Tag Archives: program
Benefits And Drawbacks Of Credit Card Debt Negotiation
Do you think you’re overwhelmed by the level of unsecured debt you have now? There are lots of individuals in an identical situation to yours. For all those people with debt out there, there are many programs available that can help with debts. None turn out to be “great” or “amazing”, they all have their pitfalls and negative aspects. But, out of all the choices, unsecured debt settlement is the one that has the possibility to help the the majority of people.
Here are 5 ideas that you need to give some thought to:
1. You’ll be able to greatly reduce the amount of credit card debt you presently owe with a debt settlement program. They are not permitted to quote a specific amount to you (such as “you can save 75%”), however it is a drastic number. A solid credit card debt settlement company is likely to have prior relationships with creditors and know just how much they could knock off of your debt. I’d personally pick a company who gets paid in relation to the amount of money they can help you save.
2. You don’t need any assets with a debt settlement program. Compared with debt consolidation, you do not need to acquire a loan to blend all your financial obligations together into one payment. An example of this could be acquiring a second on your residence to pay off your debts. You have taken the money you owe and produced an additional debt with this approach.
3. You are able to answer your phone once again! You can forget collection calls. Tired of screening your calls to protect yourself from debt collectors? An experienced debt settlement organization will either halt those phone calls or take them over for you. Not a single thing is more irritating than getting those calls all day long… Some collection agencies do not following the rules and definately will still call. Make sure you advise your specialist of this and follow the necessary steps to stop it.
4. A lot of debt settlement participants usually take 2 or maybe 3 years in order to complete. This is not normally the case with debt consolidation loans, (which can go on for 5+ years). In the debt settlement programs your debt gets cut down tremendously, making it easier so that you can cope with an agreed upon plan you can set up with your counselor that will work for you in your own personal situation.
5. You’ll be able to rest at night knowing that you do have a solid financial plan and you’ll soon be out of debt.
The Drawbacks
Yes, of there are downsides. The first is that your credit score will be affected. Nevertheless, if you are in this much credit card debt, it almost certainly will be anyhow, if it’s not already. Using a debt settlement program this should only be short term. As soon as your plan is in place, it won’t take so long to undo that damage, particularly since you opted to adhere to a program to deal with your debt. It’s not nearly as bad as personal bankruptcy or even a consolidation loan that some banks look at as the same a bankruptcy.
You may need to take a look at tax situation. When you debts get reduced you could be held accountable for “money earned or gifted” to you. However, there are hardship laws in effect so that, fortunately, this has not been a predicament for too many. Check with your counselor concerning this also.
{ You might still get calls from those slimy collectors that will not believe you’re out of debt. Your counselor can also tell you how to deal with them, of course, if necessary, sue them.
|- It’s possible to still get calls coming from irritating creditors, however your counselor is able to explain to you how to deal with them and if necessary you can even take legal action against them to stop the harassing phone calls.
For additional information about credit card debt settlement and corporations that can help you get rid of your credit card debt, just have a look at the links below.
Refinance or Loan Modification
Foreclosure is definitely one of the hardest things anyone has to face. Imagine losing your home, a place your children grew up in, and the place you thought youd have for years to come. The economic situation in the entire country has left families and individuals homeless and others are on the verge of losing it all.
For the families and homeowners who still have time to save their homes, there are two solutions that might just save your home Refinancing and Loan Modification.
The complexity of the foreclosure problem means that there are differences in each loan or mortgage. The circumstances of the delinquent borrower are also factors in deciding which solution is best for you. However not all applicants will get approval for refinancing or loan modification.
Which would be best? There is no exact answer to this question because every mortgage is different so what may be better for your neighbor might not work for you. However, each of these solutions has its own advantages and disadvantages.
Refinancing:
In a refinancing strategy, your old loan is replaced with a new one where terms are changed to one you can handle and pay. For example interest rates can be lowered or payment terms extended from 15 years to 30 years. This is seen by many as a more permanent solution compared to modifications.
While there are various advantages to refinancing mortgages, there are also challenges in the strategy. You have to pay for closing fees to your new lender that can be quite a huge amount for a family already facing foreclosure. Its also difficult to get approval because of a lot of requirements you have to meet. Declining market value for your property, for instance is a major no-no. A property appraisal is required in your application. Underwater mortgages are almost immediately denied. Loss of income is an automatic red flag for your potential lenders as well.
Loan Modification:
Loan modification is more forgiving in that it takes the delinquent lenders hardship into consideration. In some cases, the lender can lower the principal it self to reflect the decreased market value of the property. In negotiating new affordable monthly payments, lenders will consider your living expenses so you can pay your mortgage but still have money to pay your utilities. Loan modification also helps you keep your credit score where it is.
Another advantage is that while processing your loan modification, the foreclosure process is halted and you get another chance to keep your home. In the new government loan mod program, desperate borrowers are counseled by financial experts so they can avoid getting into foreclosures in the future.
There are only a few disadvantages to loan modification. Many of the lenders do not offer the government loan mod program (HAMP) but they have their own in-house strategies. Borrowers can only apply to the program if they can prove their hardship like a loss of family, loss of income, etc. Lastly, the borrower cannot increase the loan and take out equity.