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Options for Debt Consolidation With Bad Credit

rescue one financial debt consolidationIf you are considering debt consolidation as an option for dealing with your consumer debt issues, the chances are that your credit rating and debt/income ratio are sitting at less than ideal levels. In fact, you might be considered to have bad credit. If this circumstance sounds familiar, you are probably wondering how you could possibly secure a debt consolidation load with such poor credit.

Finding Debt Consolidation Options With Bad Credit
There is no point in kidding yourself. Trying to secure any type of loan is going to be difficult with bad credit, especially since the recent recession created so much financial instability, causing lenders to tighten requirements. With that said, there are some options you might want to consider. The challenge is to become as creative as possible and investigate every possible alternative.

Options for Debt Consolidation With Bad Credit
Given your current credit status, you are going to have to accept the fact you may have to accept loan terms that are less than ideal on certain types of loans. The following options are listed in order of preference.

  • Home Equity Loan – If you have built-up equity in your home, you may be able to secure an equity loan even with bad credit. The catch is that lenders are going to require you to have significant equity to the tune of 20%-40% of the current appraised value. Given the recent depletion of home values caused by the recession, this might be a difficult number to make.
  • 401K and IRA Loans – If you have a 401K plan with your employer or a personal IRA account, there are provisions that will allow you to take out loans against you account balance. The interest you pay is paid to your account and the amount borrowed in only taxable if unpaid within the terms of the loan agreement.
  • Secured Personal Loan – If you have other assets such as jewelry, a car with equity, a boat, expensive furniture, stocks/bonds or other financial instruments, you may be able to obtain a personal loan from a finance company. You need to be aware that they will most likely require security in excess of the loan amount and the interest rates may be on the high side.
  • Payday Loan In an absolute emergency, you can usually get a payday loan if you have stable employment. Contrary to belief, there are payday loans with terms ranging from 6-12 months. However, these loans carry insane interest rates and the collection process for delinquent loans is very aggressive.

If you would like more information regarding certain types of debt consolidation loans that are available for persons with bad credit, you can contact one of our professional debt counselors at Rescue 1 Financial. They have been trained to assist clients with consumer debt issues and help them secure financial stability.

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How Debt Consolidation Can Help You Be Debt Free

rescue one financial debt consolidationIt doesn’t take much effort to sit down and evaluate your debt status. The higher your consumers debt, the more stress you are probably experiencing. You shouldn’t feel bad because you are not alone. As a 2014 Federal Reserve survey points out, Americans owe $793.1 in credit card debt. That averages out to $15,799 per household. For 14.7% of those households, that number represents 40% of their annual income.

The Elusive Manageability of Consumer Debt
For many individuals, the worse part of carrying such troubling consumer debt is the stress and aggravation that comes with trying to cope and deal with creditors and the worry that comes with trying to find a way out. If you find yourself in this situation, you have most likely wasted hours opening mail, writing checks and dealing with credit collection personnel. Maybe you have even reached the point where you have shut off your cell phone, refuse to open your mail and obsess with finding money to pay off your debt. Either way, there are viable solutions to your problems.

Debt Consolidation
If you want to alleviate debt fast, you always have the option of bankruptcy and debt settlement. However, both of these options come with some rather stiff side-affects, including long-term damage to your credit rating. The most responsible and least damaging option is securing a debt consolidation loan. With this type of loan, you will be able to get relief from creditors while paying off all of your consumer debt in a more manageable way.

How Debt Consolidation Can Help You Be Debt Free
The advantages of choosing a debt consolidation loan are more than enough to bring you peace of mind. They include:

  • Securing a lower interest on all or most of your outstanding debt. The interest rates on debt consolidation loans are usually significantly lower than those charged by credit card companies. By lowering the overall rate, you will experience significant savings and halt the expansion of your debt.
  • Reducing the paperwork and need for communication with aggressive credit collectors. With only one bill to open and pay, the time savings figures to be significant.
  • Elimination of late fees and penalty, which can add up in a hurry.
  • Save your credit rating by the resumption of regular monthly payments and paying off all your debt in a responsible manner.

If you abide by the terms of your debt consolidation loan, you will find yourself reaching the end of the debt rainbow where you are debt free and reaching financial security.

At Rescue One Financial, our professional debt counselors are available to provide you with information about debt consolidation or assist you in securing a debt consolidation loan. You will find it very rewarding and satisfying to relieve your stress while honoring your financial commitments and saving your credit profile.

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Common Mistakes To Avoid In Medical Bill Debt

The healthcare industry has been under fire for years now because of the escalating costs being charged to patients and insurance companies. Insurance companies simply pass the costs along to customers while patients are left heading to bankruptcy courts all over the US, trying to find a way to cope with both medical bills and rising health insurance rates.

Avoid In Medical Bill Debt

The Impact on Patients
According to information released by The American Journal of Medicine in early 2011, 60% of all bankruptcies were caused by unmanageable medical bills. Even more shocking is the fact that as many as 75% of those people had health insurance. With medical expense advocates estimating that 90% of all hospital bills contain “gross overcharges”, there seems to be little recourse for patients who are left with the choice of paying the bills or destroying their credit.

Common Mistakes To Avoid In Medical Bill Debt
While the options for dealing with excessive medical expenses are limited, there is a list of things you should avoid that stand to only make your predicament worse.

  1. Don’t Run and Hide Medical bills are usually larger than a standard credit card bill and the fervor at which hospitals and collection agencies pursue delinquent accounts is astounding. They can create a lot of stress in your life. The more you avoid them, the more they escalate their efforts because they aren’t going away. Honest communication is the best way to defuse the situation. When they understand your situation, they become much more willing to negotiate and work with you.
  2. Don’t Run to the Bankruptcy Courts Right Away – Bankruptcy should only be considered as a last resort because of the lasting damage it does to your credit profile and rating. You still have options such as some type of debt settlement. Whether you choose to initiate this yourself or enlist the services of a debt settlement company, you may be able to save your credit through negotiations with your provider.
  3. Don’t Refuse to Make a Payment In some jurisdictions, you are afforded protection from collectors and lawsuits as long as you are making monthly payments on time. In some cases, these payments can be as small as $5 per month.
  4. Don’t Accept Bills and Insurance Payments at Face Value – As a patient and insurance holder, you have a right to detailed explanations regarding what is being billed and what is being paid by the insurance company. If things seem unreasonable, they most likely are unreasonable. You can contact advocate groups that will help you battle your providers and insurance company. If people start questioning the process, some providers and insurance companies will take note and offer concessions.
  5. Before you make mistakes dealing with your medical bills, you might want to consider contacting one of our professional debt counselors at Rescue One Financial. They can offer information or assistance in working with hospital and insurance providers to get your bills reduced to a manageable level, giving you peace of mind.

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Is it Time to Shift From Debt Management to Debt Settlement?

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switch from debt settlement to debt managementIt’s a harsh reality that far too many people find themselves facing a debt crisis without fully understanding how they got there. Over the past 20 years, credit cards have become so easily accessible that an estimated 60% of all Americans had a least one of the estimated 1.1 billion active credit cards that had been issued by the end of 2012.

According to Federal Reserve Statistics issued in mid 2014, almost 15% of American households have consumer debt that equals 40% or more of their annual income. As one could expect, this fact is leading to a debt crisis for a large number of households. As these debts are turning into hardships, people are looking for ways to solve their debt problems.

Choosing the Debt Management Option
Many people who find themselves overwhelmed by debt will choose to enter into some type of debt management program. This type of program might come in the form of an informal attempt to manage one’s debt on their own or more likely, the individual might choose to enlist the services of a debt management company. In this type of arrangement, professional debt counselors are assigned to help debtors analyze their financial situation and come up with a plan to combat excessive debt problems. The debt management process includes budgeting and working with creditors to get penalties waved, interest rates lowered and payment amounts decreased. The intent is to help the debtor create a plan that allows them an opportunity to reasonably and responsibly pay off all their debt while removing the stress related to dealing with creditors. If you are one of the people experiencing severe debt problems, this is certainly an approach you should consider.

When Is It Time to Change Strategies?
You should be aware that a debt management program is the best alternative to dealing with consumer debt problems. It has the least amount of impact on your credit rating and affords you the opportunity to meet your obligations in a responsible manner. That said, there may come a time when your debt management program is no longer giving you the protection you need. Factors that could affect the viability of a debt management program are:

  • A change in life circumstance such as loss of employment or injury
  • Continued harassment from some creditors
  • Unintended increase in overall debt or decreased income

If your debt management program in no longer viable, it may be time to take the next logical step and start pursuing a debt settlement process. This process is best handled through your debt counselor. Their new responsibility will be to contact your creditor, explain the situation and attempt to negotiate lower debt amounts and interest rates that are more manageable.

If your debt situation has become unmanageable and you need help, you can contact Rescue One Financial. We would like to match you with one of our professional debt managers who will help you identify the best strategy for dealing with you problem debt in a responsible manner that allows your to find financial stability.


How Debt Management Companies Negotiate Terms With Debt Collectors

For individuals who are struggling with debt issues, the time they devote to dealing with their problems can become a hardship on their lives. Many people, who find themselves in this situation, are usually at a loss as how to alleviate these problems. For those who are considering the services offered by a debt management company, it might be beneficial for them to understand the process of how debt management companies negotiate terms with debt collectors.

how to negotiate credit card debt

Are Creditors Motivated to Negotiate?
The short answer is YES, very much so. While credit card and consumer loan companies expect to be paid, they are realistic about the prospects of being repaid by individuals who are suffering debt hardship. In many cases, creditors are aware that the costs associated with collection efforts and the filing of lawsuits are often best avoided from a fiscal standpoint if they can in fact get some portion of the amount owed.

How Does A Debt Management Company Proceed?
In order to understand how a debt counselor deals with creditors on behalf of a client, a step-by-step process provides the easiest explanation. Note: If a consolidation loan is the best solution, no negotiating is necessary as the creditor will be repaid in full. The purpose of the negotiations is to make an effort to avoid bankruptcy.

  • The first step, and most important one in the process, is to sit down with the debtor and complete an honest review of the individual’s financial situation. It is necessary for the debt counselor to understand the amount of debt owed, the sources of income available to repay debt and the extent to which debt issues are affecting the debtor’s life.
  • Armed with this information, the debt counselor proceeds to contact the appropriate creditors through the creditor’s designated company official to layout the situation.
  • At this point, the creditor will most likely give a clear indication of whether or not they are open to negotiations. Remember, creditors are not obligated to do anything.
  • As as professional debt counselor, they do have a certain bit of credibility with creditors. Therefore, the debt counselor will usually discuss what he feels the borrower is capable of handling in the form of a recommendation. That recommendation might include as little as interest rate reductions only and as much as interest rate reductions plus debt reduction, lower payments and forgiveness of late fees.
  • The creditor then makes a demand and the two parties begin negotiating down to a final resolution when each party feels they have secured the best possible resolution for their respective sides.

At Rescue One Financial, we understand the negotiating process and have an abundance of experience dealing with creditors. Our debt counselors are interested in helping you to create a repayment plan that allows adequate debt relief and gives you ample opportunity to reestablish financial security without the stress related to dealing with ongoing credit issues.

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Have you Considered Consolidating and Eliminating Credit Card Debt

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debt conslidation to pay credit card debtGiven the ease at which people can obtain credit cards, it’s not surprising that they inadvertently get themselves into debt trouble. Americans are currently responsible for over $850 billion in credit card debt. It happens over a period of time as individuals misuse their credit cards to make purchases they can’t afford with the intention of paying them off at the end of the month. As could be expected, those same people only make minimum payments, subjecting themselves to a growing balance and insanely high interest rates.

Looking for Solutions?
If you find yourself dealing with debt issues such as the one mentioned above, it might be a good time to sit down and take a look at your current situation. Credit card debt can create a lot of stress, depression and might disrupt your quality of life. Before you allow your credit card debt to adversely impact your life in this manner, you might want to consider a couple of viable options for consolidating and/or eliminating your credit card debt.

Eliminating Credit Card Debt
Everyone would like to wave a magic wand and eliminate their credit card debt. Unfortunately, it’s not quite that easy. In cases of debt hardship, many credit card companies are willing to take a realistic view of the debtor’s situation. If you feel you are in a hardship situation, you might want to consider contacting a debt resolution service about the prospects of having your overall debt decreased and interest rates lowered. The debt resolution service is able to sit down with credit card company representatives and take them through your specific situation. If they mutually agree your credit card debt is unmanageable at the current levels, the credit card company might agree to discount the debt and decrease the interest rates to enable you to make regular payments that are reasonable and more manageable. Of course, your credit will still be negatively impacted through the process.

Consolidating Credit Card Debt
Another viable solution is obtaining a debt consolidation loan with the assistance of a debt management and resolution service. This differs from the debt elimination process in that the amount owed will be paid in full and the process will have less or no impact on your credit rating. The debt management company typically works to help you apply for a debt consolidation loan. The loan proceeds will be used to payoff the credit card companies, giving you immediate relief from harassment issues. The interest rate on the new loan figures to be significantly lower and the new payment amount figures to be significantly less than the aggregate amount of the separate credit card payments.

There is no sense in trying to navigate excessive credit card debt issues if it is damaging your quality of life and creating an extreme hardship. You can contact Rescue One Financial. We would love the opportunity to set you up with one of our professional debt counselors who are qualified to help you find a solution to your credit card debt issues, giving you a chance at returning to a normal way of living.


5 Debt Collection Mistakes to Avoid

Regardless of how conscientious you may be with your finances, you may still have to face a debt collector at some point. It could be a medical bill that you thought had been paid by the insurance company that ended up in the hands of a collection agency. It could be a case of mistaken identity or a debt that you paid many years ago that a debt collector is attempting to collect for a second time. When you are contacted by a debt collector, be sure to avoid these five common mistakes.

debt collection mistakesDiscussing the Debt Over the Phone
When you answer a call from a debt collector, inform them that you will not discuss the matter over the phone. Once you have informed them that all discussions must be in writing, they must cease contacting you by telephone. Request the name of the person you are speaking to and their title, along with the company name and mailing address. Inform the person on the phone call that you will be sending a certified letter to them requesting verification of the debt. You can explain that the letter will outline what constitutes verification and will have a deadline for when you must receive the information. By law, the debt collector must provide you with the information for you to send you a verification letter. If they refuse, tell them that they are violating the Fair Debt Collection Practices Act by refusing to provide the information. If they continue to refuse, hang up the phone. Follow the same practice each time they call, and document the dates and times of the call.

Provide Personal Information
Never provide identifying information such as your social security number, address or place of employment to a debt collector over the phone. Many times, the debt collector does not have that information and by supplying it, you have given them the ability to report the debt to credit bureaus or to use it as a way to “validate” a debt that is not yours. When a debt collector attempts to verify your personal information, explain to them that you do not provide such information over the phone and that they will have to send their request in writing. In addition, do not accept a computer printout that simply shows your name, social security number and the amount of the debt. Although this basically is all that is required by the Fair Debt Collection Practices Act, they are not considered valid by courts. Insist on your original, signed contract as the only verification that is acceptable.

Making Payments on Old Debts
Every state has a statute of limitations on debt collection and many debt collectors will use threatening tactics in order to get you to pay the debt even when they can no longer file legal action against you. By submitting a payment, the statute of limitations is reset and a missed payment can open you up to a lawsuit or wage garnishments. If you pay with a check or automatic bank draft, the collection agency also has your account numbers and can remove money from your account without your permission. Although this is an illegal tactic, many unscrupulous agencies still do it. Check the statute of limitation on debt collection in your state before making any payments on debts that are more than two years old.

Not Keeping Good Records
The Federal Trade Commission has a complaint process for those who have been the victims of unscrupulous debt collectors. However, in order to file the complaint, you must keep records of the violations. From the first time you are contacted by a debt collector, keep a phone log of when the calls were made and how often as debt collectors are restricted regarding the times and how often they may contact you. Keep notes that include the name of the person you spoke to and what was said, especially if the collector was abusive, harassing or deceptive. Be sure to keep all written correspondence between you and the debt collector as well.

Ignoring the Calls
As much as you don’t want to deal with a debt collector, ignoring the calls will not make them go away. If nothing else, exercise your right to receive verification of the debt. By ignoring the phone calls, you risk a debt collector filing a lawsuit, even if they are legally blocked from doing so. Although a judge may throw the lawsuit out as the statute of limitations has passed, it will still mean a day off of work and possible attorney fees.

By avoiding these simple mistakes, you may be able to stop the debt collector from calling and possibly avoid paying a debt you don’t owe or is uncollectible. IF you need help getting out of debt contact Rescue One Financial we can help.

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Types of Debt that Cannot be Forgiven

types of debt that cannot be forgivenIf you’re struggling every month to pay the bills, then bankruptcy may provide you with the fresh start that you need. When you sit down to review your bills and how much you can save, it’s important to remember that not all debts can be forgiven through the bankruptcy courts. Understanding the law will help prepare you to take the next step.

Student Loans are Forever
When you’re trying to get through school and decide to take out a student loan, bear in mind that these debts cannot be written off in a typical bankruptcy. With more than 70% of college seniors graduating with an average $29,400 in student loans, there’s no doubt that several people every year will find themselves in this position. It is possible to have some student loans discharged if you can prove that you’re unable to work due to a total disability, but the standard is very high and most people won’t be able to meet the requirements.

Child and Spousal Support
You can file bankruptcy on credit cards and unsecured debt, but the money you owe to your children or former spouse will remain. This is a double-edged sword. It serves to protect people, but it can cause a real hardship for you if your income levels have dropped and you’re no longer able to meet those payments.

Secured Debt
When a lender has an asset that secures the loan, such as a house or car, they’re not going to let you keep the asset without paying the debt. You can choose to turn the item back in, but you’ll have to pay the balance between the current sale value and the amount that you owe. The good news is that this balance can be written off in the bankruptcy, but you’ll still have to give up the item. Is it worth it?

Fees and Debt Paid for Another
Agree to pay off debts in the name of your ex-spouse with caution because you cannot have them forgiven in a bankruptcy later. While it may be allowed to go through in some cases, your ex-spouse can go through the courts to have you ordered to pay those debts.

Income Taxes and Restitution
Where the government is concerned, debt forgiveness is not an option. If you owe money on income taxes or court-ordered restitution, you won’t find relief from those debts through bankruptcy.

There is a silver lining amidst all of this dark news. Even though these debts cannot be forgiven, there are still options available for dealing with them. In the case of student loans, you can work through your lender to learn more about available programs that will lower the monthly payment. Secured debts may be restructured in some cases, so you’ll take longer to pay them off while still keeping the asset. With the other debts, attorneys or resolution companies like Rescue One Financial may be able to negotiate on your behalf to have the balances lowered. By taking advantage of all the options open to you, it’s possible to get control of your finances again even without filing bankruptcy.

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5 Tips on How to Get Out of Debt on a Limited Budget

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reduce your debt with help from Rescue One FinancialWhen you have high debts to pay off, it’s essential to pay extra on each debt. However, this can be a challenge when you’re living on a limited budget. The good news is that you can take control of your situation even when money’s tight. Here are some tips to follow to help you get control of your expenses and start bringing them down.

Work One at a Time
The average American household has credit card debts totaling more than $15,000. The debt is usually comprised of a few different cards, so it’s important to have a plan for paying off the debt. The most effective system is to write down each debt, including the amount owed, the monthly payment and the interest rate. Choose the smallest debt and put any extra funds towards paying it off. Once that debt is cleared, you can apply that payment plus any extra amounts towards the next card on your list. If you have a wide range in interest rates, it’s smart to focus on the highest-interest card first.

Time to Cut Costs
You need to come up with extra money to pay down the debt, and that means either increasing your income or reducing your expenses. You may not be able to take a second job, but you can find other expenses to eliminate. Keep track of spending for a month to get a better feel for where your money is going. The morning latte on your way to work may be costing you more than you think, and you will see other patterns that can lower expenses. You can also talk to your cable company about discounts or lowering the bill, switch to a cheaper phone provider, and make other changes to lower your utilities.

Embrace Cash
Debt will never disappear as long as you continue to create more of it. You will have to stop charging and switch to a cash basis. If you don’t have the cash in your account to make the purchase, then you’ll have to go without it or save your money for it. This is where an emergency savings account comes in handy so that you can cover car repairs and other necessities that arise.

Talk to Your Lenders
Making a phone call can sometimes make a big difference. Talk to your credit card companies to see what you need to do to lower interest rates or it they can offer other assistance. It only takes a few minutes with each company, and you might be surprised at the options and suggestions they have.

Request Help
Don’t be afraid to turn to the professionals for assistance. Consumer debt went up 11.5 percent from 2013 to 2014, so you certainly aren’t alone with this struggle. Debt management companies like Rescue One Financial may be able to assist you if you’re living paycheck to paycheck and falling further behind. Financial advisors can also help you pinpoint your areas of weakness so that you can get in control of your finances.

It will take a little more work and sacrifice right now, but it will be worth it in the long run to avoid the high interest charges every month. You’ll be able to use those monthly credit card payments to fund your retirement or just enjoy life more.


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.