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Why are so Many Americans Drowning in Medical Debt?

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rescue one financial debt managementCountless of Americans are being swallowed whole by unpaid debts. They owe debt collectors so much that they’re afraid to do simple things like answering their phones or walking out their front doors for fear of being served with the inevitable lawsuit.

The interesting thing about these debts is that they aren’t primarily composed of debt from credit cards, automobile loans, home loans or even loans period. They primarily consist of unpaid medical bills.

The prevalence of overwhelming medical debt becomes even clearer to understand when you have a grasp of who has such debts.

Who Does Medical Debt Affect the Most?
The statistics concerning unpaid medical debts can be extremely uncomfortable to realize. Unpaid medical expenses are so prevalent that one in five Americans between the ages of 19 and 64 will struggle to pay their medical bills.

While this means a little over 56 million people in the United States will have trouble paying their medical bills, only about 35 million will allow their bills to reach a state where a collection agency becomes involved.

Around 15 million of those Americans will use some or all of their hard-earned savings in an effort to pay off their medical debts. This leaves them with nothing to fall back on when they inevitably encounter more overwhelming expenses, as many medical problems tend to be chronic in nature.

Another 11 million Americans will take on some form of credit in an attempt to pay off their bills. A subset of this population will become unable to pay for the loans and credit cards they take out, which will result in collections contacting them too.

The most startling number, however, concerns the number of people who will be unable to pay for basic things like food, shelter, heat and clothing. Nearly 10 million Americans will be unable to afford such things solely due to high medical bills that they are unable to pay.

Why Are Medical Bills so Costly?
There are a number of reasons that medical bills can be so costly, but the three foremost reasons pertain to: the cost of equipment, the amount of time and money needed to train medical professionals, and the requirement of life-long medications to treat conditions like diabetes.

The unfortunate fact is that these costs are unavoidable for people whom understandably need the best treatment that can be provided to them. Imaging machines, expert doctors and medicines are all integral in treating conditions that would otherwise be life-threatening.

The problem is that hospitals, doctors and pharmaceutical companies all need to recoup the expenses that they require to make other people well once more. They may even need additional funds to cover the costly processes of researching new medicines and treatments, which is why many brand-name prescriptions cost so much.

Are You Facing Medical Debt?
If you’re one of the growing millions of Americans whom find themselves unable to pay overwhelming medical expenses, then there are still ways that you can afford to live a comfortable life without having debtors hound at your heels. Debt management and settlement programs may be able to help you out from under a mountain of medical bills.

To learn more about how these services can help you relieve the burden of debt, then contact Rescue One Financial.


Can you be Sued for Credit Card Debt?

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Many people notice a letter or two in the mail threatening a lawsuit for nonpayment of an outstanding credit card debt. These lawsuits can be filed against any person who hasn’t paid the outstanding credit card debt balance. Here is how credit card debt lawsuits work and how they can impact a person’s credit.

manage Credit Card Debt with a DMP

Can you be sued for credit card debt?
Whenever there is a credit card debt, a lawsuit can be filed against you. The debt collector can have a summons issued if the amount owed is large enough. If there is a lawsuit filed, one’s credit can be severely damaged. Most credit card companies who threaten a lawsuit will actually move forward with the process. Legally, you be sued for credit card debt.

What are the chances of being sued for credit card debt?
The chances for being sued for credit card debt are minimal. The person who owes less than a $1,000 for a credit card debt is not likely to be sued. If the person owes a substantial amount, but is making payments, that person is not likely to be sued for the credit card debt. The average time window is six consecutive months of nonpayment for a credit card debt. If a person doesn’t make six consecutive payments on their credit cards, that person is at risk of being sued.

How do people handle credit card debt lawsuits?
The person being sued for credit card debt should always make an attempt to show up in court. If the person does not show up to court, that person risks having a default judgment entered against them. Occasionally, debts are purchased from other credit card companies. If the person has been sued by a new collector, there may be some wiggle room in how the matter is handled. Challenging the collector’s authority to pursue the debt is strongly encouraged. If the debt is an older, the statute of limitations defense may also be worth pursuing. Some people with high levels of debt consider using a debt management plan.

How do credit card debt lawsuits affect your credit?
Credit card debt lawsuits do look bad on one’s credit, but by the time they’ve been settled, the damage has already been done. Usually, the credit card debt has already reached the 180-day mark by the time a lawsuit has been filed on the person’s credit. The greatest impact for an outstanding debt is on the person’s ability to borrow in the future. The action could affect a person’s ability to borrow for up to seven years.

If a person is less than four months behind on a credit card debt, a company will generally work with the person for a payment arrangement. The negative item on the person’s credit report affects the person’s chances of borrowing in the future. The credit score will have already taken a hit by the time the item enters into default status. Communicating directly with the credit card debt company can prevent negative items like defaults from ever appearing on a person’s credit.

However, if you owe more than you can pay back one might consider hiring a debt management company to help them with a debt management plan. If you are in the situation where you are making the minimum monthly payment because you can afford to pay anymore, contact Rescue One Financial. We have helped thousands with a customized debt management and we can help you!


Guidelines on how to Manage Debt Worries

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Without a doubt, if you want to get out from under debt problems, you will need to have a positive attitude, and you will obviously need to give it a good effort on your end. While true, plenty of consumers don’t know how to begin to fix their issues. With this in mind, here are four guidelines to follow if you want to manage your debt without a worry or fear.

debt management worriesAdd it all up: First and foremost, if you owe some money to creditors, you will want to know the exact amount. For starters, look at all your student loan paperwork, home loan paperwork and credit card statements. Believe it or not, you may not be in that bad of a position, especially if you have plenty of secured debt. Furthermore, student loans are not as bad as others as the interest rate is not as high. Either way, once you know what you owe, you can take the next steps.

Call up your creditors: If you owe a lot of money, chances are you will struggle to pay it all back. Think about it, if you can barely make the minimum monthly payments, you are one bad month away from seeing your debt worries spiral out of control. To combat this, simply call your creditors and ask for a reduction in interest rates. If you have student loans, consider refinancing them. With this simple tip, you can reduce your monthly payments and pay down your loans quickly and without as much struggle. If this doesn’t work, and it doesn’t always, follow the next step.

Use a professional who can help you get to the bottom of your money issue: If you really want to fix your problems and don’t know where to turn, you should consider using a debt management or debt settlement company, like Rescue One Financial. Often, a creditor will balk at your attempts if you don’t have a professional on your side. But, when you do have someone fighting for you, it’s possible to reduce your overall debt burden and enjoy better payment terms. Not only that, you can protect your credit score and get out of the situation with as little damage as possible. Remember, while it’s possible to fight back on your own, you should use the services of a well-trained and well-staffed debt management company can help you in your quest to pay off your loans.

Extra money: Finally, if you want to pay off your debts, whether you use a company or go at it on your own, you need to increase your income. Think about it, if you can wait tables or get a side job, you can pay off your debts faster. Or, if you have the possibility to take overtime, do it. Finally, if you don’t want to work a second job, at least try to cut down your expenses as a way to increase your monthly cash flow. Then, when doing so, you can pay off the debt and watch as it snowballs down to nothing.

If you need more assistance or require some help, you should contact a professional at Rescue 1 Financial. Simply put, if you do so, you are well on your way to fixing the problem and getting rid of your debts, all without giving up your paycheck for the next decade.


Managing and Lowering Credit Card Debt with a DMP

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The average credit card debt after removing the worst indebted households in the United States is more than $7,000, and the average monthly credit card payment ranges between $200 and $250 a month or roughly $3,000 a year not including over the limit fees and late payment fees. For a significant number of households, paying credit card debt is a true burden. Thankfully, there are debt management plans that can help you lower your balances and pay off your debt.

debt management plan

Benefits of Debt Management

  • One monthly payment
  • Works with your budget
  • Defined financial goals
  • Fewer calls from debt collection agencies
  • Improved credit score and debt to income ratio
  • Debt counselling

Debt Management for Credit Card Debt Reduction
Debt management plans are custom designed for your specific set of circumstances. Professional debt management councilors examine all of your unsecured credit card debt, your income and your monthly expenditures. From there, the company will help you create a budget to reduce your debt and ease your monthly financial burden. They will also educate you on unsecured debt, income and managing your finances.

Once the company has all of your credit card information, they will call your creditors on your behalf and start negotiations. These calls are designed to reduce your interest rates and the fees associated with your account. This task usually lowers the amount of your monthly payments and allows more of your payment to go towards the principle, which results in lower interest fees at the end of each month. It also reduces your monthly expenditures and leaves you with more cash in your pocket.

How Debt Management Payment Plans Work
After negotiations, the debt management company creates a single monthly bill that comprises the payments for all of your accounts. All you have to do is write one check per month and mail it to the management company. From there, the company splits the payment, according to the amounts owed on each of your credit cards, and mails the payments on your behalf, which is typically much simpler than writing and mailing multiple checks or logging into multiple accounts to pay your bills.

Over time, you will see your credit card balances go down and your overall household debt reduced. During this process, it is still wise to keep abreast of your credit card accounts and make a note of when each account is paid off.

Once an account is paid off and closed, contact your debt management company and let them know. Often times, you will be given the option to keep paying the same amount or reduce your monthly payment. Most debt management companies recommend you keep paying the same amount. This allows more money to be put towards your remaining debt, which reduces your outstanding debt even faster. Additionally, you can make payments that are more than your minimum monthly amount when you have extra cash.

To learn more about debt management and how it can help you lower your credit card debt, contact our friendly professionals at Rescue One Financial.


When is Credit Card Debt Too Much?

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There are many factors that come into play when discussing a person’s debt load. Every situation is different. Still, there are ways to determine whether your credit card debt might be too high.

Debt-to-income ratio
too much credit card debtA simple and quick way to get a sense of whether you have too much debt overall is to calculate your debt-to-income ratio. A debt ratio is simply the percentage of income that goes toward paying your monthly debts. To calculate it, simply add up your ongoing monthly debt payments – typically credit card, auto loans, personal loans and student loans. Then, divide the sum by your monthly income after taxes and other deductions – your take-home pay. A quotient of 0.10 or lower means you’re spending 10 percent or less of your monthly take-home on debts. A result higher than 0.10 is a warning sign. Also, If your debt load is negatively impacting your credit score – you’ve been turned down for new lines of credit – overall, you probably have too much debt.

Credit card warning signs
First, it’s important look at interest rates. Chances are you’re paying a much higher interest rate for credit card debt than you are for other debts. If your credit cards are maxed-out, and all you can handle is the minimum monthly payment, you’re only paying a very small portion of the principal on your debt. It will take years to pay off even a small debt with this approach, and you’ll end up paying more in interest than the original expenditure. If creditors are hounding you because you can’t make your payments, and you’re not expecting a large infusion of incremental cash any time soon, you can be certain you have too much credit card debt.

Negotiating with the bank
Banks are smart enough to know that someone with high credit card debt can’t just pull the money out of a hat. If you find yourself unable to make your monthly payments, don’t assume the situation is hopeless. Most banks would rather have you contact them, explain your situation and request assistance than have you go off-the-grid. It can be as simple as asking for a reduced interest rate, or requesting a temporary payment reduction. If your dilemma is longer term in nature, and outside factors are in play – like unexpected medical bills – you may want to ask the bank if it will accept a lump sum settlement payment for something less than what you owe.

Getting good help
If those attempts fail, it’s time to enlist the services of a debt management and resolution company. like Rescue One Financial that has professionals on hand who can develop a plan to get your credit card debt under control. They might be able to help you negotiate reduced balances or debt settlements on your credit cards. Similarly, it can advise you on the most effective way to consolidate your debts. It may be possible to get a new line-of-credit at a substantially lower interest rate than your paying on your credit cards, in which case you could pay off your credit cards, consolidate your debts at a lower interest rate, and reduce your monthly payments.


How to Use a Credit Card Without Going Into Debt

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A credit card can be a useful tool in your quest to spend money and manage your finances. While they have long been demonized as tools that put you into debt, this doesn’t have to be the case. How can you use a credit card without going into debt?

Make the Full Payment Each Month
Use a Credit Card Without Going Into DebtPaying your balance in full each month eliminates the need to pay interest on your credit purchases. It also ensures that you don’t carry a balance from month to month that will have to be repaid at some point. While it may not seem like a big deal to keep $50 or $100 a month on your card, that could add up to hundreds or thousands of dollars over the course of a year.

Don’t Make a Charge Unless You Have the Cash to Pay it Quickly
Many people use credit cards to rack up rewards or cash back that can be used for rewards. If you are going to use a credit card to get cash back from your credit card company, make sure that you have the cash to make the payment before the end of the billing cycle. If given the opportunity, you may wish to use your cash back as a credit toward your monthly payment. This gives you the chance to earn rewards that you may use in the future while ensuring that at least part of your credit card bill is being paid.

Use Balance Transfers to Keep Interest Charges to a Minimum
Instead of paying 20 percent interest on your balance, you can use a balance transfer to keep your interest to as little as 0 percent monthly. On a balance of $100 or more, this could lead to a tangible savings that can make it easier to pay off your bill each month or within a reasonable amount of time. In many cases, people have a hard time paying off their bill and rack up a large debt mostly due to rising interest fees.

Look for a Credit Card That Doesn’t Impose Late Fees or Interest Rate Hikes
Many credit card companies will raise your interest rate or charge you a fee of up to $35 if you are as little as a day late with your payment. While you may be able to plead for leniency with the credit card company, this is not always an option. Therefore, it is important to make sure that you aren’t charged a late fee or any other penalty in the first place. Those who have good credit may find it easier to find such a card.

Your credit card company is going to want to charge you as much interest as possible. While this is good for them, it is bad for you. Therefore, make sure to get a card that either doesn’t charge a lot of interest or pay off the bill before interest is charged. This may enable you to get the most from your card without having to pay a lot of those rewards.

However if you end up racking up debt due to credit card usage, contact the professionals at Rescue One Financial, we can help you regain you financial freedom.


How To Stay Out Of Debt With A Credit Card

Credit cards often receive a lot of negative attention. However, they can actually be very useful if they are used the right way. In fact, credit cards can help you build your credit. There are several things that you can do to use your credit cards responsibly and stay out of debt. Below are some tips for avoiding credit card debt:

stay out of debt with credit cards

Build Up Your Emergency Fund
Many people use their credit card when an unexpected expense arises, such as a medical bill or a major car repair. One of the best things that you can do to prepare for an unexpected expense is to build up your emergency fund. Try to deposit some money into your savings account every week. This can prevent you from needing to use a credit card if you are hit with an unexpected expense.

Make All Payments On Time
This seems common sense, but it is one of the best things that you can do if you want to avoid credit card debt. When you miss payments, your balance will increase because of late fees. Your credit card company may also increase the interest rate and raise the minimum payment. It is definitely in your best interest to make payments on time.

Pay The Balance Off In Full Every Month
This is a sure-fire way to ensure that you stay free of credit card debt. If you pay your credit card balance off in full each month, then you will be able to avoid paying interest. One of the reasons that many people have trouble paying off their credit card debt is because of the interest rates. If paying the credit card balance off in full each month is not a feasible option, then you should consider paying more than the minimum payment. You will be able to pay your card off quicker and avoid accumulating debt.

Be Cautious About Applying For New Credit Cards
Many people apply for new credit cards so that they can have more credit in their name. While increasing your available credit can help you increase your credit score, applying for new credit cards is not always a good idea. You may be tempted to spend more if you have a lot of credit. Furthermore, your credit score is impacted every time that you apply for new credit.

Only Charge What You Can Afford
Any financial expert would tell you that if you cannot afford to purchase it with cash, then you should not pay for it with your credit card. Far too many people use credit cards as a source to fund things that really cannot afford. You can avoid credit card debt if you avoid charging anything that you do not have the money in the bank to purchase it.

Millions of people struggle with credit card debt. However, if credit cards are used wisely, then people can avoid getting themselves into debt. If you need help paying off credit card debt or want more information, contact the credit card debt professionals at Rescue One Financial.

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How to Lower Credit Card Debt with Debt Management

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The credit card system is stacked against you. With an average interest rate of 13.02% and companies that encourage you to only make the minimum monthly payment, it is easy to get trapped in what seems like a never ending cycle. Debt management is just one tool that may help get you out of the trap and back on the road to a debt free lifestyle.

Lower Credit Card Debt with Debt ManagementWhat Is Debt Management?
Debt management programs are independent companies who help you negotiate with the credit card companies. You will send one monthly payment to the debt management company who will then distribute that payment amongst the credit card companies that you owe money to. This is not a separate loan that buys out your debt like loan refinancing; they are simply advocating for you and delivering your payments.

What Are The Benefits?
A debt management company will take over negotiations with credit card companies. Many people don’t even know that credit card companies may be open to negotiation and those that do are still in a weaker bargaining position, since they are both using their services and owe them money.

The debt management company is an outside force that is experienced in negotiating with credit card companies to get you a more manageable deal. This can include lower interest rates, more flexible payment levels, and a removal of fines and fees. A lower interest rate will allow you to pay off more of the principle each month, letting you get out of debt faster. The credit card companies are often willing to negotiate, since the money they get from a repayment plan is far greater than what they will get if you default on the loan or declare bankruptcy.

Having one monthly payment to the company can also help if you have difficulty keeping track of your payments each month. This will ensure that nothing gets missed and you don’t accrue more late fees or penalties.

What Can I Expect?
Generally you will not be able to keep using the cards that are being handled by the debt management company. The credit card companies will often allow you to keep one card open for emergencies, but all other lines of credit will generally be closed, giving you a chance to get on top of the debt without adding to it.

Most people who enter debt management pay their debts off in three to five years, setting themselves up for a much stronger financial position. Considering the effect being debt free can have on your finances, that is not long to wait.

Debt management can have an affect on your credit score, depending on the agreement with the credit card companies. However, making regular payments and getting out of debt will do a great deal to boost your credit back up. Many debt management companies will offer you advice on how to increase your credit even more once you have gotten out of your credit card debt.

Don’t allow yourself to stay in the vicious cycle of credit card debt. However you choose to get out of debt, starting now is the best thing you can do for your financial future. If you would like more information about debt management, you can contact the professionals at Rescue 1 Financial.


How Do Debt Settlement Companies Negotiate Credit Card Debt

If you have credit card bills that are mounting each month, you need a good solution. It is easy to miss a monthly payment and eventually have to pay twice as much on the bill. There are debt settlement companies willing to help you in this situation. First, figure out how debt settlement companies negotiate credit card debt. Then, find out whether or not you need one of these companies to manage your bills.

credt card management company

Encourage Savings
Debt settlement providers are available to help you settle debts. In addition, these professionals encourage you to improve your savings. A typical settlement is just a lump sum that is not the original amount that was agreed upon. A new budget is created to suit your affordability. Each month, you are encouraged to save for the next few years. It is important to work closely with a settlement provider who you can actually understand and trust.

Reduce Payments
Get the right settlement with the help of professionals. Reduce the payment and interest rate that you pay every month. When you have money to pay, avoid the late fees or overcharges. The catch is that you no longer have access to a high credit line. Also, your credit rating may suffer with this arrangement. Overall, you make affordable payments, but you have reduced access to credit.

Cut Debt in Half
Cutting your debt in half is possible. Settling debt is designed if you have extreme hardships like:

  • lack of employment
  • divorce
  • medical issue
  • inadequate savings

As a debtor, you have rights and can cut bills in half; however, your credit score is affected. Also, debt settlement providers take in a percentage of the negotiated settlement.

Offer a Lump Sum
One way that you can negotiate is to offer to pay a lump sum. Have a professional inform the credit card company that not settling could lead to bankruptcy. Give a lump sum that is half or less than half of the total debt. Pay as much as 20 to 50 percent of the total fee. Pay a lump sum whenever you can as part of a good negotiation.

Agree Not to Involve a Collection Agency
Request that your credit card company does not get the collection agency involved. That means having to sell off your debt before or after you make a settlement. If the debt is sold, you have to pay additional fees and get a bad credit report. So, agree to pay off the rest of the balance right away without getting it sold.

If you are drowning in credit card debt, find a company willing to guide you to a better way. There are many people with severe credit problems who do not know where to turn. You do not have to settle for bankruptcy. Instead, work with a credit card company by drawing up a negotiation. With the help of a debt settlement company, create the best deal to pay off all of your bills. Need help, contact Rescue One Financial!

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Can Wages Be Garnished for Unsecure Debt?

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When debt gets out of hand, wage garnishment is a legitimate fear. However, knowing the “rules” regarding garnishment can alleviate some stress and help you take the appropriate steps toward consolidating and eliminating your existing debt. Whether you are behind your house payments or simply dealing with credit card debt, makes all the difference as far as repossession and garnishment are concerned.

Is Garnishment a Possibility for Unsecured Debt?
To ease your fears a bit, your wages will not be garnished if you are behind a few payments on unsecured debt as long as the court does not have a judgment against you. Unsecured debt is not tied to any collateral. In comparison, a secured loan is one that is connected to property or collateral. A house loan or car loan is considered a secure loan. In this case, your bank or creditor is legally allowed to come and repossess your car or foreclose on your home if you stop paying making your house or car payment. Additionally, if you owe taxes, the government can garnish a portion of your wages.


What Is Considered Unsecured Debt?
An unsecured debt is any form of debt that is not tied to specific property as collateral. Because there is no security guaranteeing repayment of this type of debt, a creditor cannot garnish your wages without a court judgment. Many types of debt fall within this category. The most common types of unsecured debt include:

  • Store loyalty credit cards
  • Mainstream credit cards
  • Student loans
  • Telephone and utility bills
  • Medical bills
  • Personal loans executed without a security agreement or mortgage
  • Back rent

According to this list, most debts are unsecured and are backed only by your promise to repay the forwarded amount of credit provided.

In What Case May Wage Garnishment Occur?
Because unsecured debts are not guaranteed by specific collateral, a creditor is not allowed to automatically garnish your wages. If your debt becomes delinquent, the creditor is allowed to contact you to ascertain payment, report the delinquent debt to a credit reporting agency, or file a lawsuit against you. If the creditor files a complaint at the state or federal level, you will be served with a copy of the complaint. After you have been served, you have the right to contest the lawsuit before a judgment is reached. If the complaint is heard and a court judgment is reached, the creditor may be entitled to garnished wages.

Can Garnishment Be Stopped?
In the event that the court has made a judgment against you and your wages have been garnished, you have a few different options. In most cases, the best option for stopping garnishment is filing bankruptcy. If bankruptcy is the route you choose, it is important to use a trusted agency to help you sort through the process and dealings. If you need more information or require assistance remedying your debt situation and avoiding wage garnishment, contact debt settlement professional at Rescue One Financial today for help.