Perhaps you’re unable to sleep at night, or you’ve got a sick feeling in the pit of your stomach – all because of accumulated debt, interest and late fees owed to your creditors. If this is indeed the case it’s time to find a solution to put an end to the uneasiness you’re experiencing due to your finances.

You’ve probably scoured the Internet and various other sources of information looking for a solution, and have heard about debt settlement as a possible solution to your current financial predicament. As you very well may know, this type of debt relief has many critics, and the available information regarding debt settlement is extremely confusing, as well as misleading.

Obviously, one of the main factors and/or concerns people seriously contemplate when considering debt settlement is the affect it may have on their credit score. Debt settlement can have a negative impact on your credit score if you should decide to go this route toward debt relief while your various credit card accounts are still “current.” If, however, your accounts have entered a stage of delinquency, the only direction your credit score can go is up, and the end result will be the reflection of zero balances on your credit report and, subsequently an increased credit score.

Perhaps your accounts are all current, and you’re considering debt settlement because you’re struggling each month to make ends meet. Worse yet, you may find yourself borrowing from one creditor to pay another. If this is a scenario to which you can easily relate, you may want to reconsider just how significant your credit score really is – or should be.

Having an acceptable credit score brings peace of mind to many people, but if you’re buried in debt that peace of mind is erased by sleepless nights trying to figure out how you’ll be paying your monthly bills. While it is a requirement of creditors to only settle those accounts that are delinquent, please keep in mind that your delinquency is only temporary, and oftentimes so is the reduced credit score you may be facing.

So, if you believe that you can trade what may be considered a decent credit score for financial stability and a temporary less-than-perfect credit score, debt settlement may be an option worth looking into. If you’d like to learn more about the process of debt settlement, click here.

Are you looking to consolidate credit card or other debt? Do you have bad credit history? There are many options available online nowadays to help you consolidate your debt. Whether you are wanting to consolidate credit card debt or other kinds of debt, it can be overwhelming searching online to find the best ones for your situation. Here is a short overview of what kind of debt services are available online.

If you are looking for a loan to consolidate your debt, you will need to qualify for the loan, just like any other loan. If you have a home, you may be able to get an equity loan using your equity or even go over the appraised value of your home in order to get the financing you need.

You may be able to qualify for an unsecured loan, which can consolidate your debt with one low monthly payment with no ties to any of your assets.

There are other companies that will help you manage your debt without having to use another loan. These companies usually charge you a fee and then help negotiate lower interest rates with your creditors and manage your monthly payments. There are various ways to do this and every company is different. Usually these techniques will save you money to start paying down the principle on your credit balances.

Some of these companies are definitely worth the small monthly fee, and can save you much more than they charge. But, some of these companies are not legitimate and can take your monthly payments and keep them for a month or more before they make your payments (collecting interest on the money all the while), causing you to accrue late fees and possibly collections. These companies can actually cost you money and make your situation worse.

Be careful when searching for debt consolidation companies to work with. Make sure they are legitimate, long standing companies before you sign on the dotted line. To see our list of recommended debt consolidation lenders click on the link below.

Consolidating your debt can provide great relief and breathing room when it comes time to pay your bills. Sometimes, when you are up to the hilt in debt, it can be so overwhelming just keeping up with your bills that it can be difficult to think about ways to start paying the debt down.

To see our list of recommended debt consolidation service companies, visit this page:
Recommended Bad Credit Debt Consolidation Services and Lenders.

What are Debt Settlement Programs?

Debt settlement Programs (a.k.a Debt Negotiation or Debt Reduction Programs) are debt relief programs that help you negotiate with your creditors to significantly reduce your overall unsecured debt (includes the original debt amount + interest charges and late fees). In layman’s terms, experienced negotiators help you alleviate your debt and pay up only a small portion of your total debt by identifying the best debt settlement program that suits your needs. Most debt companies can reduce your debt from 22% – 55% of your total debt. This allows you to settle your debt much more quickly. This kind of program is perfect for those who want to eliminate their debt in a couple of months.

Most debt settlement companies charge a client 9% – 14% of their total debt.
How does it work?

Step # 1
Decrease your Main Debt amount
Most debt settlement programs start by negotiating your main debt amount. On the average, the main debt amount is decreased by 35 % to 50 %.

Step # 2
Decrease Late fee charges
One of the reasons why debts increase to unmanageable amounts is the accumulation of late fees. In some cases, late fees can be more than the main debt amount. Most Debt Settlement programs work to remove the majority, if not all, of your late fees.

Step # 3
Decrease the APR (Annual Percentage Rate)
Just like late fee charges, the APR can also accumulate and add a whopping amount to your outstanding debt. Agencies negotiate to decrease this fee to a much affordable amount.

Step # 4
Pay the Monthly Settlements
Once your agency has settled the reduction of your total debt you must then make sure that you pay your settlements regularly. Keep in mind that your agency worked hard in reducing your debt to a manageable amount. Missing any payment might cause you more problems than what you had to begin with. The amount you have to settle is based on your current financial situation.

TIME FRAME
In most cases, the debt settlement process takes around 4-8 months. This timeframe, however, is not a strict rule. It can be reduced or stretched depending on the client’s request and capability of settling their account. It is not uncommon to hear that a normal credit card debt settlement can last up to 4 years or sometimes even more.

Why make use of debt settlement services?
Many countries all over the world are slowly waking up to the dangers of paying liberally through their credit cards. In many cases, even students right out of college are accruing debts that seem monumental. Bad debts can seriously affect your creditworthiness, making it almost impossible for you to get loans when you really need it. By availing of the services of a debt settlement agency, you can work out the easiest way to pay off your loans.

One of the best ways to get in touch with the best debt settlement companies is through online services that will give you access to a nationwide network of qualified debt relief providers. These services search the ongoing trends in the debt relief market and give you the best solution based on your unique financial needs. They do not require you to provide them with any secure or sensitive information. In most cases, you will get comprehensive data just by entering your debt amount, state and pin code into their search engines. With services such as these, debt settlement has never been easier.

If you’re thinking about using a debt consolidation or debt settlement service to help you get out of debt faster and save money on your monthly payments, make sure you do your homework before choosing a company. There are definitely shams and scams out there.

First let me say that debt consolidation is *not* the same as debt settlement/negotiation, which most people don’t realize.

Debt settlement companies charge hundreds of dollars as an initial “admin fee” to set up your account, plus a monthly service fee. The fees vary depending on the company and the amount of your debts.

Such companies take your money every month, but don’t make monthly payments to your creditors! Instead, they put it in a trust account, negotiate your debts with your creditors, then make a lump-sum payment when there’s enough in your account to pay a creditor in full.

That can take *years* depending on the amount of debt you have with each creditor. Meanwhile, you can be sued by your creditors and your wages can be garnished! (Or just don’t make payments to your creditors. You’ll end up in the same spot without paying someone to help you get there!)

Settlement companies don’t ask your creditors to stop all interest, late fees and overlimit fees from accruing. That means while the negotiations are ongoing, your bills will continue to grow! So if you’re sued and a judgement is brought against you, you’ll owe more money than before!

And shoddy companies, which there are alot of, don’t tell you *any* of this up front. I call it “getting permission by omission” because they simply don’t tell you how their program works *before* you sign an agreement with them. Or after, for that matter. But if you ask the right questions, eventually you’ll figure it out. (Or when the crap hits the fan. Whichever comes first.)

Let me give you an example of how debt settlement works.

Let’s say you have $20,000 in unsecured credit card debt. You owe $10,000 to one credit card company, $6,000 to another and $4,000 to a third. You agree to a 5 year plan where you pay $250 a month to the settlement company. (After all, $250 a month for 60 months is only $15,000, so you’re saving $5,000 and you’ll be debt-free in 5 years, right?)

The admin fee will cost you $750. Your first 3 monthly payments go towards that and nothing gets put into your trust account until your 4th month.

The settlement company keeps $50 of your $250 payment each month for the service fee. That means $200 a month is being added to your trust account.

Most debt settlement companies claim to be able to negotiate your debt for about 50% of what you owe. So let’s use the lowest credit card debt as an example.

If you owe $4,000 and your creditor agrees to accept $2,000 as payment in full, it will take 10 months at $200 per month to have enough in your trust account to pay off just that one credit card.

But remember, your first 3 payments to the settlement company only paid the admin fee. That means your first credit card settlement is 14 months *after* you started sending them money.

So what’s the problem? It’s simple. Your creditor won’t agree to accept half of your actual debt unless, or until, it can be paid in full. Otherwise, you’re expected to make your normal monthly payments.

Since you don’t have $2,000 in your trust account, and you won’t have it until more than a year after you stopped paying your creditor directly, they’ll probably take you to court and request that your wages be garnished long before you have that $2,000 built up.

And what about your other creditors? Well, they’ll be waiting even longer to get their money from the settlement company. The $6,000 debt will take 15 *more* months to pay off, assuming your creditor waits that long and agrees to 50%. And that $10,000 bill? You do the math.

On the other hand, if you signed up for a 3 year plan with the settlement company, your debts would be paid off sooner. But, the question is, will your creditors wait that long? Probably not.

The facts are, you can negotiate with your creditors yourself. Most will agree to take a smaller monthly payment from you and stop all interest and fees from accruing. And, of course, you’ll save thousands of dollars in fees to a settlement company.

Before signing up for any service, please be sure you check out the company thoroughly. And don’t let the words “non-profit” fool you either. Alot of debt settlement companies claim to be non-profit.

Going back to the example above, if you pay them $15,000 over a 5 year time frame and they settle your debts at half of what you owed, they’ll make $5,000 from you. I’d call that a profit, especially since they might not have actually helped you in any way.

Most companies will allow you to cancel your account and get a refund of what you’ve paid, less the non-refundable admin fee and the monthly service fees. If you feel you’ve been mislead about their program, don’t hesitate to argue til the cows come home. File a complaint with the Better Business Bureau or hire an attorney if you feel you’re getting nowhere.

You can visit the Better Business Bureau’s website ( http://www.bbb.org ) and find reports on hundreds of companies. Here’s a small listing of companies that have poor reputations with the BBB:

National Consumer Debt Council LLC – Irvine, CA (A.K.A. NCDC, United Consumer Law Group)

Financial Rescue Services – Burbank, CA

Debt Legal Services – Anaheim, CA

American Debt Relief – Los Angeles, CA (A.K.A. A M Debt, American Debts Relief, Debt Relief)

Please be very cautious when choosing a debt help company and ask lots of questions before agreeing to anything. If you find they’re evading your questions, run fast and run far. There are reputable companies out there, so keep looking until you find one.

Many people nowadays suffer from bad credit and debt because of poor spending and money management habits. A solution to the debt problem is to consider debt consolidation services to help erase the debt and to repair credit. When your credit problem first started, you may be fooled into thinking that it is just a bit of debt, and that you would be able to handle it. However, all too often, debt quickly piles up to the point that you see no way out of your credit mess, as late fees and interest rates quickly mount. That is why debt consolidation is an attractive option because it eliminates stressful payments and helps get you out of debt and on your feet as quickly as possible.

Falling into debt can be a very traumatic and stressful experience for anyone, so it helps that there are useful resources that provide good advice, and help you deal effectively with your debt problem. That is exactly the purpose of debt consolidation, an excellent resource designed to help you manage and slash your debt when you can’t seem to manage it on your own.

When you turn to a professional debt counselor to repair your credit, you will need to show them all of your debt information, such as your minimum monthly payments, and the number of credit cards you hold etc.

Once you have engaged the services of a debt consolidation service, you no longer need to make payments to your creditors, and instead you can make lower payments against your outstanding balance to the debt consolidation firm and get out of debt more quickly.

Debt has become so pervasive nowadays with so many people managing their credit so poorly, that debt consolidation companies are springing up everywhere. So before settling on a debt repair firm, make sure to research and locate reputable debt consolidation companies before entrusting them with your information. Research the debt consolidation company’s history, reputation, policy and credit repair plan.

Getting out of debt is not very easy. Good debt consolidation companies can help you with your credit repair to a certain extent, but they cannot totally erase all the past blemishes in your credit report. Even though your bad credit remains on your credit report for a couple of years, your debt counseling agency may still be able to help you get approval for credit once you have proven your effort and determination in repairing your credit through consistent and timely payments.