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Understanding Debt Consolidation Loans

admin — Mon, 14 May 2012 06:34:28 +0000

There are many pros and cons to debt consolidation loans, and anyone who’s in debt and considering this course of action should understand the possible risks and benefits. When you consolidate your debt, you are taking out another, single loan to pay off your other debts (of which there are usually several). In doing so, you’re consolidating the money you owe into larger but easier-to-manage payment. Debt consolidation loans are sometimes recommended for individuals who have fallen into debt with several credit cards and high interest installment loans (including student loans, car loans, etc.). The issue with multiple sources of debt is not only the inability to make payments, but also the difficulty keeping up with each payment, as payment dates and minimums usually different from one to the other. Consolidating one’s loans means an individual will only have a single payment to make each month. Understandably, this makes it much easier to stay on top of the payment.

Keep in mind that there are some cons to debt consolidation loans as well, and for some people, a debt consolidation loan may not be the best answer. One of the main issues people face is that it can be difficult to find a fair interest rate. It probably wouldn’t make much sense to consolidate your debt if the rate on your new loan is no better than the rates on your current loans. In addition, consolidating loans can also take longer to pay the debts off. Realize that when you consolidate debt, you will still end up owing the same amount of money that you did before. The difference here is the length of repayment. If the term is long, some people may end up paying more in interest with debt consolidation loans.

In regards to whether or not a debt consolidation loan is right for you, it really depends on the current state of your finances. This is different for everyone. You have the option to educate yourself and try to negotiate a debt consolidation loan yourself, but many people find that it’s beneficial to let a financial professional from a BBB accredited debt settlement company help them get a grasp of their complete financial situation and understand what a debt consolidation loan would mean for them.

Tags: debt consolidation loans

*** This is an open blog. The contents of which do not necessarily represent the opinions and the policies of our company. If you’d like to share a blog post with us you can email us about your debt experience and we’ll post the blog for you.

Understanding a Loan Modification

admin — Mon, 14 May 2012 06:33:44 +0000

Whether you want to call it a loan modification, restructuring, mortgage modification, or workout plan, you’re usually referring to the same thing. Modifying a mortgage is when a borrower is facing great financial hardship, is struggling to make his or her mortgage payments on time or at all, and works with his or her lender to modify or change the terms of the mortgage loan. These changes may be permanent or temporary, and they can affect the mortgage rate, monthly payment, and amount of time on the loan. The goal with loan modifications is to reduce the homeowner’s monthly mortgage payments to about a third of his or her gross income.

Not everyone is eligible for a loan modification. In order to qualify, you must meet certain requirements, and these requirements can vary. In general, though, borrowers may qualify if they are having difficulty staying current on their mortgage payments, their income is not sufficient to cover their mortgage payments in addition to necessary living expenses, and they are at risk of default. In general, borrowers must also occupy the house as the primary residence (no speculators), mortgage payments must exceed 31% of the borrower’s monthly gross income, and the loan does not exceed current loan limits as set in place by Fannie Mae and Freddie Mac.

If you think you qualify for a loan modification and you are ready to start the process, you have the option of negotiating the loan modification on your own. Working with a BBB accredited debt settlement company with experience dealing with loan modifications and other mortgage-debt-related issues, however, has many advantages. If you plan to contact a debt settlement company for help, gather together any income documentation such as pay stubs, recent income tax returns, all your mortgage documentation, and any documentation and information you have on other debts such as a car loan, student loans, and credit card debts. A debt relief expert may be able to help you determine whether or not you qualify for a loan modification, and he or she will then be able to guide you through the mortgage modification process in order to get you get the best and the timeliest results for your situation.

Tags: loan modification

Avoid or Stop Foreclosure: Get Foreclosure Help from The Debt Relief Network

admin — Mon, 14 May 2012 06:32:45 +0000

In the last few years, millions of homeowners have lost their homes to foreclosure. If you are a homeowner and you are struggling to pay your mortgage, you have the option to get foreclosure help by educating yourself about the process and about your options. Take some time to learn about some of the steps you can take to stop foreclosure or avoid it altogether. You should start by first understanding the possible reasons behind a pending foreclosure (aside from knowingly participating in mortgage fraud). Many homeowners are forced to stop making timely mortgage payments due to sudden and extenuating circumstances, including the following:

Sudden job loss or unexpected unemployment
Medical emergencies
Divorce or loss of a second income
Additional unmanageable debts
Death in the family
Major emergency home maintenance expenses
Inability to continue paying an adjustable interest rate that has increased

If you find yourself suddenly unable to make your monthly mortgage payments, do not panic. A great way to avoid foreclosure is to take steps to prevent your lender from filing a Notice of Default, which is a public notice that states that the borrower is in default. Many individuals find that it’s most beneficial to get foreclosure help at the first sign of trouble with their mortgage payments. A good first course of action is to decide whether you want to negotiate your debts yourself, or work with a BBB accredited debt settlement company. Many debt settlement companies have experience helping homeowners prevent or stop foreclosure. Qualified experts can clearly explain the options and guide homeowners toward avoiding or stopping foreclosure. Ways to avoid foreclosure may include getting extra time to make payments, getting your lender to forgive a payment or two, changing the terms of your loan, and more. Even if their lender filed a Notice of Default and their options were much more limited, many people found help in working with a debt settlement company, whose experts were still be able to negotiate with their lender while providing them with guidance and options in their attempts to stop foreclosure on their home.

Tags: foreclosure help, stop foreclosure

Tax Debt Help: Know your Tax Relief Options

admin — Mon, 14 May 2012 06:31:15 +0000

Problems with tax debt can be extremely stressful and difficult to deal with, and the longer you wait to get tax relief, the worse the debt can become. It’s important to start seeking a tax solution as soon as you find yourself facing problems with back-tax debt. Everyone has the option to try and negotiate their debts on their own, but working with a BBB accredited debt settlement company has its advantages, particularly if the problem has already become more than the individual can handle on his or her own. Some tax solutions may include the following:

Prevention or Release of Liens, Levies, and Garnishments: If you don’t already have a lien, levy, or wage garnishment, an accredited tax relief company can help explain how to ensure that you don’t get one. If you do already have a lien, levy, or garnishment, a debt relief agent may be able to take the necessary steps to release it.
Installment Agreements: An installment agreement is a tax solution that allows you to make monthly payments if you’re not able to pay back your tax debt immediately due to your financial limitations.
Currently Non-Collectable: Some people do not have the extra income to pay off their tax debt. If you need your entire payment to cover essential living expenses, your debt may be classified as non-collectable. If this is the case, the IRS may provide tax relief by suspending your payments for a period of time while you get back on your feet and provide for your family’s needs.
Penalty Abatement: Interest and penalties can build on the amount you owe. These penalties can add up and cause an otherwise manageable debt to get out of control. Penalty Abatement programs may allow you to have your tax penalty reduced or possibly removed, provided you have a good reason (and proof) as to why you failed to file your return or pay the amount due.

There are a number of eligibility requirements needed in order to qualify for each tax solution, and while you have the option to negotiate your debts yourself, working with a BBB accredited tax relief company can be beneficial, and it can help you determine which tax relief solution is best for your situation.

Tags: tax solution, tax relief

What’s the Difference Between Debt Settlement and Credit Consolidation?

admin — Mon, 14 May 2012 06:29:23 +0000

Many debt relief companies provide both credit consolidation programs and debt settlement services. Both can be effective and beneficial ways to reduce your debt and to establish good spending and saving habits for your future financial health, but what is the difference between these two programs, and how do you know which one is right for you? Read below to learn more about your options.

Credit Consolidation

Also referred to as debt management or consumer credit counseling, credit consolidation is a way to receive financial education so that you can better track and manage your personal finances. In addition to providing credit counseling services, many debt relief agencies can assist you with debt management plans, which involve negotiating repayment plans and securing lower interest rates and lower minimum payments to your creditors. After credit consolidation, debts are not settled for a lesser amount than what you owe.

Debt Settlement

Debt settlement, on the other hand, is a savings program that usually involves negotiations with your lender to get a reduced balance. The goal is to have the accounts being reported as settled for less than the originally agreed upon balance. During the process, your budget and financial circumstances will be examined, for the purpose of creating a savings program that you can afford. Each month, you will deposit money from your personal checking account into your debt settlement account. At the onset of this process, you stop paying your lenders in order to have more leverage in negotiations. Unlike with credit counseling, this course of action can affect your credit, but the end result for many customers is that they get out of debt under a structured plan once they have enough money to pay off the debt as well as the debt relief agent’s fee. Often, people find that they ultimately saved money under the settlement plan. Debt settlement plans and credit and are sometimes recommended for those individuals who are unable to afford their credit card bills. As with credit consolidation, people have the option to negotiate their debts themselves, but many people have found an advantage is working with a BBB accredited debt settlement company in this effort.

Tags: debt settlement, credit consolidation

Debt Relief Help: Is Debt Consolidation Right for You?

admin — Mon, 14 May 2012 06:28:23 +0000

If you’re like millions of Americans, you may at some point find yourself having trouble keeping up with your many bills and payments. Unsecured debts such as credit card debts, personal loans, and medical debt can add up quickly. Debt relief can be a real priority for the sake of your financial freedom. If you’re in need of debt management help, debt consolidation may be an option for paying off your bills and paving the way for a more stable financial future. The process is fairly straightforward: it involves combining your debts into one larger loan, making more convenient to keep track of and pay back.

Debt consolidation can mean different things for different situations. It may come in the form of a loan, debt settlement, a debt management plan, or some other form of relief for unsecured debt. Each plan will have different benefits and features that pertain to different situations. One form of debt relief is a consolidation loan. A debt consolidation loan allows you to pay off all your existing bills at once by making a single monthly payment to a new lender. A debt management plan, on the other hand, helps you to pay off unsecured debts in full, often in less than five years. Debt management plans involve consolidating debts into one monthly payment, often saving you additional money in both interest and repayment terms. Finally, a debt settlement plan allows you to take advantage of a debt relief expert, who will act as sort of a negotiator between you and your creditors. Instead of making monthly payments to your creditors as you normally would, you will make a more affordable monthly deposit into a settlement savings account. Many customers have enjoyed much-needed debt relief after going through with a debt settlement plan.

Debt consolidation should be considered as a possibility when you have unsecured outstanding balances, you are behind on payments, you are unable to pay your bills, and you are considering filing for bankruptcy. There are many benefits that come with consolidating your debts, but there are potential downfalls as well, particularly the prolonged period of repayment and the risks you face if you miss a payment. People can try to negotiate their own debts, but working with a BBB accredited debt relief company has many advantages, and contacting one can be a great first step towards learning if debt consolidation is the right option for you.

Tags: debt relief, debt consolidation

Get Lower Mortgage Rates with Loan Modification

admin — Mon, 14 May 2012 06:27:33 +0000

Many people are familiar with some of the benefits of refinancing a home mortgage. But many homeowners don’t consider how a loan modification might lower mortgage rates and make payments easier to manage each month. At first glance, refinancing a home mortgage might seem like a good idea, as it can help homeowners reduce their monthly mortgage payments or move from an adjustable-rate mortgage to a fixed-rate mortgage. There are other advantages as well, but as with anything else, there are some negative consequences to refinancing, and it does not always go smoothly. For example, homeowners should be aware that the lender places a lien on a home at the same time that he lends the homeowner a certain amount of money. In the worst case scenario, the home can be seized if the homeowner falls behind on payments.

If you’re like many, your home is your most valuable financial asset. Instead of taking such a risk by refinancing, many people consider how modifying a loan can possibly lead to lower mortgage rates. Homeowners who are interested in lowering their lower mortgage rates have the option to pursue this option on their own, but contacting a BBB accredited debt relief company that has experience dealing with debt relief issues in the real estate realm can have many advantages. An expert will likely tell homeowners that in order for the lender to approve a modification, it’s necessary to provide the lender with proof that you are dealing with financial hardships. This usually includes bank statements, a written letter explaining the reasons behind your financial struggle with your mortgage, and a detailed budget that outlines both your income and your monthly expenses. Many people may feel uncomfortable at this notion, but by not taking action, homeowners can potentially face even bigger problems with their lenders down the road. The forms must be filled in, signed, and sent to the lender. If the loan modification is approved, your mortgage rates will lower.

If you are considering refinancing, you have the option to speak with a debt relief expert from a BBB accredited debt settlement company to learn more about the possible consequences of refinancing, and how you might be able to restructure or modify your loan instead in order to possibly get lower mortgage rates that fit into your budget.

Tags: lower mortgage rates, modification

Get Expert Help with Tax Resolution

admin — Mon, 14 May 2012 06:26:36 +0000

The phrase tax resolution usually refers to the process of negotiating a taxpayer’s back-tax debt down to a level that’s both acceptable to the IRS and affordable for the taxpayer. More specifically, the taxpayer and the government reach an agreement or tax settlement, and the taxpayer agrees to pay his or her tax debts in part or in full using one of the IRS’s tax resolution programs. The IRS offers several programs that cater to different financial situations and circumstances.

Back-tax debt can build from years of not filing one’s tax returns, and over time this debt can reach into to the tens of thousands of dollars. It can also result when people keep adding to an ongoing installment plan that is set up to pay the government back at a slow pace. When taxpayers find themselves in need of a tax settlement solution, many will attempt to negotiate with the IRS on their own, rather than reaching out to companies that specialize in tax resolution. The potential issue with attempting this on your own is that many taxpayers are unaware of the various tax laws that can help during negotiations. The IRS will often use any and all applicable tax laws and statutes to get indebted taxpayers to pay back as much of their debt as possible. Additionally, dealing with the IRS can leave many people intimidated very quickly, and the IRS will sometimes use this hesitation to their advantage.

On the other hand, debt relief companies that specialize in tax settlement have made it their job to know the tax laws, and they have the proper experience in dealing and negotiating with the IRS. Tax resolution professionals deal with many cases each tax year, and they know how to test the boundaries of what an IRS professional will accept as a settlement, helping you achieve a fair resolution in the end. If you have found yourself overwhelmed by back-tax debt, you do have the option to attempt tax resolution on your own, but many people have discovered the advantages of working with a BBB accredited debt settlement and tax settlement company, and have enjoyed ending up with a settlement that is fair to the IRS and also favorable to them.

Tags: tax settlement, tax resolution

Bankruptcy as a Tool in Foreclosure Defense

admin — Mon, 14 May 2012 06:25:37 +0000

Bankruptcy as a debt relief option should not be considered lightly, but it can be used as a powerful tool in foreclosure defense. When homeowners are unable to keep up with high mortgage payments, mortgage lenders can use the foreclosure process against the indebted homeowner. When facing foreclosure, many homeowners make the mistake of contacting their lender first. Often, lenders will threaten the homeowner with swift foreclosure, causing the homeowner to panic and to either not take action or to agree to a workout solution they do not understand or cannot afford.

As a first step, instead of contacting the lender, many homeowners are learning the advantages of working with a BBB accredited debt settlement company whose network includes foreclosure defense attorneys, as only an attorney can determine whether or not you truly qualify for bankruptcy. The attorney you speak with will likely be experienced in such areas as mortgage and real estate law, as well as bankruptcy laws.

Homeowners who have been sued for foreclosure or who are about to be sued should take advantage of such a debt relief network immediately. In some situations, the bankruptcy process might possibly stop foreclosure, as bankruptcy law is a federal law that supersedes a state foreclosure lawsuit. It might also possibly postpone or prevent the homeowner from being evicted from the home. Homeowners must realize, however, that bankruptcy is a drastic option that has major consequences and effects on your financial future. It might be a viable option, though, particularly for those who have large assets (such as a house) to protect.

Both the foreclosure and the bankruptcy processes are complicated and exhaustive. Bankruptcy is not always a possible solution, nor is it always the best one, so homeowners must be proactive about educating themselves. Homeowners can try negotiating this process on their own, but working with a BBB accredited debt relief company with experience in foreclosure defense has many advantages.

Tags: bankruptcy, foreclosure defense, mortgage

Credit Repair: Improving your Credit Score with Debt Management

admin — Mon, 14 May 2012 06:20:18 +0000

Bad credit can restrict you in many major aspects of your life. If your financial health has been damaged by unmanageable debt, it’s important to get help with debt management immediately and begin implementing credit repair strategies. Financial health can be salvaged over time by learning to manage your debts and by adhering to a strict plan and budget. Over time, your financial future can be brought back on track.

Getting out of debt is one of the best things you can do for your financial health and future. You should begin by learning about your various debt relief options, which include the following:

Debt Settlement: This is a savings program for those who can’t afford to pay their credit card bills. An affordable debt management savings program is created, and the individual makes payments to a debt settlement savings account each month. This is also a great way to establish good budgeting habits, in the form of paying bills and saving money each month.
Credit Consolidation: This is also commonly referred to as debt management or consumer credit counseling. It involves clients getting lower interest rates and applying larger payment portions to the principle balance.
Bankruptcy: This option may seem at first glance to be a devastating last resort, but it can be the best–and only–option for certain situations. For those individuals who are looking to get out of debt but are unable to make monthly payments or who have large assets that need protecting, it’s recommended to discuss bankruptcy with a BBB accredited debt settlement company.

All these options can have vastly different effects on your financial health and can pose varying difficulties to a credit repair strategy. You can try and navigate your options on your own, but many people will find great benefit in getting help from a BBB accredited debt settlement company who can explain each of these options in full detail and make recommendations based on their individual financial needs.

Tags: credit repair, debt management