Debt solver programs exist to help people who -- for whatever reason -- find themselves unable to make payments on time. There are many reasons for someone to be unable to pay her debts including job loss, medical expenses and irresponsibility with credit. Debt programs make it possible to get back on track financially. Use a program approved by the United States Department of Justice and check the company's rating with the Better Business Bureau before signing up for its services.
Credit Counseling
Credit counseling services assist you in making a budget. You will discuss your complete financial situation with a counselor. The counselor will help you identify the bills you have to pay, including housing, utilities and food, and any needless spending. Sticking to the budget will help you pay down your unsecured credit and implement a savings plan. The initial consultation can take up to an hour and you are able to make follow-up appointments on an as-needed basis.
Debt Management Plans
If you find that you cannot make payments after developing a budget, your counselor may recommend a debt management plan (DMP). With a DMP, your counselor will look at all of your debts and develop a payment plan with your creditor. You will make monthly payments to the DMP and the company will distribute the money to the creditors. The DMP company may be able to negotiate lower interest rates and removal of late payment fees. It can take up to four years or more to pay your debts and you may be required to cease using your credit accounts and not open any other lines of credit.
Debt Negotiation
Debt negotiation companies negotiate with creditors in an attempt to decrease the amount you owe. You make regular payments to the debt negotiating company while the company negotiates a settlement. The company will not make any payments to your creditors until you reach an agreement and then they will make a lump sum payment to your creditor from your account.
Warnings
By law, creditors must report late payments to credit bureaus. They do not have to work with you on your debt. Late payments, settlements and charge-offs will negatively affect your ability to receive credit in the future. The Internal Revenue Service can tax non-paid debt over $600 per creditor as income. Some consumers have discovered that the companies they are working with have not made any payments to their creditors and that they still owe the full amount plus late fees and interest. While many of these companies are non-profit, they may still charge you to establish an account, monthly maintenance fees and a percentage of the amount the company saves you. The company you hire may drop you as a client if your creditor sues you while in its program.
0 comments:
Post a Comment