My Debt Relief Plan

Debt negotiation is one of those things that Spam are made of and for that reason many people are reluctant to actually take steps toward repairing their credit and negotiating their debt. Debt negotiation does not always require legal assistance and occasionally it does. Either way, it is important to recognize that debt negotiation is not the point of no return that so many people think it is. With proper debt negotiation, it is possible to get out of debt in 36 months, three years, or less and even reduce their debt by fifty percent or more. What could be better than getting out of debt and reducing overall liability?

If you are reading this article, chances are that you are getting those harassing collection letters and calls that so many of us find horrid and annoying. Dont worry; these calls come to everybody at some point and that just gives you the opportunity to connect with your creditors and those collection agencies that have been charged with your accounts and find some type of settlement options. Between you and your creditors you should be able to come to some common ground on what can be done to reduce your liability and get your creditors their money; that should make everyone happy in the end.

If you cant settle your debt yourself, it is okay to turn to a professional. Many of them offer their services free of charge while others do not, and deciding which one is best and will work best for you is a personal decision. However, they might be able to not only help you settle your debt and get out of your debt in 36 months or less, but they can also help you to figure out how you got into such debt in the first place, ensuring that you never have to deal with those nasty collection calls again.

So, where do you go from here? Having a life free of debt is easier than you think, and you deserve it. Take steps to get all of your credit reports together and your bills that may have yet to make it to your credit report and talk to a financial counselor about what you can do get yourself out from under this mountain of paper. It can be done, and it is much easier than you probably ever thought it would be.

Not many people know that that legislation was introduced in 1986 which allowed debtors to have the right to tell their unsecured creditors that they would derive no benefit from them demanding monies from them that was not available. It might sound very strange, but your creditors will want to help you all they can.

With most debts it is usually the horrendous interest charges which prevent a sizeable chunk of capital from being noticeably paid off your debts. We are able to assist you to legally make a private arrangement with all your creditors which would drastically reduce your debts and cancel the interest charges. Thereby allowing for affordable payments by you every month without having to struggle or receiving any demanding phone call’s or letters anymore !

What is an IVA?

An IVA (Individual Voluntary Arrangement) is a process set up by the government within the 1986 insolvency act that allows for a person in debt to make a formal arrangement with their creditors without the need to go into full bankruptcy.

An IVA will enable an individual with debts in excess of 15,000 to make dramatically reduced, affordable monthly payments over a fixed term, usually 5 years.

Once an IVA has been set up and the agreed monthly payment structure is adhered to, there will not be any further worrying demands from creditors and all of the letters and phone calls will stop.

All interest and charges will be frozen during the course of the IVA, and whatever is remaining will be written off at the completion of the IVA.

You have heard the experts say that you can negotiate lower interest rates on your credit cards yourself. Is it true? Absolutely, as long as you have good income and good credit.

If your income or credit is not great, you must plead with each creditor to request hardship consideration. A hardship is sometimes granted, at the creditor’s sole discretion, when they deem your situation a temporary case involving a loss of income or some other life-changing event.

The key is that it is up to each creditor to decide if they will grant a temporary reduction in your interest rate and minimum payment. Even if they agree, most hardships are only granted if the creditor believes that you can get back on track within six months.

According to Daniel Johnson, an Accredited Financial Counselor with Personal Financial Network, many debtors find that many creditors refuse to grant a hardship when requested. One common reason is that their financial situation was based on many factors, including poor money management.

When you are denied a hardship, then it is generally because your creditors do not believe that you can correct the problem on your own. This is where you may wish to consider credit counseling.

Credit counseling allows financially distressed debtors to repay their debt according to a schedule established through a credit counseling agency. The agency petitions your creditors to agree to lower interest rates on your credit cards, as well as to re-age your accounts. This can improve your credit and eliminate nuisance fees.

Whereas some debt management plans are denied by creditors, most are approved when the agency abides by certain guidelines. A reputable credit counseling agency will spend the time to ensure that you need and qualify for benefits before allowing you to enroll on a debt management plan.

Qualifications for a Debt Management Plan

In order to qualify for benefits through a debt management plan, creditors require that you demonstrate financial need. Late payments are a sign of financial need, but you do not need to be late to qualify. In fact, the role of your credit counselor is to help you get out of long-term debt while preserving and improving what is left of your credit.

Your credit counselor will help you develop a budget and will discuss a number of options with you. If they feel that you have enough discretionary income to get out of debt on your own, then they will coach you on a self-directed plan rather than recommend a debt management plan.

Conversely, if you cannot afford even the lower payments through a debt management plan, then they may advise you to seek qualified legal advice regarding bankruptcy options. This assumes that you could not correct your budget through income increases or drops in expenses.

If you can barely afford your minimum payments, then you are likely a candidate for a debt management plan. An Accredited Financial Counselor can help you evaluate your financial situation as well as to discuss the potential qualification for a debt management plan.