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*Clients that are able to make the monthly program payments generally experience a 50% reduction of their enrolled balance before fees, or approximately a 29% reduction after payment of fees over a 24-48 month period. Individual results may vary based on ability to save sufficient funds and complete the program, the creditors in your individual portfolio, and amount of debt enrolled. Statements made are examples of past performance and are not intended to be a guarantee that your debt balances will be lowered by a specific amount or percentage, that you will be debt free within a specific time period, or a guarantee of future settlement results. Debtmerica, LLC guarantees it will not receive any fees until the terms of your debt have been altered with one or more of your creditors. While our programs work aggressively to reduce your debt balances, creditors are under no contractual obligation to negotiate or accept settlement offers. We do not assume consumer debt, make monthly payments to creditors or provide tax, bankruptcy, accounting or legal advice and we do not provide credit repair services. Please contact a tax professional to discuss tax consequences of debt settlement. By providing your contact information, you agree to receive return telephone calls, emails or other communications from Debtmerica, LLC and/or its affiliates and expressly waive any “No Call” preference or registration. Photographs used are not actual clients. Debtmerica, LLC is not affiliated with MSNBC, Fox, CBS, 500/5000 or OCBJ and logos used are registered trademarks of their respective owners. Programs not available in all states. Read and understand all program materials prior to your enrollment.
Getting Out of Debt
Tuesday, 09 November 2010 03:00
Many consumers across the country are finding themselves drowning in an endless pile of bills these days and would like to be getting out of debt. While some are in the position to reduce the amount of debt they owe to creditors by placing themselves on a strict budget, others are finding that a loss of job or a decrease in pay is making it nearly impossible to make ends meet. As a result, many are turning to professional help to get themselves out of debt: Consumer Credit Counseling, Bankruptcy, and Debt Settlement. Consumer Credit Counseling
One sensible way for consumer to be getting out of debt is to enroll in a consumer credit counseling program. Consumer credit counseling focuses on financial advising and the consolidation of debt. A company is hired to manage your consumer debt for a period of time. This method can take up to 4-5 years before the consumer completes the program and is done paying off all of your debt. The program works on placing consumers into a repayment plan while negotiating the reduction of interest rates, late fees and penalties. Similar to other debt programs, this solution may not be suitable for everyone. Since, the program works on only the reduction of interest rates, late fees and penalties and does not reduce work on reducing principal balances, some may find that the monthly payment to complete the program is still too high. Debt being paid through the program is noted on the credit report as “not being paid as agreed”. Although, this notation is not supposed to impact your actual credit score, it may prevent you from getting approved for a new credit card or mortgage. Most lenders and creditors frown upon such marks on your score.
Bankruptcy
When it comes to getting out of debt, bankruptcy, commonly described as “liquidations” or “reorganizations” is a legal process that helps consumers eliminate debt entirely or repay debt under the discretion of the courts. Although bankruptcy can permanently eliminate consumer debts and provide a means for the consumer to have a fresh start, there are serious financial hurdles one will face after filing for bankruptcy. One of the main obstacles is the inability to obtain a mortgage loan or credit. Typically speaking, a bankruptcy will be disclosed on your credit report for up to 10 years. Most lenders and creditors will not offer loans or credit to someone with this mark on their credit report. And if they do, the interest rates will be incredibly high. Due to the long term damage that bankruptcy can cause to your credit, bankruptcy should generally only be considered if all other debt management options have been considered or if you are in an urgent financial situation.
Chapter 7 Bankruptcy
Chapter 7 Bankruptcy, also known as a liquidation bankruptcy, is filed when the debtor has mostly consumer debt. In Chapter 7 bankruptcy, a trustee is assigned and is responsible for collecting and selling non-exempt property. The proceeds from the sale are then allocated to creditors and the debtor is then discharged for all dischargeable debts. As all debts are typically discharged, this may be the fastest way for people who want to be getting out of debt.
Chapter 13 Bankruptcy
Chapter 13 Bankruptcy, also known as the reorganization bankruptcy focuses on placing consumers into a repayment plan where their debts are paid off over a span of three to five years. This type of bankruptcy is a better option for individuals who have non-exempt property that they do not want to lose. And is an option for those who have a steady income with enough coming in to spend on reasonable expenses with some left over to pay off their debt.
Debt Settlement
Debt settlement provides a way for consumers to pay down and reduce their debt while avoiding bankruptcy. Since its focus is to reduce principle balance, it is more aggressive at lowering debt than consumer credit counseling. Debtmerica, a debt settlement company, offers debt reduction programs that aggressively attack credit card debt and may enable debtors to get our of their financial rut in about 24-48 months. Although this option has a short-term negative impact on one’s credit, this option is best for consumers who want a more aggressive approach than credit counseling and want a second chance without having to go through the grueling process of filing for bankruptcy.
For those individuals looking to be getting out of debt, there are many alternatives. The key for those consumer is to thoroughly research all of the available alternatives and choose the plan that fits in with their overall financial goals.
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About Debtmerica
Debtmerica is a leading debt settlement company that offers assistance to individuals and families who are experiencing financial difficulties and hardship.
We offer debt resolution programs that specialize in negotiated debt settlement that assists clients by reducing debt balances while providing an affordable monthly payment.
Our professional and knowledgeable staff has helped thousands of consumers get back on their feet financially.
Achievements
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Debtmerica has had one vision since inception - to help Americans nationwide attain financial independence. At Debtmerica, we're proud of our achievements and honors. They represent our commitment to our vision and clients. |
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Top Articles to Help You Lead A Debt-Free Life
- Debt Consolidation: “Debt Consolidation” is one of the most commonly misunderstood and misinterpreted personal finance strategies that consumers inquire about all the time. While some view it as a method of taking on new loans, others see it as a debt relief alternative. It is more important than ever for inquisitive consumers to have a very strong understanding of exactly what debt consolidation entails, and the impacts it can have on personal finances.
- Debt Relief: Debt relief is defined as a partial or total forgiveness of debt. When the term is used by the government, it usually refers to the forgiveness of debt to underdeveloped countries. Recently, it has begun to refer to the millions of consumers who are overwhelmed with debt seeking financial relief from their unsecured debt.
- Credit Card Debt: Credit card debt is an example of unsecured consumer debt, accessed through credit cards. Debt results when a client of a credit card company purchases an item or service through the card system. Debt accumulates and increases via interest and penalties when the consumer does not pay the company for the money he or she has spent.
- Debt Settlement: Debt settlement programs use a third party to negotiate lower balances and interest rates on unsecured debt. This type of debt management plan helps provide consumers an alternative to bankruptcy while reducing your outstanding debt.
- Credit Counseling: There are a numerous options for consumers who want to start getting their finances under control after accumulating large amounts of debt, which could inevitably lead to credit problems further down the road. Consumers who are in control of most aspects of their finances, but still feel like they could use additional help managing their debt burden, could certainly benefit from the assistance of a consumer credit counseling service.
- How Do I Get Out of Debt?: Now that the national economy is beginning to recover and people are having a better time dealing with their personal finances, many consumers who found themselves sunk deep in debt over the last few years may be asking themselves the question, “How do I get out of debt?” Fortunately, there are a number of avenues consumers can take to get out of debt, each with benefits and drawbacks depending on how quickly people need to fix their financial problems.
- 10 Tips to Avoid the Debt Trap: Have you ever thought about why so many of the people you know are struggling with debt? Do you ever wonder why banks keep lending to certain individuals, even when they are falling behind on their payments? Did you know that debt problems are a leading cause of major societal problems, such as stress, divorce and alcoholism?
- Credit Management: Many consumers are finding themselves buried under a pile of mounting debt. With interest accumulating month after month in addition to late fees being charged, many consumers are finding it difficult to make just the minimum payments on their credit cards. Although this may seem like an endless battle, with a strict budget and some discipline there are credit management strategies and solutions that will allow consumers to reduce or even eliminate their debt.
- Credit Card Debt Reduction: In recent months, many Americans have made a greater effort to seek credit card debt reduction and reduce the balances they owe, but some may not know where to start. Fortunately, there are several options available for consumers thathave a financial goal to achieve credit card debt reduction.
- Credit problems: Paying down high levels of debt is one of the best ways to improve credit problems and increase one’s credit standing. But many people cannot do that so quickly, especially in this economy. About one-third of a credit score is based off of a credit utilization ratio, which is the total creditbalances divided by the total credit limits. A great target is to use no more than 30% of one’s available credit.
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