Why Are Debt Reduction Firms Being Sued?
There are a lot of television, radio, billboard and internet advertisements from debt reduction companies. Many of these ads claim that they can help consumers in debt achieve settlements from their creditors, such as: “fifty cents on the dollar”; “50 to 60 percent” of consumers’ total unsecured debt;
reduced interest rates.
Services like these match consumers up with various debt reduction companies. When shopping around for debt reduction assistance, consumers should always get answers to the following questions:
all fees and costs they charge;
when and how you will pay the fees and costs;
the approximate time period before settlements will be achieved;
whether your balances may increase before settlements for all accounts are achieved.
If a company wants to charge a fee to provide information about their services, it is likely a scam. Consumers can get a no obligation quote by using a matching service. To help protect consumers, the Federal Trade Commission (FTC) has been aggressively filing lawsuits and punishing debt reduction companies that make false claims. Never hesitate to file a complaint with your state attorney general, the Better Business Bureau and the FTC about a debt help company that is not meeting your expectations.
Florida Attorney General Bill McCollum said October 19, 2009 he filed two lawsuits against five debt settlement-related companies. McCollum’s office claimed that these companies promised to help consumers pay off their debts at significant savings, but failed to clearly disclose the full cost of their services.
For example, part of the claim is that the debt-help companies did not disclose that the first three months of payments collected were done as fees before any funds start accumulating for settlements and before any services began, which is in violation of Florida law. During that timeframe, customers were advised to stop all payments and communication with creditors. This likely resulted in more financial distress and caused an increase in penalties and lawsuits against the customer.
Alternative To Bankruptcy
If you are seeking debt settlement services try a company which matches customers up with debt specialists. To qualify, you must have at least $5,000 in unsecured debt. Loans that are tied to collateral like car loans and mortgages do not qualify, but you can include:
credit cards;
store cards;
medical bills;
phone bills;
More Lawsuits
A second Florida suit claims that a debt settlement company charges exorbitant fees upfront before completing or even starting services. The company offers consumers the opportunity to settle debts for about fifty percent of their balance within three years. Under their debt plan, according to McCollum, customers were told to stop paying their creditors and to open a bank savings account that would accumulate enough money to allow the debt-help company negotiate a lump-sum payoff of the debt. However, the debt settlement firm supposedly removed 85 percent of the money over the first three months to pay its own fees, leaving little or no money behind for the consumer to negotiate their debt.
Contact a reputable company to get a quote about debt consolidation. This is an alternative to filing bankruptcy. Whatever debt-help service you may choose to work with, always protect yourself and be sure to search the internet and your state attorney general website for complaints.
Nathan Randall, editor, DailyDollar Newsletter provides free daily advice on money matters plus coupons and discount codes. FYI…you can now access the DailyDollar Newsletter via iTunes podcast, YouTube video, and on Facebook and Twitter too.
Will Debt Consolidation Solve Your Debt Problems
You’ve dug yourself into quite a hole with several thousand dollars of debt on 5 or 10 different high interest rate credit cards. Your credit score is very poor due to all the debt you’ve accumulated and the missed payments that have ensued. Given the scenario, you may think that you have a long road ahead of you before you’ll get out of debt, and that’s definitely true. You might be thinking about debt consolidation and whether or not it’s even possible with poor credit. You’ll find out about it.
What is Debt Consolidation?
If you’ve only heard of debt consolidation, but don’t know what exactly it is, it’s time to learn. In simple terms, debt consolidation is a technique of paying off debt in which the person who is in debt takes out one large loan to pay off all other loans. The newer, bigger loan is typically a much more secure loan featuring a cheaper interest rate and cheaper monthly payments than the individual loans would have. As a result, hundreds of dollars can be saved every month when using debt consolidation as opposed to paying loans off individually.
But Can a Person with Poor Credit Get Debt Consolidation?
Since debt consolidation features lower interest rates, it naturally relies on the credit score of the individual. It’s easy to see why many with poor credit think they will not qualify for a debt consolidation loan of any kind. The thing is, everyone can qualify for a loan, regardless of their credit score, as there is always at least one lender who will loan the money. So if you have poor credit, yes, you can get a debt consolidation loan.
How to Get Debt Consolidation with Poor Credit
Unfortunately, getting debt consolidation with poor credit is not as easy as getting it with good credit, so you’re going to have to do a bit of searching around to find debt consolidation loans. You can try looking online for lenders by using Google or any other search engine and typing in terms like “debt consolidation with poor credit” or “debt consolidation poor credit”.
Once you find a few lenders offering debt consolidation for those with poor credit, take some more time to research each of them. Make sure they’re legitimate and aren’t in trouble with Better Business Bureau or any credit agencies. To do this, simply type in the name of the lender followed by the term “review” and you should find a ton of information.
You should keep in mind that because you have poor credit, you’ll usually have a higher interest rate for the debt consolidation; however, it will still be lower than the credit card interest rates themselves, so you’ll still end up saving money.
Corey Landis writes on the subjects of debt solutions and refinancing a mortgage. Her hobbies include gardening, swimming and cooking.
Debt Consolidation : Things You Should Know Before Jumping On The Bandwagon
Debt consolidation provides an ideal solution for individuals with debts from multiple companies at the same time. Instead of paying multiple companies every month, the individual only pays one company. Debt consolidation practically pays off all other loans so that the debtor only has to deal with the debt consolidator in paying the remaining balance of their loan.
At first glance, debt consolidation could be a great solution for everyone who needs to pay off multiple loans at the same time. But this type of financial service is not for everyone since there are some conditions that could easily worsen the situation. Instead of gaining some financial advantage through debt consolidation, the debtors end up losing more than they should.
Lower Interest Rate
One of the main reasons why debtors consider debt consolidation is the lower interest rate. Because the debtor combines the loan, it is possible that the total debt could be very high and a higher interest rate only worsens their payment plan. With a lower interest rate, the debtor can easily handle the payment with easier payment schemes and paying off the principal amount becomes a lot easier. Many debt consolidation companies offer fixed interest rate so that the debtor will not have to think of anything else except for their basic payment every month.
Penalties from Old Loans
Combining the loans helps the debtor limit the paper work as well as save time since the debtor does not have to visit different lenders every month. But debt consolidation could come at a very high price since some lenders are not in favor of early payment. Some loans come with an early payment penalty which puts a very high price for those who want to go on debt consolidation. Since debt consolidation pays off all other loans including the early payment penalty, it is possible that the debtor ends up with a higher principal with the debt consolidator.
Checking the terms and conditions especially the penalties of the old loan is a must for every debtor who wants to go into debt consolidation. There are times that the penalty is manageable while it is possible that the loan will be higher than anticipated simply because of the massive penalties.
Longer Payment Terms
To help debtors easily pay-off their loan, debt consolidation companies implement longer payment terms. The monthly payment is a lot lower but the timeframe of payment becomes longer. At first glance, a lower monthly payment is very attractive since the payment frees up the budget. But longer payment means the total amount could be higher.
Aside from the extended payment, debt consolidation companies may have some additional fees as well as penalties. Like all other lending companies, they also have some early repayment penalty as well as late payment penalty when the debtor misses their monthly payment.
Bottom line: debt consolidation is an attractive offer because it eases the monthly payment. However, the debtor should double check the penalties of their old loan especially on early repayment. Debtors should also consider the additional penalties and fees that comes with the interest rate (usually fixed) offered by the debt consolidation company.
Breaking free from debt is not easy. Our specialized debt consolidation firm offers services for bankruptcy, debt consolidation and debt settlement issues. Get help today and enjoy the freedom of being out of debt!
Why Go Bankrupt, Choose Pay Day Loan Consolidation
You can find loan consolidation companies which are out there to help consumers get back on track should they have a lot of traditional financial debt such as credit cards, auto loans, personal loans, and also home equity loans. However, the traditional consolidation companies have no idea how to deal with borrowers who have multiple outstanding payday loans. That’s where payday loan consolidation companies come in.
This kind of loan consolidation company understands how to handle payday loans. Particularly, they know how to make it profitable to aid consumers with payday loans while helping the consumer lower his or her payments all at once. It’s a difficult goal that needs dedicated and experienced individuals who understand how to work with payday lenders.
The borrower who owes multiple payday loans can benefit greatly from working with one of the payday loan consolidation companies out there. To start with, the borrower will be making just one payment instead of multiple payments to each and every outstanding payday loan account. This simply means less chances of accumulating late fees from missed payments. It also means greater convenience for the borrower by managing only one payment.
The borrower will even see a reduced monthly payment. Generally, the principal amount may be reduced through the consolidation company negotiating with payday lenders and the interest rate will be reduced. Either way, that means the monthly payment is going to be lower and more affordable also.
The process for borrowers to deal with payday loan help companies is fairly simple. The first thing to do is to request an appointment with one of the companies out there. They will disclose the fees upfront and explain the whole process. When a borrower has become a client, he or she will likely make monthly payments to the consolidation company.
Once a sufficient amount has been paid to the consolidation company, they work effectively with the payday lenders to settle the accounts as paid-in-full. In some instances, the interest rate will likely be lowered. The net result will be a lower monthly payment for the borrower even after the fees to the consolidation company.
The reason why payday loan payments are so high is similar to the reason why the principal balance doesn’t decrease much after a payment. With each payment, almost all of it will go to interest. Very little goes to pay down principal. For instance, borrowing at a 30% interest rate for just two weeks translates to an 800% annual percentage rate. It should not be surprising that the principal will end up being paid down very slowly.
With payday loan debt relief, a borrower can avoid this problem. The consolidation companies will work with payday lenders to either reduce the principal or the interest rate. Even though there are no guarantees that they will be successful with every payday lender, several consolidation companies have experienced staff that know how to get concessions from your lenders.
If you fall behind on your payday loans then your debt and ability to escape from payday trap can become impossible. Before you know it you are behind on your regular bills trying to pay off payday loan consolidation. Collection calls and renewal fees should not be a part of your life. Get the payday loan help that you need and learn more about payday loan consolidation
Managing Your Debt: Alleviating The Stress Of Making Multiple Payments
Running up the balances on multiple credit cards is something many Americans have slowed down or stopped doing altogether since the Great Recession ensued. Nowadays many people in the United States have retrained themselves to use multiple credit cards as an emergency fund rather than buying luxury items like flat screen televisions, video game systems, and a variety of other toys. Still, old balances die hard and today we examine the pros and cons of credit card debt consolidation.
People who have too much anxiety about their dealings with numerous credit card companies and other lenders are usually the best candidates for debt consolidation. There are still some people that whip out their plastic for every little purchase such as Starbucks coffee or a newspaper and pack of cigarettes at the corner store. This shows that they are either not aware of the big picture or simply do not care about the repercussions of rolling over unpaid credit card debt each month.
1) Consumer Legal Protections
The debt settlement industry has come under some consumer protections in recent years. For example, our team has provided our reader with information about the Debt Settlement Consumer Protection Act. It is important that you know your rights ahead of time so that you can recognize when a debt consolidation company is not following the law.
2) Interest Rates Will Be Altered
The interest rates on the debt accounts will be drastically lowered if you opt for debt consolidation. The debt consolidation loan will carry low interest rates and therefore when you combine all your payments into this one loan, you can easily lower your monthly payments a well. With reduced monthly obligations, you should certainly save a lump sum amount of money every month.
3) Repayment Term Will Be Extended
The debt consolidation loan will also carry an extended repayment term so that it can facilitate the debt repayment procedure. With a longer repayment term, your monthly payments will certainly be much lower. However, make sure that you try your best to make additional payments so that you may save on the total interest cost over the long term.
4) Debts Will Be Combined
As the multiple debts will be combined with the debt consolidation loan, you can start off with making a single monthly payment towards the debt consolidation loan. Therefore if you were stressed out making multiple payments to multiple creditors, you can easily get rid of that by taking out a debt consolidation loan. This will alleviate at least part of your financial troubles.
5) Helps You Avoid Bankruptcy
By repaying your debts through a debt consolidation, you can mitigate the negative impact on your credit score as compared to filing bankruptcy. The stress and hassle of filing bankruptcy is worth avoiding. Bankruptcy stays on your credit report for 10 years so it’s a long term hit to your credit rating. A debt consolidation loan will also lower your credit score initially.
Nathan Randall, editor, Daily Dollar Newsletter provides free daily advice on money matters plus coupons and discount codes. FYI…you can now access the Daily Dollar Newsletter via iTunes podcast, YouTube video, and on Facebook and Twitter too.