Debt Settlement

Time and Debt Repayment Still the Best Strategy for Increasing a Credit Score

Some of you might be rejoicing a bit because of news that the chief credit scoring outfit, FICO, is changing its rules about how it scores debtors. The main change is that the new system will draw a distinction between medical debt and regular debt. The other big change is the new system will disregard medical collection accounts if they are paid or settled.

Posted on Aug 13, 2014

Medical Debt, New FICO Score Good News or No News

Last week, FICO, the nation's top credit score provider, announced upcoming changes to the way some debts impact your credit score. This could be good news for thousands of people, if lenders adopt this new model.

Posted on Aug 11, 2014

Debt Settlement, Financial Friend or Foe

For years many financial experts have been warning against using “debt settlement” strategies to battle high credit card debts. According to a June 2014 report from the Center for Responsible Lending, despite changes in federal and state laws, the warnings will continue.

Posted on Jul 21, 2014

Know Your Options Before Addressing Financial Problems

Your financial difficulties could already be severe enough that you are tempted to accept the first solution that comes along. However, there are pros and cons to bankruptcy, debt consolidation, debt settlement and most debt repayment options. It is important to talk to someone who knows the ins and outs of the credit industry and can offer educated recommendations on how to get out of debt. Debt problems typically do not materialize overnight. Nor do they go away quickly. Many people have benefited from having a credit counselor guide them through their debt repayment options. For those worried that talking with a credit counselor will add another bill, most counseling and education services are offered for free. If you decide a debt management plan...

Posted on Dec 12, 2013

Survival Plan for Maintaining Financial Stability during Sequestration

  Washington, DC – Sequestration is now in place, and along with it came a good amount of uncertainty, causing many Americans to wonder how they will be impacted.  By some estimates, more than one million employees of federal agencies may receive furlough notices.   Some workers are not adequately prepared to deal with a loss of income, even a short-term one.  For those living from paycheck to paycheck or without significant savings, any income interruption is likely to put them over the financial edge.    For example, consider the statistics below from the National Foundation for Credit Counseling (NFCC) Financial Literacy Survey:   ·         Thirty-three percent of respondents admit to not paying all bills on time; ·         Thirty-nine percent have zero non-retirement savings; ·         Thirty-nine percent carry...

Posted on Mar 04, 2013

Thinking of Settling a Debt, It May be More Damaging Than You Think

I received a call last week from a woman in a panic because she had settled a broken lease and was now being sued for the remainder of the debt. With many people feeling the financial pinch now, it is easy for to be convinced to settle debts.  After all, they probably don’t owe the entire amount that is being demanded any way, right? Well, sort of. In a typical rent or lease agreement, credit card agreement, car lease agreement etc, there are stipulations about the fees and penalties that will be assessed if you do not follow the agreement. If those fees are outlined (and in compliance with your states laws), then yes, you owe the entire amount. At this point,...

Posted on Nov 21, 2012

Debt Settlement: Don't Get Fooled

A few weeks ago I visited a local vocational school to talk to students about credit and to provide them with individual credit counseling assistance. One of the gentlemen, Steve, who stayed after to have an individual appointment, said he wanted to know what his credit looked like now that he was using a debt consolidation service. Steve is a single, 32 year old. He has worked in the construction trade all of his life, but was a casualty of the housing crisis and is now unemployed. I asked him how long he had been using the service and he said it was about six months. He said his payments on the debt consolidation program were half of what he had...

Posted on Jul 22, 2011

Paying the Debts of a Deceased Relative: Who Is Responsible?

We often hear from clients struggling to deal with debt collectors seeking repayment of debts incurred by deceased relatives. This article, from the Federal Trade Commission, outlines your rights and responsibilities when faced with this situation. FTC June 2009 Paying the Debts of a Deceased Relative: Who Is Responsible? After a relative dies, the last thing grieving family members may expect are calls from debt collectors asking them to pay their loved one’s outstanding debts. According to the Federal Trade Commission (FTC), the nation’s consumer protection agency, a surviving relative usually has no legal obligation to pay the debts of a family member who has died. In fact, the rights of surviving relatives are covered by the Fair Debt Collection Practices Act (FDCPA),...

Posted on Aug 25, 2009

Pros and Cons to Debt Settlement

A debt settlement is when a creditor agrees to accept less than what is owed on a principal balance of a debt. Many agencies offer Debt Settlement Services, often charging high upfront or ongoing fees when individuals are already experiencing financial distress. An individual can work directly with a creditor to settle a debt on their own but must have a lump some of money to offer the creditor(s) and be prepared for settlement negotiations. For example; Molly is behind on her store charge card and owes $1500. Molly negotiates with the creditor to pay 65% of her total debt and the creditor agrees. Molly pays the lump sum settlement amount of $975. What are the Incentives? For creditors, the primary incentive is to recover...

Posted on Aug 25, 2008

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