1. Hope for the best and do nothing
Creditors would like nothing more than for you to pay a lifetime of monthly payments. Besides not lowering your principal balances, did you know…

• Interest rates usually average over 18% and creditors can raise rates at any time.
• If you make minimum monthly payments on $10,000 (at 18% interest), it could take 33 years to pay it off!
• Over the first 3 years, you'll pay nearly 50% of your original balance in interest alone!
• If your rates are 25% or higher, it is mathematically impossible to pay off your debt by making minimum payments.
• You will take 20 to 40 years before becoming debt free with little room for obtaining additional credit.
• If you've already stopped making payments, you are destroying your credit while not eliminating any of your debt in the process.

2. Debt Negotiation and Settlement Program

• Negotiations are typically based on principal balance, irrespective of the interest and finance charges creditors add to accounts.
• Almost all are run by independent companies, not affiliated with your creditors, so they are working for your best interests.
• Typically, clients’ debt(s) are eliminated within 15- 36 months, depending on cash availability.
• Payments are sent directly to the creditor from the consumer, unlike with a consolidation company.
• Improves debt to income ratio (which represents a significant factor in your credit score) faster than Consumer Credit Counseling.
• Total payouts typically end up around 30-70%* of your current balance.
• Rapidly becoming the top method for consumers to eliminate unsecured debt(s).

3. Use Consumer Credit Counseling

• The credit card companies themselves fund some of these companies.
• Some work as another form of 'collection agency', to retrieve your debt.
• Some programs can take up to 5 years to complete.
• Participants often pay over 25% of principal balance in interest fees over the first three years.
• Many charge monthly fees, or 'donations'; typically $20-$50 or more.
• Overall, fees of an average credit-counseling program are often greater than those of a debt settlement programs.
• Under certain circumstances, this may be reported on a participant’s credit report.
• The average completion rate of consumer credit counseling is approximately 26%.

4. Debt Consolidation Loans

• Credit score must be good enough to qualify first.
• Most require ownership of real estate (typically 25 - 30% LTV), or a pledge of collateral.
• Most requires the exchange of unsecured debts for a secured debt - a big risk.
• Home Equity loans reduce future equity available in your property.
• Missing payments could cause loss of the asset (usually your home) that the debt consolidation loan is secured against.
• A transaction fee is usually required upon closing or is built into the interest rates.
• Interest is usually calculated & applied upfront, so even if you are able to pay off the loan earlier than expected, you pay the full amount of interest.
• Added interest makes debt to income ratio worse than before loan received.
• Payback can be 10-20 years depending on debt balance and ability to pay.
• Statistics have found that about 70% of people who obtain a debt consolidation loan find themselves in deeper debt than they were originally within a two-year period.

5. File Bankruptcy

• Both chapter 7 & chapter 13 represent a severe, negative impact on your credit rating for 7-10 years.
• Both can cost up to $2,500 to file.
• Both may have a negative impact on your employment status.
• Both may result in higher interest rates on credit cards, car loans, etc.
• Both carry a negative stigma, mental stress, and other burdens.
• In a Chapter 7, all of your unsecured debts are eliminated, but it is much more difficult to qualify for under the new bankruptcy laws.
• In a Chapter 13, you may end up paying 75 - 100% of your debts back.
• In a Chapter 13, the courts determine what you can afford monthly.
• Chapter 13 completion rates average at only 32%.

Before making this important decision, please contact one of our certified debt specialists to explain our program, and as always, if you are looking into any other services, we advise you check with the Better Business Bureau, and also see if the company is licensed, bonded and insured.

* Settlement estimates of 30 - 70% are examples of past performance and are not intended to be a guarantee of future settlement results. Results may vary based on individual circumstances.

Client Testimonials

Let me express my thanks to you for having such an agency to help clients such as myself get out of debt. So keep up the good positive work that you are doing for people like me. Please share with my case manager.

Sincerely,
Susan B

I have dealt with many people in different types of business and a large majority of them do the bare minimum. You seen detail oriented, and you take pride in your work. I am glad that you are handling my account. Thank you so much for your help.

Donna B

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