditor doesn't get back to the credit bureau in 30 days or less the whole thing is marked as requested in your dispute. Banks are usually so busy that they don't get to the disputes for more then 30 days.
4) The fourth option is Bankruptcy. Although it might seem like the worst option, sometimes it is the best option. Bankruptcy can be very costly, as it might cost about $1200 dollars just to retain a lawyer and file, it will completely eliminate all judgments and money owed. I will be writing another post on this later, so stay tuned.
7/6/07
Should you Trust CCCS for your Credit History
The Consumer Credit Counseling Service CCCS doesn't care if your credit rating gets messed up, the banks don't care if your credit ratings get messed up. All any of these companies really care about is getting your money. You are the only one to make sure your credit rating is correct.
In order for any business, even Organizations to be successful is to make money, so why are you giving all your money away to those CCCS companies.
While I was working at Washington Mutual Bank I had noticed that we would deal with CCCS companies just to get our money. This was until the note was charged off and deemed un-collectible. Does this sound fare to you if your making a payment every single month to your CCCS company? As my other article states that CCCS doesn't help your credit rating. They may even mean that your going get charge offs on your credit report. Who wants that?
To Cut things short, first don't let yourself get this far in debt, then if you get in debt and you can't pay it back right away, search for new methods with smaller minimum payments or lower interest rates so that you can pay it off faster.
If you are planning on using a CCCS company, you probably should go with the Smaller Minimum payment option. This is because that frees up some valuable monthly payment for the highest interest rate loans first.
The Consumer Credit Counseling Service CCCS doesn't care if your credit rating gets messed up, the banks don't care if your credit ratings get messed up. All any of these companies really care about is getting your money. You are the only one to make sure your credit rating is correct.
In order for any business, even Organizations to be successful is to make money, so why are you giving all your money away to those CCCS companies.
While I was working at Washington Mutual Bank I had noticed that we would deal with CCCS companies just to get our money. This was until the note was charged off and deemed un-collectible. Does this sound fare to you if your making a payment every single month to your CCCS company? As my other article states that CCCS doesn't help your credit rating. They may even mean that your going get charge offs on your credit report. Who wants that?
To Cut things short, first don't let yourself get this far in debt, then if you get in debt and you can't pay it back right away, search for new methods with smaller minimum payments or lower interest rates so that you can pay it off faster.
If you are planning on using a CCCS company, you probably should go with the Smaller Minimum payment option. This is because that frees up some valuable monthly payment for the highest interest rate loans first.
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