Judgments may stay on your report

bbIn the credit counseling industry, we hear many different reasons why people got into debt and more importantly, why they are having problems getting out of debt. Issues range from life events such as death or divorce making it difficult to pay bills on time to loss of a job or what seems to be the prevalent of all reasons that is, simply overextending them. One size does not fit all when attempting to get out of debt, but the reality is that there are several options consumers have to resolve the situation. Getting out of debt options are as follows: Taking Care of it on your own: If you can afford it, it is best to always pay more than the minimum balance. When you pay the minimum balance, approximately 92% of the payment is applied to the interest, while 3-4% is applied to other charges. Only 3-5% is actually applied to the principal balance. Always pay the bill on time, as credit card companies are very quick to charge late and over-the-limit fees. If creditors are offering special deals for transferring balances, or lowering interest rates, make sure you read the small print before taking snoozer advantage of the offer.

If you are late on your bill or you are simply trying to reduce interest rates on your own, please be advised that it is sometimes difficult to get a live person on the other end of the line and many times, the solution that you might achieve can be very short term in nature. Whatever deal you get, make sure that they put it in writing, preferably signed by a manager or supervisor. There are two forms of personal bankruptcy.
The disadvantage is that the bankruptcy will appear on your credit report for at least 7 years and you will have to reveal the bankruptcy on any application for credit. You must research bankruptcy attorneys and make sure that you understand the legal aspects of either form of bankruptcy. Keep in mind that since October 2006, the new bankruptcy law has been in place and there are specific stipulations that you must adhere to in order to file. Debt Settlements can sometimes be extremely harmful to your consumer counseling credit illinois service health although there are some instances where a settlement can be to the debtor’s advantage. Some of the negatives include: A notation on your credit report that the debt was paid as settled and not paid in full. Lenders have a tendency to view this as a situation where the debtor was unable or unwilling to pay the debt in full and sends a red flag on any application for credit. Second, for any amount of money you save on the debt totaling over $600, you may be sent a 1099 tax form the following year, as the savings are considered earned income.

Finally, there are a number of debt settlement indexer companies that will take payments from you over a period of time, but not make regular payments toward your debt. Companies such as these are attempting to build up a fund so that they can contact creditors and offer a specific amount based on what is available in it. If your credit has been questionable, this method will make it even worse and it can then be extremely difficult to regain your creditworthiness. While refinancing can work for a number of people and assist in paying off credit card or unsecured debt, there is a danger involved. Some spelunker debtors pay off the debt, but then begin to use the credit cards again, sometimes to the point of maxing out the cards, thus having a much worse situation than when they refinanced. It is advisable to either cut up the cards at the time of the loan or at the least, put a freeze on the cards for a specific period of time.

Advantages include the lower interest rates, waiving of late and over the limit fees and in most cases the re-aging of the consumer credit and debt counseling new york account after three consecutive on time payments.

Be advised that some lenders do consider debt management programs to be a negative. In some cases, the fact that you are in a program may be indicated on your credit report, however, it should be considered a neutral notation. If a lender turns you down for credit, you can ask the debt management company to intercede on your behalf, or you might have to shop for a lender who is educated as to the meaning and advantages of debt management. If you fall late on payments to your creditors, you will be notified of penalties on your next billing cycle. You will also be subject to calls from your creditors, from what they call the in house collections department. If you cannot resolve the consumer counseling credit southwest situation with the in-house collectors, over the course of the next few months, you will then be subject to calls from outside collectors, who will be more aggressive in their pursuit of your payment. Fortunately, when it comes to third party collectors, you do have rights under the Fair Debt Collection Practices Acts. In general, under this act, collectors cannot threaten you in any way, unless they are informing you of their intention to file a suit against you to collect the debt. They cannot threaten to seize your property. They cannot speak to anyone but you, your spouse or your attorney regarding your debt and they cannot threaten you with jail.
Any defroster payment should be made by a certified check or money order and you must hold to this, as many times a collector will drain your checking account and then say that you agreed to it.