Credit Card Debt Relief
Is Credit card debt relief attainable? Here are some things you need to know about credit cards;
It will take an average of 3 decades plus 8 years to pay off when you embark on making minimum payments on credit cards balance. The repayment will be x4 (times four) your debts (just interest payments alone) when you don’t raise your present balance. In year 2003, late charges as penalty fee came to an average of $10, and three years after, it became times 3 of this amount plus $5 on top! People are fast realizing that they are headed on continuous credit card treadmill.
Some Options for Credit Card Debt Relief
When people need help with their credit card debts; here are some decisions they embark on;
- The initial thing they do is to attempt contacting the credit card company directly. In most cases, these companies will present their credit card debtors with hard-to-attain conditions and terms as a way of helping them out.
- On the other hand, some will apply for a loan to achieve consolidation of their credit cards, in anticipation of a reduced payment. But these people are faced with disappointment because substantial credit card debt makes them high risk candidates for such offer.
- Consumer credit counseling is another option that debtors usually jump to when seeking for debt relief. In most cases, a lot of people will discover that the payment plan may mean a higher or exact amount with their current payments; besides, the payment plans usually span to five years or more.
- The worst scenario is resorting to bankruptcy filing. In the long run, those who opted for bankruptcy will discover that it is the worst decision they ever made as it stands as a life-time public record.
Which Option is Preferred when Seeking Credit Card Debt Relief?
Have you considered ‘Debt Negotiation’? Also known as debt settlement, debt negotiation is a better option for getting help with credit card debts, as well as other debts. However, successful negotiation of a settlement with collectors or creditors involves a sound plan. The phone calls and proposals towards debt negotiation must be well thought out for it to achieve a meaningful result.
Therefore, you need the help of professional and well experienced debt negotiators when you need help with your credit card debt relief
Secured Debt Relief
You can obtain secured debt relief help from secured debt credit counseling services. The major focus of secured debt credit counseling is settlement of secured debts. This option is quite effective when looking to terminate financial challenges like bankruptcy.
The secured debt counselors work towards bringing the credit level to a minimum or low level, within limits that can be managed by the debtor. They also educate their clients on money management, debt consolidation, as well as debt management. The secured debt counseling service providers function as debt reduction agencies, and represent the debtors in order to negotiate with their creditors towards interest rates reduction; thus assisting the debtor to pay off debt more conveniently and relatively faster.
With their well –structured credit counseling programs, these debt reduction agencies help their clients to learn credit card management techniques; this is one of their major areas of specialization. Such agencies usually partner with team of experienced and well knowledgeable experts completely dedicated towards working with debtors who are in dire need of obtaining secured debt relief.
As negotiators with creditors on behalf of their clients, secured debt credit counselors provide these services to their clients;
- Negotiation with creditors to arrive at a reduced interest rate
- Negotiation with creditors towards the elimination of penalty charges such as late fees
- Bring an end to threatening and embarrassing debt collection calls
- Debt consolidation
- Improvement of their client’s credit score
- … and many more
Secured debts such as auto loan and mortgage are also handled by secured debt reduction agencies. For these types of secured debts, the creditor withdraws the collateral when a debtor fails to pay the debt owed. In this scenario, the secured debt credit counseling service providers step in to contact the lenders or creditors on behalf of the debtor; and subsequently structure a suitable plan that will enable their client pay the arrears owed to prevent foreclosure.
However, the debtor should be thorough when choosing a secured debt credit counseling service provider to avoid being scammed. Ensure that you avoid any secured credit counselor that demands for upfront fee payment, or promises high sounding results within a short period.
Student Debt Relief
Student debt relief is attainable just like any other debt relief. Education is the bedrock for any meaningful career and achievements in life. Therefore, financial incapacitation should not constitute an obstacle against children’s education at all level.
In recent time when students’ debt for different levels and fields of education is steadily mounting, applicable authorities are looking into different forms and strategies for student loan debt relief. It has come to the extent that students are now discouraged to go into their choice career since they cannot shoulder the financial responsibility of higher education.
- Government Role
Presently, there is firm support by authorities concerned towards various programs targeted at providing financial aids to students. Such programs include scholarship schemes, loans, and other debt relief programs aimed at higher education students. Also, low interest rates loan programs are being advocated by authorities on behalf of higher education students.
What’s more, authorities concerned have been tendering proposals that will permit deferment of loan repayments to make the financial burden less for graduates till they are through with their post-graduate training. Maybe, one of the most excellent forms of student debt relief that majority of the students are anticipating is a substantial decrease in loan interest rates, and also time extension for the loan repayment.
- Students Responsibility
A student’s financial crisis can be resolved; here are some workable strategies;
- Finding a part-time job
If your parents or guardian are financially unfit to sponsor your education, there are part-time jobs that can suit your study schedules as a student. Such jobs can generate fair income that will aid in paying the “pay my bills date” on monthly instalment payment basis. Some of these jobs can be done online and in the hours you choose, making them more convenient and suitable for students.
- Seeking help from debt recovery companies
It’s also good idea for indebted students to seek help for their debts from debt recovery and settlement service providers. Another option is to contact a debt consolidation committee. These are more peaceful and sensible way to resolve debt issues rather than hiding or shying away.
For qualified students, education should be readily accessible, and finance should not be an issue for students with good prospects. Therefore, more practical student debt relief programs should be structured and implemented to aid students in their various levels of educational endeavours.
Medical Debt Relief
Medical debt relief is achievable when you embark on practical techniques. Medical debts are typically incurred via different forms of medical services received. If you are trapped with medical debt, filing for bankruptcy is an irrational option to embark on.
Some practical and better ways of getting relief for your medical debts are outlined below;
- Your medical debt should not be transferred to your credit card; generally, opting for a balance transfer to credit card will only end up increasing your overall balance substantially due to the interest that is incurred. It is also important for you to know that transferring a medical debt balance to a credit card will lower your possibilities to obtain Medicaid. Qualification for Medicaid is substantially based on your gross income. Your gross income is decreased by medical debt; on the other hand, credit card debt does not impact gross income.
- Endeavor to keep up with your medical bills; as much as you can, do not skip payment of your medical services. Anything contrary will only add up fees and interest for you. Keeping up with your bills will help you stay away from declining credit score.
- When you foresee inability to pay, arrange for payment plans negotiation. If it is glaring that you won’t be able to pay, contact the persons in charge in your hospital, or the doctor, so that you can come in terms with them on a payment plan that suits your budget. If it is something you cannot handle, then involve a debt settlement company to help you with your medical debt relief. The debt settlement companies or credit counseling service providers are highly skilled in negotiating on behalf of the debtors, so that an affordable repayment plan can be granted. They may also go to the extent of negotiating with your creditors to bring your entire medical balance to a reasonably reduced balance amount.
- You may also get help with your medical debt by seeking help from charitable groups. Some community organizations also exist to help people who are in dire need such as this. Churches could also be approached to get medical debt help.
- Medicaid is also a helpful way to seek medical debt help; the program is both operated at the state and federal level. However, the plan may differ in different states.
Medical debt relief will be achieved faster and conveniently when you follow the guidelines provided above.
Mortgage Forgiveness Debt Relief
Mortgage forgiveness debt relief is targeted at those whose homes have been given up through foreclosure. Also, those whose mortgage loans have been restructured may be eligible for tax debt relief under the Mortgage Forgiveness Debt Relief Act of 2007. This new tax relief act extends to 2012.
Mortgage Debt Relief Features
It does not include a cancelled or forgiven debt (up to $2 million) by a main home or a mortgage lender. Foreclosures as well as mortgage restructuring are eligible. The Internal Revenue Service Form 982 is used in claiming this tax relief.
Meaning of Cancelled Debt Income
As a debtor, when a creditor forgives or cancels the debt owed, the debt forgiven is regarded as your income. The implication is that this income is taken into cognizance by the tax law and a tax is imposed on any forgiven or cancelled debt; the only time it is not so is when there is an exception. Therefore, the debtor is expected to include the amount forgiven or cancelled in the income record. The case of a gift or bequest received by a debtor is not seen as taxable income.
There are a lot of exceptions provided by the tax laws when it comes to how forgiven or cancelled debts should be treated. The most liberal and easiest to compute is the tax-free treatment of mortgage debt.
In the case of foreclosures and mortgage restructuring; people whose homes are lost via foreclosure are not taxed on the forgiven debt amount. For those whose mortgages loan was restructured for a reduced balance, they are also eligible for tax-free treatment. However, other details apply for eligibility of tax exclusion of this kind. For instance, the house or home in question must have been a main home. In essence, the debtor must have lived in that house as a principal residence. Again, the cancelled debt must have been invested in the building or significant improvements to the property in question. If these conditions do not apply, then the forgiven debt will be regarded as a taxable income.
Mortgage forgiveness debt relief that do not qualify for tax exclusion also includes equity loans of which the proceeds were put in the purchase, building or significant improvement of the home. Mortgages for rental properties and second homes are not also eligible for tax exclusion. On the other hand, they may be eligible for other exclusions.
Nonprofit Debt Relief
Non-profit debt relief service providers bring debtors and their creditors together in order to plan programs for affordable debt repayment, which is usually based on monthly earnings and expenditure. Fees payable by the consumer for the debt relief services could be determined by the non-profit organization, in accordance to the ability of the consumer to pay.
Typically, non-profit organizations that provide debt repayment services do not lower debt amounts; however, they can enter into negotiations with the creditors for fee reductions, finance charges elimination or waivers on behalf of their clients.
Caution:
When looking for a non-profit debt settlement organization, be careful not to fall prey of scams. You can achieve this by avoiding unsolicited offers of debt repayment assistance. Also, ensure that you do not make any advance payment as service fee. Again, if any organization vows to provide you with immediate debt settlement or debt settlement result, think twice on such offers.
How the non-profit debt relief organizations work
They need the clients to fully disclose all income, credit accounts, as well as expenses. This information will aid them in negotiating with the debtor’s creditors, an affordable debt settlement plan.
They also negotiate for reduced finance charges on behalf of the debtor. In other words, reductions of late fee payment or waivers may be part of the debt relief plans. This aids the debtor to settle debts faster than imagined.
When working with non-profit debt relief organizations for the repayment of your debts; the debt relief terms and conditions generally obligate the debtors to close their credit card accounts. They are also required not to operate new credit card account while the debt repayment plan is still running. Termination of the debt repayment plan may be the consequence of non compliance to the terms and conditions.
With regards to your credit report information, any ill credit report acquired prior to the structuring of your debt relief plan cannot be repaired by the organization. Repayment made by the debtor based on the repayment plan are generally communicated or reported as ‘paid as agreed’ to the credit bureaus.
Since debt management is a major part of any debt repayment plan, the agents of the non-profit debt relief organization would usually help the clients to see how debt was incurred, and subsequently aid them in planning and learning how to work with a cash-based budget; such budget will incorporate techniques for saving towards emergencies.
Immediate Debt Relief
Immediate debt relief is achievable with a debt settlement company. One of the best ways to achieve immediate debt relief is to contract the services of a debt settlement company. When debt repayment bugs you so much and constitutes an object of worry; when negotiation with creditors seem to fail completely; and when you are completely trapped in debt with no clue of coming out, then you need professional help via debt management organization.
The best place to look when seeking to get debt relief help from a debt settlement company is online. However, you must be careful to make the possible best choice. The right choice of a debt management company will make you smile out of debt in the quickest time possible.
A debt management company will aid you in the following ways;
- Reduction of your final payable amount
- Term of payment increase
- Favorable monthly installment negotiation
The debt relief company usually partner with the back end service providers to aid you in immediate debt relief. The latter usually have a cordial relationship with majority of the local creditors; as a result, it is easier for them to enter into negotiation with the creditors on behalf of the debt relief company’s client. Another important function of the back end service providers is to educate the debt management company’s clients on how to effectively manage debt and finance in general.
It’s really beneficial to obtain help for debt relief via the debt management company. Besides educating the debtor on the area of efficient finance/debt management, the back end service provider also teaches the debtors different investment strategies that generate good better returns. The debtors are also taught effective money saving tips. All these help in enhancing the financial situation of the debtor, and make debt repayment much easier and achievable in the shortest time possible.
If you want to avoid the embarrassment that accompanies collection visits or calls by your creditors, then you need a debt management company to act on your behalf. The entire debt collection calls will be transferred to the company who knows how best to handle and respond to such calls via their representatives.
Now, before you can enjoy the great services offered by debt Relief Companies in helping you achieve immediate debt relief, you must ensure that the company you are choosing is well experienced and is capable of living up to their promises in helping you pay off your debt.
