| If you are like a lot of people, you no longer have | | | | You have to stop paying the creditors, not a penny, |
| access to the easy money your home created for the | | | | though we can't tell you to do that, you have to make |
| last few years. With that spigot of cash turned off, | | | | that decision by yourself. What will happen when you |
| many people are turning to their credit cards to survive. | | | | stop paying is the computers will flag your account as |
| The problem with that is the more you use them, the | | | | a statistical possible bankruptcy. They will transfer you |
| more you become a slave to them. Ultimately, it leads | | | | to a different department called loss mitigation, or |
| to a death spiral where you start to fall behind, and are | | | | recovery; those are the people the mediators work |
| unable to catch up. If that is the case, you might want | | | | with. At this point, the credit card companies want to |
| to find out how Debt Settlement could help you. | | | | "recover" whatever they can, write off the losses on |
| With the mortgage bubble bursting, many people no | | | | their taxes, and loan the money to the next victim. |
| longer able to extract equity out of their homes. | | | | Step 2: |
| Lenders have significantly tightened their standards, | | | | Retain a competent mediation firm to represent you. |
| and the liar loans, where you did not need | | | | The first thing that needs to be done is to issue cease |
| documentation, are over. Many people have switched | | | | & desist orders to the creditors. This stops the |
| over to using their credit cards to make ends meet. | | | | calls, as they can't call you if you put your request to |
| While this is a temporary fix, it could come back to | | | | stop calling you in writing. Congress passed a law |
| haunt you. | | | | called the Fair Debt Collection Practices Act, and you |
| Credit card companies are the legalized Mafia, and | | | | do have some rights regarding harassment by the |
| their lending practices make Tony Soprano jealous. | | | | creditors, one of them is they must stop calling. They |
| Miss one payment and your interest rates could shoot | | | | can be sued for $1,000 a call if they don't stop. Any |
| up to over 30%. Go over your credit limit, and they | | | | letters they send you, forward to your mediator to |
| tack on up to $49 per month. Soon, your minimum | | | | respond for you to take you out of the loop. |
| payments are mostly interest, and you realize you will | | | | Step 3: |
| never pay off the debt in this lifetime. | | | | Instead of paying them every month, you put the |
| Maybe you or a spouse became ill, was laid off, or had | | | | money in a secure trust to accumulate. It normally |
| to take a job with a cut in pay. Whatever your | | | | takes four to eight months to save up the money to |
| hardship, you come to realize that you either can't, or | | | | settle an account. Once you have the funds saved, |
| don't want to pay the credit card companies anymore. | | | | your mediator can settle your first account. |
| At this point you have a few options; and they all will | | | | Let's say you have a $5,000 credit card; you need to |
| hurt. Besides bankruptcy and Consumer Credit | | | | save up $2,500 in your trust before you can settle. |
| Counseling (CCC), which will hurt for ten to thirteen | | | | Once you do, the mediator will get the creditors to |
| years, there is a little known process called Debt | | | | take the lower amount as full and final payment, and |
| Settlement that can have you out of debt in two to | | | | they will notify you in writing they accept it. That's |
| four years, and can lower your monthly payments if | | | | when you have your trust company send them the |
| you need relief. | | | | money, and then you are done. You then go after the |
| Debt Settlement is a hardship program, and we call it | | | | next one, one at a time. |
| chemotherapy for your debt. It is a process where a | | | | Then, the mediator will get the creditors to agree to |
| mediator, or neutral party, helps bring about a peaceful | | | | clean up your credit report within 30 days after they |
| compromise between you and your credit card | | | | receive their money, and change it back to a paid |
| companies. By showing them that you are in a | | | | account. They normally won't do it for you on your |
| hardship, it is possible to get the credit card companies | | | | own, however, the mediators work with many |
| to accept 50% or less of it as full and final payment. | | | | customers, so they get the credit card companies to |
| Each creditor settles differently, and the older the debt | | | | do things they won't do for you. |
| is, and the worse your hardship the less it is worth. | | | | Thirty days after the end of the program, you run your |
| Then, a payment plan is set up where you make one | | | | credit report and double check. If there is anything left |
| monthly payment to pay it back over two to four | | | | over that would hurt you from getting new credit, that's |
| years. If you have high interest rates, and you have no | | | | when you contact the largest credit repair company in |
| problem making the payments, then you could finish in | | | | the world. They are the best, and they are attorneys, |
| about two years. If you have problems making the | | | | and they go through a dispute process with the 3 |
| payments because your income is too low, your | | | | credit bureaus, and in about 2-3 months, hey can get |
| payments could be lowered twenty to forty percent | | | | line items removed s for about $200. You can do it on |
| and you would be finished in three to four years. | | | | your own, though they are attorneys and they are the |
| There are three steps to making Debt Settlement | | | | best. |
| work, though you must realize who we are dealing | | | | That's the good, the bad, and the ugly about Debt |
| with here, big computers, and you are a number to | | | | Settlement. While it is a hardship program, and it |
| them. The only way they will work with a mediator is if | | | | affects the credit for 2-4 years, it's usually a much |
| the credit card companies fear they will not get money | | | | better option than bankruptcy or consumer credit |
| from you. | | | | counseling for the right person. |
| Step 1: | | | | |