My Debt Relief Plan

Debt Settlement - The Facts

The number one question people ask me when they need debt relief is: does debt settlement ruin my credit rating?

A lot of articles have been published from some sources that claim to be experts on this new method of debt help; so to clear things up, no it wont ruin your credit.

The reason is you can only qualify to settle your debt if you are behind in your required monthly payments so your credit rating has already gone south. If you can afford to make your monthly payments and are up-to-date then why would you consider a settling your debts? Those that can qualify for this type of debt relief will be pleased to know that it is usually the most affordable and fastest way to get rid of your credit card debt.

Debt Settlement is not an option for people with good credit and regularly pay on time, this form of debt help only works when you are already behind and a slow payer. Only those unable to make their payments should consider hiring a debt settlement company.

Usually the worst thing you can do to your credit is file for bankruptcy. Bankruptcy should only ever be considered as a last resort after you have explored and exhausted other methods of debt relief. Second to bankruptcy is credit counselling services (for and not-for profit alike), these plans run on average for 60-72 months, place a R7 on your credit report and do not reduce the principal you owe.

A debt settlement plan will get you out of debt in 1 month if you are a qualified homeowner or in 24-36 months if you are not. Unlike credit counselling and bankruptcy, with a debt settlement company you can still qualify for a mortgage to consolidate the debt you owe and you often pay back about half of what you originally owed. $50,000 in credit card debt could be settled and gone in one month with a $25,000 second mortgage. Hundreds of Canadian’s are still in their homes today because debt settlement saved them from going bankrupt. Homeowners should do their homework and ask questions, only deal with a company that is well respected within the mortgage community and has been settling debt with the proceeds of mortgage financing for several years.

Remember there is no form of debt help that offers an immediate improvement to your credit score and you can only qualify to settle your debt if you are behind. Negotiating settlements on your debts does the least amount of damage only because it wipes out debt the fastest. In the last several years I have seen many people on the verge of bankruptcy actually improve their credit score by around 20% in 12 months if they have sufficient equity in their home to settle their credit card debt with a mortgage. Once you have cleared up the mess it’s important to follow some important steps so you can build your credit score. Any good debt settlement company that assists homeowners will provide this knowledge for free.

The best way to have a good credit rating is to pay your bills in full every month and not carry a balance. If you have to carry a balance always keep it below 50% of your credit limit otherwise even if you make the minimum required payment your credit score will start going south. If you are suffering financially then debt settlement will always be the quickest path to total debt freedom and do the least amount of damage to your credit rating.

Richard Cooper is Founder & CEO for Total Debt Freedom Inc. Canada’s most respected debt settlement company. Originally conceived for the mortgage community in 2003 to help fund more sub-prime mortgages and fix turn downs due to bad credit; Total Debt Freedom also offers debt settlement plans up to 36 months for those that aren’t homeowners. http://www.totaldebtfreedom.ca

Add comment December 10th, 2007

Online Debt Consolidation - Get Your Head Out Of The Sand And Get Started!

Online debt consolidation is something you should consider if you’ve found yourself in a shaky financial situation. Unfortunately, many people adopt the ‘panic-and-hide’ method when they find themselves in debt. This is the worst thing that you could do.

The ‘Ignore’ Method Doesn’t Work!

We all know that debt is a nasty business for everyone involved. And we also know that when you’re in debt, the first thing you feel like doing is hiding. That is possibly the worst kind of debt solution ever. Remember this- just because you do not pick up the phone and ignore your mail, does not mean your creditors will go away. In fact, that kind of behavior will just make them more aggressive.

Another thing to consider is that, debt is not static- if you ignore it; it is not going to freeze and disappear. Interest rate payments and late fees will keep adding up, whether you like it or not. That debt amount will just keep on growing, until one day it will indeed turn into a monster and it will be too late. Don’t ignore your debt because it just doesn’t work. Instead, try and do something productive that will help reduce your debt. An online debt consolidation is a relatively hassle-free way to go about it.

Sending the Right Message

If you decide to go in for online debt consolidation, you are sending your creditors a positive message. You’re telling them that you’re taking steps to deal with your debt in a responsible manner. You’re also telling them that they will start to receive their payments regularly from now on. A free online debt consolidation means that you will work with a professional lender, who will pay your creditors on your behalf. All you have to do is, pay your lender on a regular basis, usually once a month.

This is a steady form of debt reduction that can help you as well. Since it tackles your debt in a balanced and regular manner, it also gives you enough breathing room to salvage your assets. In fact, if you approach your consolidation program in the right way, you’ll be able to start putting away some money in savings as well. This means that, when your debt is through, you will even have a small nest egg in the making. Don’t hide from your debt- you can make a positive step towards financial stability with online debt consolidation.

Is an online debt consolidation really a good debt solution? To find out, all you have to do is, apply for a free online debt consolidation and you will see how it can help with debt reduction.

Add comment December 10th, 2007