Debtmerica Website Disclaimer: Last Updated as of July 26, 2011
*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.
Credit Management
Friday, 19 November 2010 03:00
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.Consumer Credit Counseling
Consumer credit counselingworks with consumers by placing them into a repayment plan. Interest rates, late fees and penalties are negotiated in this program and it could take up to 4-5 years to pay off. Similar to other credit management programs, this solution may not be suitable for everyone. Below is a list of pros and cons of this program. Weigh your options carefully before choosing what is best for your current situation.
Pros
• The program places you into a monthly payment plan for an allotted time frame. Once you complete the program you are then debt free.
• Generally, one payment is made to the credit management counselor, instead of having to make multiple payments to several different credit card companies. Organization tends to be a problem for a lot of consumers who have to keep up to date with multiple credit cards. The counseling program allows them to make one payment to the counselor and the credit counseling company manages all the accounts and makes payments to the creditors on your behalf.
• If you have been late multiple times on your payment, your interest rate may be as high as 20%. Creditors are more likely to lower your interest rates knowing that you are in some form of credit management program.
Cons
• You may find that the minimum payment required to complete the program is too high. Since, the credit counseling program focuses on the reduction of interest rates and not the reduction of principle balances, you may find that the program isn’t aggressive enough for your situation. If this is the case, you may want to consider a debt settlement program where your actual principle balance is negotiated.
• For some, the length of the program may be too long for certain financial situations. When in a credit management program, if the payment is missed there is a chance that the creditor will increase interest rates or reinstate penalty fees. So, if you are unable to make a payment due to a financial hardship, the interest rates and penalty fees may be reinstated.
• Debt 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 caused by such a credit management program.
• Creditors who agree to lower or stop charging you interest, may place “freezes” on your accounts even though you have been current on your payments even before starting the credit counseling program. This will prevent you from using your credit cards once you are in the program.
• The credit management program does make a mark on your credit report. The creditors that are paid off through this program are notated on the report as ‘Customer in CCS.’ This notation on your credit report is not supposed to impact your score, however, it may play a role in whether or not the person who is offering you credit will do so, with such a mark on your credit report.
• If you are trying to obtain a mortgage, this may prevent you from getting approved. Most lenders frown upon such marks on your score.
Debt Settlement
More aggressive than consumer credit counseling, debt settlement programs work on reducing the actual principle balance of the debt, and can provide a constructive alternative to credit management. Trained negotiators work with credit card lenders to reduce the total amount owed on each card, which differs from consumer credit counseling where only the interest rates and late fees are reduced. A debt settlement program places consumers into a payment plan that fits their budget. These affordable payments are often as low as half of their combined current payments. Although debt settlement has a short-term negative impact on credit, this aggressive program tackles the debt in about 124-48 months.
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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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