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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.

Garnished-Paychecks

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.

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Who Regulates Debt Management Companies?

The Uniform Debt-Management Services Act (UDMSA) of 2005 provides the rules to debt counseling and management governance by oversight agencies. In spite of the recent enactment of debt management regulation, the consumer debt counseling and management services industry dates to the 1950s. Debt management services provide counseling to debtors in the interest of paying off owed finance to crediting parties.

The general objective of the Act is to provide services with a guiding set of rules toward governance of debt management services programs so as to assist consumers in avoiding bankruptcy. Related debt management services focused on consolidation of debt under an umbrella loan program, are part of the scope of regulatory oversight dedicated to governing rules to creditor settlement of debt.

Who-Regulates-Debt-Management

Consolidation services offering debtors’ payment arrangements in exchange for collection of a periodic amount from a debtor for which the creditor has assented to meet the rules to debt satisfaction.

The UDMSA framework guides registration of services, service-debtor agreements, as well as enforcement.

Registration
The registration of consumer debt-management services is mandatory. Registration includes reporting of: financial condition, principals, service locations, agreement with debtors, and history of operations. Liability insurance of the amount of no less than $250,000 and a bond of at least $50,000 must be evidenced for registration. Annual renewal of registration is required.

Agreements
Disclosure rules to agreements with debtors, and debt certification of debt consultants. Statutory provision to the contents of agreements and related fees include a penalty-free, 3 day right of rescission on the part of a debtor. There is also a 30 day cancellation fee.

Termination of debt servicing after 60 days of non-payment to a creditor is standard. Payments to creditors by debtors must be held in a trust account. The UDMSA provides for creditors to charge an overall fee cap based on amount entrusted by a consumer or 30% of the difference between the principal owed at time of service initiation, and debt settlement amount.

Enforcement
Prohibition of specific activities by debt management services is outlined in the Act. Creditors may not misappropriate trust funds; request a settlement or more than 50% of the total debt owed without debtor consent; demand gifts or premiums to enter into agreement; or represent debtor settlement without proof of creditor status as a certified entity.

Under the Act, creditors must show good faith in all obligations to debtors. Errors and omissions insurance coverage exhibits that a service is protected from third party litigation, and that such liabilities will not affect a consumer in their relationship with the creditor, or the ability of the service to adequately and honestly managed entrusted finance.

UDMSA & Debt Settlement Trade Associations
The recent rise of debt settlement in service to consumer debt relief as an alternative to bankruptcy, established the conditions for UDMSA enforcement within debt settlement trade association practices. The adoption of the UDMSA and related rules to practice illustrates the commitment that consumer debt management organizations have in protecting consumers and creditors from bankruptcy.

To learn more about Rescue One Financial and our background visit our Wikipedia page.

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Can Long Term Debt be Negative?

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Plenty of people carry a lot of debt for the long-term. While it’s possible for a gainfully employed person to carry lots of debt, it’s not always wise. In fact, people often ask themselves the question, can long-term debt be negative? The answer is yes. Here are five reasons why long-term debt is a bad thing.

  • One job loss away from a catastrophe:
  • All-too-often, a gainfully employed person with a six figure income will buy a large house, boat and car. Not only that, people will often carry thousands of dollars of credit card debt. While this is okay if you make a lot of money, what happens if you lose your job? In fact, looking to 2008, we can see what happened when well-paid individuals lost their jobs; they ended up with serious financial problems. So, in the end, whether you make a lot of money or not, long-term debt is bad as you can easily lose your job or business income.

  • Hurts retirement savings:
  • If you carry loads of debt, you swill struggle to save for retirement. While it’s easy to forget about this event if it is 20 years away or longer, it’s not wise. No, if you if you forget about retirement or don’t put any money in the bank or into retirement accounts, you are going to set yourself up for a sad future. On the other hand, if you don’t carry too much debt, you can put money in an IRA or 401k.

    long-term-debt

  • Can’t make changes in life:
  • As mentioned, people often have excellent incomes but nowhere turn. If you are like most people, you will want to change jobs or maybe start a business. However, if you become addicted to a certain lifestyle and have loads of debt, you will struggle to make any moves. Not only that, if you ever want to return to school, you are going to hurt your financial future if you already owe the credit card companies lots of money.

  • Kids:
  • If you have a dual income and no kids, you probably think life is perfect. In a way, people with this income and no kids are probably enjoying their life. However, if you plan to start a family in the future, you are in for a rude awakening if you look at the costs associated with raising kids and sending them to college. However, if you are in debt, you are in for even more pain. Think about it, for every kid you have, you are going to have to spend plenty of cash, and you won’t have any money to knock out your debt.

  • Stressful:
  • As you probably know, if you are in debt, you can suffer from a lot of stress. In the long run, this will cause you serious problems with your personal and work life. For this reason, you should try to minimize your debts.

If you need help paying off your debts or coming up with a plan, you should consult the qualified debt management professional at Rescue 1 Financial to help you formulate a serious and workable plan.

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What are Debt Management Ratios?

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Debt management ratios are used to manage a company’s ability to continue to operate without encountering financial challenges in the future. These ratios are sometimes referred to as a long-term solvency ratio. Lenders, investors and business owners rely on this ratio as a decision-making tool and use it to measure the overall health of their business.

How are debt management ratios used?
Debt management ratios are used to determine whether or not a person is capable of handling long term debt in addition to regular obligations. The measurement of a company’s total debt amount in proportion to what is financed is considered the debt management ratio. These metrics can be used in gauging the overall health when operations, savings, funds and stocks are all taken into account. This ratio is very important in determining the level of risk associated in dealing with a business. This proportion also weighs the potential of default. The ratio measures the proportion of a firm’s assets funded by equity or debt.

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What happens if the debt management ratio is unfavorable?
If the debt management ratio is unfavorable, the business is at risk of default, bankruptcy or some other form of financial distress. Industries that are unpredictable when it comes to sales and cash flow do not have the same latitude as their more stable counterparts. These differences determine how a business is able to handle its debt. Companies classified as being capital-intensive require more capital like plants to operate; low capital industries do not. This is why companies that are capital-intensive tend to have higher debt management ratios compared to companies that have low-capital. A company with a higher ratio can expect to pay more in interest rates in the debt management ratio isn’t low enough.

Why are they used?
This ratio is used by lenders and investors to measure the health of a business. High debt-to-equity signals that a company may be headed in the wrong direction or may be approaching financial distress. The revenue generated isn’t substantial enough to meet all obligations. These ratios may also demonstrate the company’s inability to really increase their profits and properly leverage them to the firm’s advantage. Investors like to know beforehand whether or not it makes sense to invest in a particular business.

How do lenders treat those with better debt management ratios?
Companies with better debt management ratios are much more likely to secure funding from lenders and investors. Those with the best debt management ratios are in a better position to acquire capital if more is needed. Other businesses may have a more difficult time getting additional capital if they get in a bind.

Debt management ratios can be a valuable tool in assessing the health of your business and gauging its long term solvency. It can also helpful you strategize on how to better leverage your finances should you discover a need for loans and investors in the future.

If you have questions or concerns related to debt management ratios or services contact the professionals at Rescue One Financial, we are here to help!

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Can Debt Management Help With Hospital Bills?

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can debt management help with hospital bills Expensive hospital bills can cause a great amount of stress due to their importance and high cost. Consumers struggling with a long-term medical condition might find themselves having to make large payments every month just to keep seeing their doctor. Those struggling without insurance or without a job may find it very difficult to make these payments each month. Additionally, high debt can exasperate these difficulties as consumers are forced to make car payments and mortgage payments instead of paying for the doctor visits. Those struggling with this type of debt should consider the debt management strategies Rescue One Financial has recommends in order to help make managing these difficulties easier.

1. Consider Selling Assets
Consumer struggling with high hospital bills might want to consider selling off some of their assets in order to pay off debt. Common items like expensive cars or homes might not be necessary during hard times. While it may be difficult, consumers should admit when their financial situations are dire and consider selling down some of these assets. This can cut down on the amounts owed each month and make debts more manageable. This will leave more money to be spent each month on hospital bills rather than unimportant luxuries. Prudent actions like moving into a less expensive home and selling off expensive cars can make getting through rough times more manageable.

2. Settle Debts
Debt settlement can also be a viable option for those struggling with high debt. Many creditors do not want to make the high payments necessary in order to collect an outstanding debt. They may simply write off the account entirely or reduce the amount owed. By making these debts more manageable, hospitals and doctors know that they will be more likely to get their money. To do this properly, consumers should hire a professional, such as Rescue 1 Financial, in order to reduce outstanding debts. By doing this, great amounts of money can be saved each month and more can be allocated to medical bills.

3. Refinance
Many consumers often do not consider refinancing until they find themselves in a difficult financial situation. They may have had expenses loans since they were young that have interest rates that are simply too high. Individuals who have developed good credit scores can often refinance some of this debt in order to save money each month. In order to do this, consumers will need to make their debt payments on time in order to improve their credit scores.

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Use a Debt Management Plan to Pay Off Medical Debt

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Consumers experience long-term medical conditions can find themselves in a situation where they are unable to make debt payments associated with hospital stays, doctor visits, and specialized treatments. Without doing something about this outstanding debt, consumers may be faced with making large monthly payments for the rest of their life. Additionally, they may be forced to file for bankruptcy as they will be unable to pay their debts. This could result in being unable to take out future loans since individuals will be viewed as not creditworthy. Therefore, consumers need to come up with a plan to make their medical debts more manageable.

1. Survey Existing Debtuseadebtmanagementplantopayoffmedicaldebt
The first step to devising a debt management plan is to run credit reports to get detailed information about outstanding debt. Consumers should sit down and add up the total amounts owed and the interest rates associated with these accounts to get a full overview of their financial situation. As part of this process, consumers should also evaluate their own credit scores and look for opportunities for improvement. High debts might seem impossible to pay off, but with time this will become more manageable. Consumers should not be afraid to know their financial situation by carefully studying these reports.

2. Get Help from Experienced Experts
When attempting to come up with a debt management plan, consumers should be certain that they rely on proven strategies. Individuals who have successfully overcome high medical debts and professionals in the debt management field, such as Rescue 1 Financial should all be consulted. They can often provide great insights into strategies that can be used to pay down or off medical debt. Additionally, debt management professionals will be able to assist with settling an existing medical debt or at least reducing the payments. This could make the debt more manageable and relieve part of the burden from the consumer.

3. Consolidate Loans
Individuals struggling with large amounts of outstanding medical debt can consider consolidating their debts into one lower monthly payment they can afford. This can make paying debt more affordable as individuals will not need to worry about making several monthly payments. Rather, one creditor can be paid at generally a lower rate. For those with many outstanding loans, this can be an effective strategy to managing medical debt and even starting to pay them off. As part of a debt management plan, consolidation can be an effective tool for making the plan work for the future.

Contact Rescue One Financial today and find out why using a professional might be your best option for maximum results.

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Reduce Old Credit Card Debt With Debt Management

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A debt management plan is often the best path to take for an individual’s personal finances. In the end, this type of debt repayment strategy can help prevent a bankruptcy; while at the same time, it can give a person a chance to get back on their feet and pay back the money they owe. When people get to a point in their personal finances where they need help paying their credit card debt, the services of a debt management company, such as Rescue One Financial, can be the best solution to resolve your debt.

Eliminate old credit card debt from your life

Eliminate old credit card debt from your life

A debt management company will offer plans that can do several things to help with credit card debt. They will be able to help create a repayment plan that will satisfy both the debtor and the creditor. This means that all collection calls will stop, and a person will begin to live easier without the constant hounding of bill collectors wanting to know when they are going to get their money. In most cases, there is no answer to give because a debtor simply does not know how the money will ever be paid back. Debt management companies provide a solution to this problem.

Rescue One Financial has a working relationship with all of the major credit card companies, so they have the ability to negotiate in ways that will result in less debt, interest, and fees for the debtor. They are often able to waive late fees and fees charged for being over the limit. This will lower the total amount owed. Interest rates can also be negotiated and lowered. All of this will result in a lowering of monthly payments. In effect, what they are doing is calling time out on a consumer’s debt and giving a person a chance to catch up and then pay down their bills.

Credit card companies are willing to listen to what a debt management company has to say because they know how badly a person’s finances are when they turn to one for help. Using a debt management company shows a credit card company that the debtor wants to pay back the money they owe; they only need a little help in doing so. This is a strong motivation for a credit card company to work with a debt management firm to create a plan to pay off the debt.

There are many questions that a person will have before they will want to commit to this type of repayment plans, and if you would like more information, you can contact Rescue 1 Financial today.

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How Debt Settlement Can Help Pay Off Large Credit Card Debt

Many consumers today are struggling with credit card debt. Since these cards are widely available, many people make the mistake of taking out several of them and maxing them out without being able to pay them back. It is not uncommon for consumers to be more than $20,000 in credit card debt with interest rates as high as 23%. This can make for very high payments each month that consumers simply will never be able to pay. Rather than declaring bankruptcy, consumers can consider settling the debt. Below is an overview of some advantages of settling credit card debt.

howdebtsettlementcanhelppayofflargecreditcarddebtAvoid Bankruptcy
Bankruptcy can be a traumatic process that can make it difficult to get loans in the future. Rather than spending thousands of dollars to declare bankruptcy, consumers can hire a debt settlement company, like Rescue One Financial to guide them through the process of settling their debt. When credit card debts are settled, Rescue One Financial works directly with the credit card company to reduce payments to an amount that the client can afford. If possible, credit card companies would like to avoid the expenses associated with bankruptcy as well.

Maintain the Right to Declare Bankruptcy
Another big advantage of avoiding bankruptcy protection for credit card debt is the ability to exercise the right in the future. Individuals who choose to declare bankruptcy will be unable to do so again for another seven years. In the event that more debt is accumulated, consumers will have no protections available to them for nearly a decade. This could be much more costly than even a higher monthly payment related to credit card debt.

More Affordable Payments
Consumers who settle their credit card debts can usually get more manageable monthly payments that they can afford. This can more than justify the expenses of going through the process since interest rates can be reduced and amounts owed can be cut down. Rather than dealing with wage garnishments or collections agents, consumers can make affordable payments and gradually pay down the debt.

Improved Credit Score
Once the credit card debt has been settled and consumers are able to make their payments on time, their credit scores may gradually improve. Many people struggling with credit card debt have poor credit scores which can make their lives difficult. Consumers can benefit in the long run by making these payments on time and thereby increasing their credit scores. By doing this, consumers can avoid these issues repeating themselves later and can look forward to a bright financial future.

If you’re unsure of where to start, seek help with the experts at Rescue 1 Financial who are always standing by.

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How to Qualify for Debt Settlement

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Debt settlement is a process in which a creditor agrees to settle a debt for a portion of the balance. In other words, the debtor only has to pay back a certain percent of the balance on an account, and the creditor will forgive such an account. Debt settlement is different from debt management because a consumer pays the credit assistance company and that person then pays all the creditors. In a debt settlement situation, the debtor pays the creditors, and the debt settlement company charges the debtor for its services. The fees may be a certain portion of the saved debt amount.

Come to a mutually satisfactory agreement and settle debt

Come to a mutually satisfactory agreement and settle debt

How to Qualify for Debt Settlement
To qualify for debt settlement, a debtor must have enough funds to pay back the debts once the counselor negotiates for the reduction. The debtor should have a separate bank account for all funds that he or she intends to submit to creditors for the debt settlement amounts.

A person who wishes to qualify for debt settlement should have at least $7,500 in total debt. Anyone who has less than that amount of debt can try alternative options such as negotiating with the creditors alone.

The applicant must have unsecured debt. Unsecured debt is any credit account that is not secured by an asset such as a car or home. Examples of unsecured debt are credit cards, medical bills, utility bills and personal loans. Student loans and tax debts do not qualify for this program.

A debt settlement is only available in certain states in the United States. Additionally, the debt settlement can differ greatly from one American state to another. For example, a consumer can apply for debt settlement in Florida. The state of Florida also has many laws in place that protect the debtor against wage garnishment, harassment and bank account seizure.

Getting Help with Debt Settlement
If you feel as though you qualify for debt settlement, then you can have a reliable company, such as Rescue One Financial, help you with the process. Rescue One Financial will explain the process in a manner that you can fully understand. A representative will offer to negotiate with the creditors for you. Negotiation is something that you can do yourself. However, debt settlement companies have personal relationships and experience with the creditors. Therefore, they have more leeway for negotiations. Contact Rescue 1 Financial today to learn whether debt settlement is an option for your financial situation.