Archive for the ‘debt relief’ Category
Monday, April 30th, 2012
Reasons not to Discharge Debts through Bankruptcy
People get discouraged when their monthly payments are not sufficient to wipe out their debts. Some of these people file bankruptcy online when they are unable to pay off their debts through the non profit debt settlement programs. Their credit scores drop by 200-250 points after filing bankruptcy. Moreover, they are not able to save all their assets through bankruptcy. This is why many financial experts discourage people from filing bankruptcy.
To justify the above statement, here are few strong reasons that bankruptcy was and will never be the best option to regain the lost financial peace.
Forget the credit cards: Make yourself acquainted with the use of cash every time you step out of your home since filing for bankruptcy will take away all your credit cards. You’ll feel the actual pain when you are struck with any sort of emergencies where you need some ready cash but it will be a distant dream to get that. Moreover, bankruptcy courts will liquidate a part of your savings to meet the tax obligations and pay the creditors. So, in this case you’ll loose both the credit cards and your emergency funds.
Jeopardize your credit score: Bankruptcy will appear on your credit report at least for 10 years. It is one of the biggest reasons that FICO scores drop drastically. Seeing such a stigma on your credit report, future creditors will be extremely wary to lend you any money.
Pay for the secured debts: There is no way you to escape the payments for secured debts like student loans or child support because these financial obligations are non-dischargeable even if you go bankrupt. Debts incurred from incidents like credit card fraud are also non-dischargeable.
Loose assets: You stand to loose many of your luxurious goods, second car, vacation home, stocks and various other investments because bankruptcy courts sell these items to discharge your debts. Though you are allowed to keep your principal home and other essential assets, yet its not that easy to part with the belongings you are dependent on.
Appear on the public records: Your bankruptcy will be recorded in the court documents. Bankruptcy proceedings are recorded as public documents, so your details will find place in it too. Any one investigating your financial history will get an easy access to those documents.
Therefore, it is better to get the help from a non profit debt settlement company to discharge your debts than opting for bankruptcy.
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Friday, November 4th, 2011
Financial overload is a lot of stress. It hinders your knack of finding solutions to become debt free. There are a lot of options you can choose before you can finally find the right one for you. Hopefully this debt relief article will help you in your search for answers to your financial difficulties.
Be a responsible payer, the earlier you settle your accounts the lesser your chances of being charged with tax loans. Nowadays it is difficult to trust, but your creditors took a risk on you hopeful that you would mutually benefit from the agreement. This is a win-win situation. Your creditors earn from your loan (through the interest) and you will gain a favorable credit report that is very crucial in determining your credit score.
When choosing what credit to use in your financial transactions choose the one that can give you more profit -corporate credit. This type of credit will give you several options to choose from with regard to paying your debts, plus your net worth will boost as you do business deals. Another type of credit is called personal credit, although this system keeps you motivated to pay your creditors it doesn’t give you the increase you need for your net value.
It is not a fact that bankruptcy will get you out from debts, in most cases it does the opposite. You might not know the process which happens upon filing bankruptcy. First you will be asked to write a list of all your creditors. Then you will be requested to inform all your creditors through a formal letter reporting that you filed for bankruptcy. The next event that will happen will be a lot more difficult because you will be forced to divulge all your asset information breaking the walls of your private life. Of course there will be a court room trial which is made to investigate your financial restructuring plan which will be attended by a lot of people. Another disadvantage of filing for bankruptcy is the filing fees you need to pay which is around $5, 000. You can decide on how to settle your balance, usually it would take 2 to 5 years for that which you need to pay on monthly installment base.
Many banks in the US have become strict with their laws when it comes to debt settlement. Let me give you a list of some of the banks which would not settle with anyone: Citibank, Amex, Capital One, Discover and the list could go on and on. These are just some of the facts that settlement or relief programs personnel don’t want you to know. Another thing they won’t be telling you is about their secret charges of up to 15% of your total balance which is really a big amount to waste on them! So be very careful in choosing such programs and always ask them to disclose all possible charges beforehand.
If you are capable to buy assets then do it! It is something that can give you a long term benefit even without putting effort to it after your investment. Let me give you an example: when you purchase a house you can have it rented or live in it or have someone else take care of it. For several weeks or months it will not give you a big profit yet but once you sell it after sometime say 5 years, the value of the house will increase giving you a very big profit! But just a warning, very rich people or even politicians don’t name their assets to their names for the sake of security. No one will be able to take away something from you if they don’t know you own anything, makes sense!
Hope you find this article interesting and informative. So good luck and have a debt free living…today!
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Monday, October 24th, 2011
People who are experiencing debt problems think that the
only way to get out from this tragic fall is by filing
bankruptcy. Chapter 7 bankruptcy is one way these people
consider but it has become difficult to accomplish because
they currently changed their laws. Chapter 13 bankruptcy is
another option to consider but it doesn’t always provide you
the protection you need for your finances. Bankruptcy in
general gives access to other people from intruding to your
assets and controlling them. These will just add weight to
your load especially if you are someone who doesn’t know
anything about the legalities of the situation.
Stopping payments and debt lawsuits are the things which
need help the most when somebody has lost his job. This will
save him from having more debts and liabilities. This may
sound unsettling especially in a difficult situation but
there are several ways to achieve this. Find a good service
that will aid you with your problem, one having enough
knowledge and skill in dealing with such matters and can
provide the legal documentation that will resolve the issue.
Deciding to use a service is a smart act as it will give
you a lot of options you can benefit from. When you are
facing a debt lawsuit it is inevitable to be harassed by
different credit agencies and sometimes you couldn’t stop
but fight back which they can use against you. These
services are capable of giving you a new contact number so
those agencies can’t contact you anymore because the service
do all the necessary actions for you. If these agencies
still have the hold of you the service will be able to
record any conversations made which is good because they can
give you the necessary counseling you need if something went
bad during your conversation with the credit company.
Be very careful in choosing the service you will use
because the solutions to your financial debts mainly rely on
them. Make sure they are people with a good reputation and
have the experience needed to get you out of this bad
situation. They should be able to put an end to debt
lawsuits and defend your assets. You also have to check on
their available program that suits your needs and check if
their price is reasonable.
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Monday, June 13th, 2011
Simply because you have big debts and/or are not capable of paying on the schedules your creditors have demanded or dictated does not alter the person you really are. Compare this mentality to how drug dealers give free drugs to kids at school. Then as soon as they are hooked, sell it to them at a very high price. You have been taken advantage of, robbed.
A Bunch of well esteemed people throughout times past had debt troubles, even without the modern consumer credit structure we currently have in our economy. Thomas Jefferson at the moment of his death owed, adjusted for inflation, $10,000,000. In order to help pay off Abraham Lincoln’s debt and over due bills many of his surveying tools were seized and sold. Another famous person in history is Daniel Boone. He went bankrupt and creditors required him to leave the state of Kentucky permanently and in 1788 Boone settled in the town of Point Pleasant on the Ohio River in what is now known as West Virginia. John Henry Heinz’s company filed for bankruptcy in 1875. Another person you may have heard of is Rembrandt. He went bankrupt in 1656. Big time boxer and hall of famer Mike Tyson went bankrupt after earning over $300 million dollars. The Musician/Pop Artist M.C. Hammer filed and declared bankruptcy. P.T. Barnum filed for bankruptcy before he started his legendary circus company
Tags: banking system and Credit, debt
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Wednesday, June 8th, 2011
It is important to build your case and establish a basis for your defense in the event that you are sued over a collection account or past due debt. You should always dispute collection accounts and request validation.
The Fair Debt Collection Practices Act provides that you can request a verification of any collection account that is in dispute. In the case of Chaudhry v. Gallerizzo, 174 F.3d 394, 43 Fed.R.Serv.3d 1063 (4th Cir. 04/05/1 999), the court ruled that the collector (or creditor) is only responsible for providing some record that they have your name spelled correctly and that the account number and mailing address is correct. We recommend that you send a “Request for Validation” instead of the request for verification the purpose behind this is because it helps us find out what information the collector does have or how they will act in response.
The “Request for Validation” also will allows you to collect the information necessary about the creditor or collector in order to evaluate your collection risk. This is because in response to your request, you will likely receive many copies of banking statements and other records that the creditor or collector believes establishes the right to collect on the account. Even though in the case of Chaudhry v. Gallerizzo case it specifically does not require the creditor or collector to provide all of the documents we recommend that you request that they answer all, it does establish a basis for a lawsuit defense if in the event that your sued when filing your answer, affirmative defenses, counterclaim, discovery and summary judgment. Without this important request, much of your pleading or discovery requests could be denied, stricken or overruled due to a judge waiver.
Tags: Chaudhry v. Gallerizzo, collection dispute, collections credit card debt, credit card lawsuit defense, debt collection lawsuit, debt collection letters dispute, debt collection negotiation, debt collector validation letter, debt dispute letters, debt evaluation, debt repudiation, debt validation letter, debt verification letter, dispute bill collector, dispute debt, FDCPA Dispute Letter, past due debt, Request For Validation, Request Validation, Request Verification
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Monday, May 2nd, 2011
The final secret that I would like to share with you is: Invest in your own expenses or debt. To give an example of this lets say that each time that you decide to take a toll road to work to save time that it will cost you money. You could invest in municipal bonds from the taxing authority that is collecting the toll from you and become a creditor of the jurisdiction instead of one of its debtors. Another example is Beef. Well let’s think about this do you think it would be a good idea to buy a cattle ranch or to buy ownership in the distribution? In evaluating the risk you could see that it is less volatile, mainly with a retailer that is properly managed.
What about university tuition fees? Okay well, I’m not going to start explaining that one so you will just have to talk with a good financial planner. You’ll kick yourself for not doing it sooner.
The point is with all of the 7 secretes that I have been sharing is that you must change your habits if you want to resolve your debt problems. You cannot get out of debt by think the same way that you got into debt.
I sincerely hope that these tips have helped and that we can talk very soon.
Allan Henry
Tags: buy credit card junk debt, expenses and debt, Invest in junk debt
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Monday, April 18th, 2011
The final debt relief option we will evaluate when taking into consideration the true Cost to get out of debt is asset protection and debt resolution which is what we provide at Plan B Consultants. There are variables that establish the actual cost of this option but we will use the following assumptions: You are current on all payments to your credit card debt; You have some credit available to utilize on your cards; You have some small money available for making monthly payments; and You live in a state where wages or paychecks can be garnished by creditors.
Using the previous example of $40,000 of unsecured credit card debt from our earlier examples, we can conclude that this is by far the lowest cost option, and the quickest way to get out of debt. It will also have the least long-term impact on your credit scores. At the $40,000 debt level, the total cost to get out of debt, including the fee for the program, for a couple is less than 40 cents on the dollar. And the best part is, the entire program can be completed in around 18 months – which is by far faster than any other option available. Because of the leverage this type of program provides, you can expect to negotiate the debt on your terms not the creditors and pay off your debts for around 20 cents on the dollar and the balance will be in program fees.
Our Asset Protection and Debt Resolution option will allow you to hold your creditors at bay while you accumulate enough funds to pay your creditors off at a substantial discount. You should expect to spend a total of around $15,000 to become debt free using this process – a tiny proportion of the cost of any other option we have previously discussed in these blogs.
Tags: debt resolution, plan b consultants
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Monday, April 18th, 2011
This is another popular, and very expensive, option for getting out of debt. Basically there is no attempt made to reduce the principal balance owed, only to negotiate more favorable interest rates and perhaps lower monthly minimum payments. The typical program in this option takes 60 months and you will end up paying back more than the total debt you originally started with.
Using our earlier blog posts figure of $40,000 in credit card debt paying 18% interest and making payments of $1,200 a month we can see how the costs add up in a credit counseling program. It is possible that you could get the interest rate reduced to an average of 10% and set up a payment plan for 60 months. Using a credit card debt calculator found at http://www.federalreserve.gov/creditcardcalculator/ we can determine that you would now be paying $850 each month and a total interest of $10,993. The total of payments and interest then would be $50,993 to be debt free in five years.
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Monday, April 18th, 2011
Due to plummeting real estate values, this option has lost popularity as a debt relief choice in recent years but is still is an obtainable option to a very few people who qualify. Even though the low monthly payments available under this option can seem attractive, don‘t be fooled by this option because it is by far the most expensive option to for getting out of debt.
Since in this option you will be paying one hundred cents on the dollar, you would have to borrow $40,000 plus pay closing costs of about $1,200, for a total loan of $41,200 to be paid back at 9.5% interest over the next 15 years. This option would have a monthly payment of about $431, but it would last for a full 15 years, or 180 payments. The total amount paid back would be the $41,200 principal plus interest of $36,240 for a total amount of $77,440, or 194% of the original debt!
But hold on. What about the interest deduction available on the home equity loan from my taxes? Based on a total interest payment of $36,240 and again assuming a 15% federal tax bracket, you would save a total of about $5,436 in taxes over the 15 years. Even if we deduct this sum from the total paid you would still end up paying $72,004 back on $40,000 in credit card debt – this is a very poor deal.
Tags: Cost of debt consolidation
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Tuesday, March 1st, 2011
Find ways to get your hands on good debt so that you can acquire assets faster. Most of us would be in agreement that we have or will have only so many years to live on this earth, so the earlier you able start on building your income and net worth, the more time you will have to take pleasure in your wealth and money. Well okay, so you’re maybe having thoughts that I’m crazy and what I’m talking about contradicts it, because in one moment I am stating to stop thinking about debts but in another moment I am saying to go out and acquire more debt. OK, wait, not so fast, your individual personally guaranteed debt was in all probability a surprise to you and it’s going to be your most horrible enemy and keep you awake at night unless you modify your manner of thinking.
There is a gigantic distinction between what I am saying and from debt acquired from consumer activity. Consumers are always surprised by how much they owe on their personal debt, it just slowly creeps up on them, but the wealthy or rich affluent people plan several ways to maintain a financial system to acquire more and more debt so they can buy more and more assets, invest and produce additional new investment opportunities for others and themselves. You can continue to gain more debt to finance the purchase of more investments, or you can sell a stock share of the company behind the investments and use that generated money as financial control to increase the net worth of the company. I am not just talking about conventional, brand named bank lending; I’m talking about selling stock shares in your own controlled privately held company. This is known as a private placement or private equity ownership opportunity. There are so many ways to attain debt; in fact there are more ways to get the same benefits as acquiring debt without ever acquiring debt. Joint ventures are a great example. One of our clients that I know personally recently came to us with about a half a million dollars of debt. We made it noncollectable for him and he then planned his way to purchasing a $700,000 apartment complex without one cent of his own money.
Tags: acquiring debt, build wealth pay off debt, noncollectable debt
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