CML1

I listen to a local radio show in Dallas on CBS News Radio 1080 AM that actually goes into these concerns and have done my research on that company and they actually have attorneys and will file lawsuits against creditors if they mess up and do protect their clients. I have also done my research on them and found other companies like them.

I agree with the majority of your post. They are for-profit as is any business. You can not operate a business without any profits. Now as I said before you need to make sure you are working with the correct company. If you read my whole posting I addressed the concerns that you wrote in there such as collection calls, and lawsuits and it is a beware to make sure you are not getting suckered into those companies that are not watching out for your well being.

Consolidating on to a card or loan - This is prety much self explanitory. Pros - No credit affect. Lower interest rate and payment. You would pay it off in a shorter period. Cons - Your using debt to pay off debt. If you close your other accounts it will hurt your credit score. Note -If you have to much debt you may not qualify to do this even if you have a good credit score. Equity Loan - Again this is self explanitory. Pros - Lower interest rate because it is a secured credit and has an asset tied to it. Know around when it will be paid off. Cons - It is tied to your most prized asset. If you default you could loose your house. Loan from 401K - Borrowing from your 401K. Pros - You are taking a loan from yourself. Cons - A lot of people miss out on the reprocutions for doing something like this. What will happen in this unstable economy if you loose your job tomorrow? Well now that "loan" becomes an income and you have to now pay taxes. Note - This is the money you are building up for retirement so in the event you do not pay, they can not go in to grab your retirement. Debt Consolidation - There is a premise for this type of program. These companies will take your debts, lump them up together and work strictly on your interest rates. They will typically adjust your rates about 2 - 3 points then charge you a service fee. So your payments would be about the same as your minimum or around 2.5% of the total enrolled balance. They will make payments for you every single month. Pros - Typically most programs will get you out of debt in 5 years. You will pay less then what you would, if you were paying back the credit card companies. You will not receive creditor calls and your payments would be made every single month. Cons - Most of the programs out there (I am not saying all) will go on your credit as a TPI (Third Party Intervention) and stay on your credit for about 7-10 years. Now TPI is viewed on your credit report as a little brother to bankruptcy. Debt Settlement - This type of program is made for people that are really struggling, about to fall behind, are already behind and keep people out of bankruptcy. This is a process where you pay the company and they hold it in a Savings account that does not bare interest. Once your savings reaches a certain level then they will negotiate with your creditor and get a portion of your debt forgiven. Pros - Your payment will be about 1.4% - 1.9% (Typically your minimums are around 3% of your balance). Get you out of debt in 4 years or less. (If a company is saying more then 5 years then step away from them. This type of program should never be drawn out over 4 and should realistically be done in 3). You save a big portion off of what you owe. Cons - Your credit would be impacted while in the program. You can not finance anything during period of being in the program. Accounts will be closed. You will recieve creditor calls. There is a risk of litigation. Note - Be very careful with choosing these companies go to my other post on here that talks about the concerns you should address when looking at these companies. (It does not talk about any specific company but just concerns you should have in your choosing process). Click on my name and go to that thread though the threads I have created. Bankruptcy - (First off - I am not an attorney nor am I giving legal advice. If you are considering this always consult with an attorney). This should always be the last option that one considers. Most people qualify for the Bankruptcy that only reorganizes the debt. Not the one that dissmisses the debt. I am not going into a lot on this as an attorney should be the one that goes over this with you. Always weigh out all options. If you are able to make more then the minimum payment then the best option is to do this. Pay the minimums on the lowest interest cards and pay as much as you can to the highest interest card. Once the highest interest one is paid off then, go to the next highest one, while keeping the total amount going to the debt the same until all debts are paid off. If there are any other ones, feel free to ask me and we will weigh them together.

I hear over and over again of people going to companies and getting hurt because they were not with the correct company. I will address all of these issues below and what you need to look for. A majority of the debt settlement companies out there are not law firms and do not have attorneys that see your program the whole way through. Many will claim that they are an "attorney based program", in which they pay an attorney to review your application and approve it but that is it, after that there is no attorney representation for you in the event you get sued. This is one of the major questions you need to be concerned with and need to ask. If you get sued depending on your state the creditors will be going after a garnishment of wages, lien on your property or a judgment against you. Next main concern is creditor calls. What you need to realize is these creditors do have the right to call you. Now there are companies out there that will send a seize and desist order to stop the calls. What you need to realize is if you were the creditor calling this person to collect on the debt, and received a seize and desist letter to stop calling and you couldn’t communicate with that person then what would you do? Hmmm… Probably file a lawsuit and take that person to court, so now your back to the first concern. Another concern you need to have is what is reported in your credit report. Would you rather have “settled, settled for less then owed, or paid up less then owedâ€, or “paid to a zero balanceâ€. So if debt settlement is the option that you want to take, then what should you do as these 2 concerns address 99% of the companies out there. Well the solution is look for that 1%. Ask the proper questions. If the question isn’t directly answered with a yes or no then they are probably hiding something. There are companies out there that do operate this industry the right way. I have seen 2 companies that are law firms and they will have an attorney appear in court with you to represent you if you get sued and fight for a debt dismissal. They also monitor your phone calls with you and make sure that the creditors are following the Fair Debt Collections Practices Act (FDCPA) if in violation they would also file a lawsuit against them and get your debts dismissed. They also make sure that it gets reported on your credit report as paid to a zero balance. Additional things they have, is in house negotiators and bankruptcy services. One of them even has the owners of their company working in the office full time and they also have a weekly radio shows on CBS Radio taking live calls especially in their local community and allowing people to come to their office to assist them. Make sure you are doing your do diligence and working with the right company so that you are successful.

Typically 6 months would be a good time to start settling accounts. Their could be a number of reasons why the calls stopped calling. (Selling off debts to a 3rd party company, taking legal action which I doubt at only 90 - 100 days old, etc.) Do you already have the money set aside for the settlements? Are you also negotiating what they report on your credit report? Also when dealing with settlements make sure everything is documented in writing. Also note that some credit card companies will want the money right away. Can be within 5 days or 30 days.