Difference Between Bankruptcy and Debt Settlement

If you are looking for a debt relief program that will provide the most reduction on your debt, your options include debt settlement and bankruptcy. Both of them are effective in their own right. The thing about any type of debt relief program is you have to know our financial capabilities first before you opt for any of them. Believe it or not, there is a program for your unique situation.

Assuming that you want most of your debt forgiven, let us analyze bankruptcy and debt settlement so you can determine which one is best for your specific debt condition.

Bankruptcy is something that you file in a bankruptcy court. When your expenses is bigger than your income and you have nothing to pay for your debts, then this is an option that you can take. It used to be just Chapter 7 - wherein your debts are discharged after qualified assets are liquidated. Now, Chapter 13 is what scares a lot of debtors because it involves a repayment plan that the court will impose and make sure that you comply.

These two options implies that you can’t just file for bankruptcy now. You need to be eligible for it. The means test will help the courts determine which chapter you fall into. If your income is not lower than the median salary of the state where you filed, you will automatically be considered for Chapter 13 bankruptcy. But if you are proven to have lower financial capabilities and a salary that is below the median range of the state, then you may be eligible for Chapter 7.

Chapter 13 is the reason why debt settlement became a better option for some people. It may involve a higher repayment plan but the credit score effects will not be as severe.

Both of them will have drastic effects on your credit score but bankruptcy will give the most damage. The minimum effect of bankruptcy is estimated at 200 to 250. So if your score started at 600, that can go down immediately to 350. In debt settlement, it can be as low as 50 points.

Debt settlement involves a process wherein the debtor will negotiate with the creditor for a lower payment plan. It is usually a lower amount than the outstanding balance. The idea is, when you have paid for the agreed settlement amount, the rest of your debt will be forgiven.

Ultimately, you will know the right option if you know how much you are capable of paying for. If you wish to pursue bankruptcy, make sure you are ready for the repayment plan that may be imposed on you based on the requirements of Chapter 13.

If not, know that debt settlement can effectively get you out of debt. Whether you decide to work with a professional or not, National Debt Relief can assist you with any questions that you may have about this type of debt relief. Know if debt settlement is the answer to your credit problems here: http://www.nationaldebtrelief.com/debtsettlement/.

Can You Consolidate Debt Without a Loan? Of Course!

Debt has been around for ages and we have constantly come up with different strategies to get out of it such as when we consolidate debt. Usually having more than one debt, one of the approaches to getting out of it is consolidating all of them by getting one loan to pay off everything. But to some people, this basically is just transferring your debt from one hand to the other.

Debt consolidation does not limit itself to this strategy only. There are other ways to consolidate debt without taking out a loan.

The first approach is balance transfers. Most of our debts are tied to our credit cards and we normally have more than just one card with payables in all of them. Balance transfer is as simple as it is called, you can exercise the option to transfer your payables from several credit cards to just one. In a way, you are consolidating your debts into one card. Just take advantage of promos such as 0% balance transfer for and make sure to transfer to that one card with the lowest interest rate.

Another way to consolidate debt is to hire the services of a debt consolidation company to make the payments on your behalf. Consider this if you are still able to make the minimum required payments on your payables but want to get rid of the need to cut cheques every month to different creditors. Referred to as debt management, what the debt consolidation company will do is collect the total amount of your monthly payables and ensure payments to each creditor monthly. You just have to make one payment over to the company that will consolidate debt payments for you.

One more option is what the industry refers to debt settlement. Consider this if you are unable to meet the minimum monthly payment on your financial obligations. Your credit counselor can help you broker a deal with your creditors to request for a decrease in your payment. Once your counselor proves you have insufficient income to meet their payment and agrees to this agreement, your credit counselor will ensure that you are able to make the new and lower monthly payment.

These are your alternatives to consolidate debt. You just have to chose the most suitable one that you can work with while considering your financial capability.

Debt consolidation offers various programs that are all effective. However, you need to analyze which one is best depending on your financial capabilities. Go to this link for more info: http://www.nationaldebtrelief.com/debt-consolidation/.

Work From Home to Pay Off Debt

The American economy is steadily improving and that can be seen through the lower unemployment rate. During the recession, people were saved by work from home jobs that allowed them to earn a regular income through remote projects.

This type of career is actually a good because it provides the opportunity for proportional income. It means that the more you work, the more you earn. What you get at the end of the day is the actual output of your work - not just an estimation based on how much time you are in the office or work location.

With all the debts that burdened everyone, remote work came as a welcome relief to pay off credit obligations. It provided opportunities that were too great to pass up. In fact, there are some who never returned to their 9-5 jobs. Work from home gave them even more than what they earned before.

Thanks to the advancement of technology and the Internet, web-related careers sprung from nowhere.  Suddenly, being a web developer, an online graphic designer virtual assistant and online writer can be full time jobs. You also have affiliate and Internet marketing jobs that needs the right person to fulfill their various tasks.

The emergence of social media networks, online stores and other web-based marketing portals provided the push for companies to take their businesses online. There are concepts like the search engine optimization techniques that you have to get used to as you will need that as your primary focus in promoting the online sites that you need to market.

Given this, skilled individuals are needed to work on them. As web-based careers, these are perfect remote work opportunities. If you have the right skill, you can take on projects to help businesses in their Internet campaigns.

You don’t have to cut back on your spending to be able to afford paying off your debts. You can always learn how to make money online to help finance your debt payment fund. As long as you find the right type of job, you should be able to make your debt payments just fine. Read more about money making from National Debt Relief.

How to Choose Between Debt Consolidation Loans VS Debt Settlement

 

Getting out of debt can happen via different programs. Two of them are debt consolidation loans and debt settlement. Both are effective in their own right but that depends entirely on your financial capabilities. These two debt relief options cannot help all types of debtors. There are differences that you need to be aware of so you can identify which one is right for you.

To answer the question presented in our title, let us focus on how you will find out if debt consolidation loan is better than debt settlement.

First of all, you need to check your income versus your expenses. If you have more income over your monthly expenditure, then you can get a loan to pay off your other debts. You can help increase that difference further by lowering your spending to increase your disposable income (which is where you will get your debt payment fund). If your expenses are more than your income, then you have to resort to debt settlement.

To be able to make debt consolidation loans work, you need a steady income. This is actually a requirement of the lender. No one will give you a loan if you don’t have a steady income as proof that you can pay back what you are borrowing.

While it is not really a factor in the disapproval of a loan, a good credit score will help you maximize the benefits of a debt consolidation loan program. Like in any type of loan, it helps in getting a low interest rate. A person with a low credit score is perceived to be a high risk borrower. That automatically gives you a high interest rate on your loan.

Consolidating your debts through a loan will only result in a minimal reduction in your monthly debt payment. If this is alright with you, then you can proceed with this debt relief option. The reduction will come from the lower interest rate that this program will bring your current credit obligations. So if you cannot find a loan that has a low interest rate, then this might not be the best option for you. Not only that, if you need a significant deduction on your outstanding balance, debt settlement is best for your case.

If you are also concerned about your credit score being affected by your debt relief efforts, debt consolidation loans have the lesser impact compared to debt settlement.  You can choose the former so your credit score will not decrease extremely.

To find out if consolidation loans can help you manage your debts, visit National Debt Relief. Eliminate your credit card debt through the help of our debt relief professionals. Give us a call - the first consultation is free of charge and holds no obligations.

Ideas for Your Debt Reduction Resolutions for 2013

As 2012 comes to a close, you may be starting to draw up your resolutions for 2013. If you are struggling with your mounting debts and you wish to once and for all do something about it, you may want to create a separate list for your debt reduction resolutions next year.

Here are some suggestions for your debt reduction resolutions for 2013.

One of them is to choose a debt relief program. This does not mean you should hire a third company but a professional can really help out. The bottom line is to come up with a plan to tackle your debts once and for all. You have various choices before you and all of them are effective. It is important that you consider your financial capabilities before you truly set your heart on one debt reduction program.

Making a firm stand to spend only cash is also another resolution that you can add to your list. It will help you discipline yourself so you will avoid incurring more credit card debt. This is a very powerful tool that allows people to live beyond their means - another resolution that you should work on.

Resolution number three on your list is to start living within your means. This implies that your expenses should be lower than what you get every month. This can mean restricting your use of credit cards and making sure that before using it, you have the cash on hand to pay for the bill in full when the statement arrives.

Creating your personal budget plan will help you achieve this. That is resolution number four. A budget plan will allow you to see how your income is being spent, and how much of it goes towards paying off your debts. If you think that there are expenses that can be stopped and funds directed to your debt payments, then it can be identified through a well constructed budget.

If your budget shows a higher debt to income ratio, you can add to your resolution list the growth of your income. Get a second job, set up a passive income generator, or capitalize on a hobby to make extra money. These are only some of the things that can help you increase your monthly cash inflow.

Saving and increasing your emergency fund is also a good resolution to have. This will ensure that when something unexpected happens that requires a huge amount of money (e.g. job loss or medical bills), you don’t have to borrow to be able to afford the necessary expenses.

Lastly, make a decision to always check your credit score. As you are going through a debt reduction program, your credit score will take a hit and it has to be repaired if you truly want to enjoy debt freedom. Add this to your growing resolution list.

Ultimately, your resolutions can only make a difference in your life if you choose to follow through diligently. Discipline yourself and work on making your resolutions a regular part of your life this coming 2013.

If you wish to know more about debt relief, compare the top debt solutions by visiting the National Debt Relief website. You have various options like debt management, debt consolidation loans, debt settlement and bankruptcy. Talk with a debt professional now. The initial consultation is free and there are no obligations upfront.

Tips to Increase Your Cash Inflow for Debt Payments

If you have a high debt to income ratio and you want to afford your debt payments without damaging your credit score, the only option for you is to increase your disposable income. This income is the amount that is left of your salary after removing the expenses for your basic necessities. This is where you will get your debt payment fund.

There are actually two ways for you to increase your disposable income. One is by cutting back on your expenses and the other is by literally increasing your income to add to the extra that you need for credit payments. Your choice will actually depend on your personal preference as any of the two are very effective.

If you have the strength and perseverance to work more, then the latter is your best bet. There are many ways to increase your cash inflow. Here are some ideas that you can consider.

Work longer hours.
If your work can accommodate it, you can ask your employer to allow you to work longer hours and pay you overtime. If you work in shifts, you can probably request that you work at night so you have higher income rates. Or you can ask to work double shifts once or twice a week. You can also request for new projects that are still on the shelf for lack of manpower who has the time to do it.

Get another job.
In case the type of job you have will not permit longer hours (or the company simply cannot afford it), you can always find another job to gain more salary. Look for an employer who can hire you part time. This season, a lot of retailers will be looking for temp personnel to help with the holiday rush customers. See if you can find work in this industry.

Browse the Internet for a Job.
Remote work popularity came at a really great time and this is one option that you can look into. The great thing about this is you can earn income while you are at home. If you are an accountant, you can offer your services to a small business in another country. Or you can look for an online company who provides this service and you can apply to be a member of their roster of professionals. Writers, photographers, web developers/designers and graphic artists can find a lot of opportunities online.

Capitalize on your skills/hobby.
If you can bake, cook, paint, sculpt or whatever hobby that you like to do in your spare hour, capitalize on that. Join the weekend market or sell your products online. These are some of the things that can help you earn while doing something that you love to do.

Sell unwanted/unnecessary/old possessions.
Clean out your house and see if you have items in your home that is just lying around and does not necessarily have any sentimental value, let them go. Sell them online or during a weekend garage sale. Not only will you remove the clutter from your home, you can earn from that too.

Offer your services to family, friends and neighbors.
If you love tinkering in the garage, can do decent gardening duties, these are some of the things that you can offer to do for your neighbors for a certain fee. If you are a stay at home mom, offer to look after the children of your neighbors while they are at work. Instead of hiring a babysitter, they can drop off their kids to you and you can take and fetch them to/from school.

Be creative in choosing how you will earn more. This will take time off from your personal and social life so make every second count.

If things are not working out, maybe you’d like to consider other debt relief alternatives that will help reduce your balance. You can always rebuild your credit - as long as you don’t put yourself in debt once more.

If you wish to know more, visit National Debt Relief to compare top debt solutions like debt management, debt consolidation loans, debt settlement and bankruptcy. Talk with an expert for free and work on the best solution to your credit problems.

Choosing Between Two Types of Debt Consolidation

Contrary to popular belief, debt consolidation does not only involve taking a loan to pay off all your other credits. It is a general term that describes a debt relief option that allows the debtor to concentrate on one payment channel for all their debts. That is literally a method of combining what they owe several creditors so your payments only go to one destination.

There are two ways to achieve this. One is already mentioned: debt consolidation loans. The other is through a program known as debt management or credit counseling. Debt settlement, although in essence combines your payments into one, it is still too different because of the reduction goal.

The two types of consolidation are both effective forms of debt relief. They have the same goal of reducing the monthly payments through a lower interest rate and the elimination of different charges. They also have the same qualification wherein you have to possess a steady and stable source of income to pay off your debts.

Debt consolidation loans as previously mentioned, will involve a big loan that will help pay off your smaller debts. Though effective, some financial experts frown on this debt relief option because it is, afterall, illogical to pay a debt with another debt. It is like covering a hole by digging another one. But nevertheless, there are people who have found debt relief through this option.

The thing about these loans is you need to have a good credit standing or a collateral to be able to avail of a low interest rate. If the loan you will get is equal or more than the combination of what you have right now, going forward with the loan will defeat the whole purpose.

If you cannot avail of the ideal loan, then it might be more practical to go for a debt consolidation program.

This program is also known as a debt management or credit counseling program. These are third party companies who will help educate you of your options to get rid of your debts. You will be assigned a credit counselor who will help you negotiate with creditors for a lower interest rate. They will also work with you to waive off any penalties and charges that credit card companies are notorious for.

The great thing about this program is the credit counselor will help you come up with a debt management plan that will serve as your roadmap throughout your debt relief endeavor. This will provide you with guidance and direction as you pursue a debt free life.

You can choose either option and it is no doubt that debt consolidation can be the answer to your debt problems. If you wish to know more about it, click here. You can also compare different debt relief options here: http://www.nationaldebtrelief.com/which-debt-program-is-best/.

Get Rid of Debt Through the Snowball Method

If you are one of the lucky few with a steady income to pay off the minimum of their debts, you can possibly adapt the Snowball Method. This is a debt payment approach that will point you towards paying the debt with the smallest balance first. It is not like the Avalanche Method that prioritizes the high interest rate credit obligations.

Financial experts like Dave Ramsey prefer the snowball method because it has the most success rate compared to the other. Since the debtor is prioritizing the debt with the smallest balance, the morale will be boosted much earlier through the satisfaction of a debt completely paid. In comparison, the other method may take longer since the concentration will be on the debt with the highest interest and may or may not be the one with the smallest balance.

The belief that the early taste of success provided by the snowball method has a higher chance of motivating the debtor to go on and work on the next debt. It provides more psychological benefit in putting the right attitude and perspective into the debt relief effort. It will definitely be slow going at first but it builds up momentum as more debts are paid off.

To use this debt payment approach, you need to list down all your debts (literally!). Include the amount of debt owed, the creditor, the remaining balance, minimum payment, interest rate and other fees and charges. Arrange the debt from lowest to highest - the topmost spot is given to the one with the lowest remaining balance.

After you have listed down everything, get your monthly income, remove all the basic necessity expenses (food, rent, utilities, clothing, transportation, etc) and you will get your disposable income. This is what you will divide among all your debts. Distribute that income to pay off the minimum of all your credit obligations. Whatever is left will be added to the debt on the topmost part of your list. When that debt is paid, you will get the amount allotted for that and you will add it all to the second debt on the list. After completion, you will add the payments from the first and second debt to the third - until you have fully paid all your debts.

Some people prefer the other payment method because the idea of tackling the high interest debt first will lower the total interest that they will end up paying. However, this will only prove to satisfy the logical thinkers and those who have the right amount of discipline and perseverance. But if you think that you need the early motivation, you should be safe with the snowball method.

If you wish to see other options, go to National Debt Relief to compare other debt solutions. You can choose between debt management, debt consolidation loans, debt settlement and bankruptcy. Talk to a debt relief expert with no obligations - the initial consultation is always free.

How to Pay Your Debt When You Have No Job

Losing your job can be quite scary - especially when you have so much financial obligations. When you are saddled with debt and you find yourself without a steady income to even provide for your family, you lose all hope.

No matter how bleak the situation may be, you need to keep your wits together and find out how you can rectify the situation. As devastating as it may be at this moment, hope is not lost because there are ways for you to pay your debt even though you have no money.

Filing for bankruptcy may be the fastest course but depending on the amount of debt that you have, try to see if you can grow your income first. There are options apart from bankruptcy and knowing the severe effects of that on your credit score, it pays to consider the alternatives.

On top of your list is to find a new source of income. Even people who are physically incapacitated but still has a sharp mind and full use of their hands to type can actually get a job online. It takes a bit of patience and determination but there are ways to get money to pay off your debts.

We’ve mentioned one of them already - getting an online job. If you are a writer, then the path is clear for you - be a freelance writer. The millions of websites need a form of content and not all site owners can string two words coherently. At least, most of them need help at it. Another job that you can look into is photo trading. If you have a decent camera, take beautiful photos, upload them and sell the rights to use them. A graphic artist can do the same for their artwork creations.

You can also sell some of your stuff. Things that you have acquired over the years and you no longer need can be disposed of for profit. What you think is not needed may be someone else’s treasure.

If you lost your job, you need to rearrange your budget so you can live within lower means. Move to a smaller house or trade your fancy car for a cheaper one. Trade dates with a more economical walk in the park.

Of course, if you have no job to help pay your debt, you should inform your creditor. Let them know that you want to pay off what you owe but you have no income to support the payments anymore. They may force you to pay at first but if they find the sincerity in you, that can change their minds.

It pays to look into the different debt relief options like debt management, debt settlement, debt consolidation loans and bankruptcy to help with your credit obligations. Talk with a National Debt Relief expert. No obligations and the first consultation is free.

How Your Creditors View Debt Settlement

While it is usually advised that you hire a debt professional to help with settling your credit obligation, this is something that you can do yourself. Negotiating with your creditors is not impossible for an amateur, but you do need to know what you are doing.

You need to read about the laws that protects you from bad collection practices. These are in the Fair Debt Collection Practices Act or FDCPA. You also have to know the whole process of debt settlement too. These will help you significantly in creating a strategy for debt negotiation.

However, one important factor that you also need to look into are your adversaries: the creditors. One of the reasons why debt professionals have more chances to arrive at a settlement is because of their knowledge about the industry and the creditors they are dealing with. You have to understand who you are negotiating with and where they are coming from.

It is important to remember that creditors and even collectors are not the bad guys here. In retrospect, the consumer is for not being able to pay off what they owe. Given that, you need to remove that adversarial notion about them. It is their every right to collect what you owe. The only thing that they should not do is be abusive about it.

Creditors view your loan or credit card debt as an investment that they need to profit from and thus collect. They are usually part of a bigger organization of banks, and other financial institutions. Their main priority is to make sure that their parent company and all its shareholders will not suffer from the losses involved when you do not pay back your debts. When a significant number of debts and amount is charged off, that can have negative effects on the stock value of the companies involved. This is why creditors do not want you to miss payments.

Given this perspective, you will realize just how desperate creditors will become when you stop paying off your debts. This is especially true if there are more than one debtor who are unable to pay off what they owe.

So when you are presiding over your own debt settlement program, you have to be very patient because time is really on your side. Take it slow, be polite when taking calls, remain consistent with your money problem story and try not to be rattled when the communication starts to get ugly.

Click Here to compare the top debt solutions - debt management, debt consolidation loans, debt settlement and bankruptcy for debt relief. Talk with National Debt Relief today - free with no obligation and find the best solution for your debt.

Why You Need to Avoid Bankruptcy

Realizing that you are deep in debt can be quite a wake up call. You feel like the floor suddenly disappeared below you. One of the words that you will probably think at this point is bankruptcy.

While you may think that you need to file for one, you need to analyze the situation further before finalizing your decision. This is maybe a legitimate way to get out of debt but you have to understand that there are better ways to find debt relief.

Here are the reasons why you should think twice before filing for bankruptcy.

The first is your credit score suffers immensely. Your current score will go down a minimum of 200 points. Among the other options, this is the debt relief that will harm your credit history the most. And it will be reflected there for the next 10 years.

Because of that record, you can expect that your chances of getting financial aid in the future is very slim. It is not impossible but it will be very difficult. When faced with a crisis, being unable to get the needed financial aid can add to the stress of the situation.

Another reason why bankruptcy should be avoided is because you will not really learn your lesson. When you are qualified for a Chapter 7 filing, you will end up being discharged of your unsecured debts and be declared debt free in a matter of months. Although your credit score will suffer, you will not feel the hardship of paying off your debts - thus never really owning up to your responsibility.

Bankruptcy is still a legitimate way to get rid of debt but you have to understand that there are cases wherein it is the only option possible. Usually, these are the severe cases of high debt to income ratios and the lack of a steady income to support any other debt payment plan. However, the encouragement to exhaust all efforts possible before opting for it is still there.

If you wish to find an alternative to bankruptcy, go to National Debt Relief. Learn about the various ways you can achieve debt freedom without the years of stress and money worries. Click on this link to find out more: http://www.nationaldebtrelief.com/debtrelief/.

Do You Qualify for Debt Reduction

Debt reduction has been a great companion to those that are way in over their heads in debt. Also known as debt settlement, there are great programs that is being used in this debt relief option.

As the program’s name suggests, this approach aims to lower down the interest and hopefully, even the capital payment of the debtor. You or a debt professional will negotiate with the creditor to agree to a settlement amount. This is lower than your balance and when this is paid, the rest of hte debt is forgiven. WIth a lower payment comes a shorter payment period thus, this approach is one that is most looked at.

But truth is that not all creditors will agree to a debt reduction. This is mostly based on the qualifications of the debtor themselves. This is the reason that not all are qualified to avail of this program. There are stringent requirement processes that debtors have to undergo to qualify for debt reduction.

At the onset, debt settlement companies will look at the type of debt a debtor has. There are only a handful of loans that can qualify for debt reduction. One of them are unsecured loans. The difference of secured and unsecured is that the latter does not have a collateral tied to the loan. Medical bills that have gone unpaid is also a possible consideration under debt reduction. Other types of loan that can be enrolled in this program are credit card debts and some personal debts. Some credit union debts can also be considered under debt reduction.

The next step is for the debt settlement companies to assess the debtor’s present financial disposition. No legitimate company will represent you if you are not in a real financial crisis. This is in relation to the debtors capacity to pay. Obviously, debt reduction will not be extended to those that are still within their means to continue with their regular monthly payments.

If making the minimum monthly payments is a struggle already for the debtor, it is a signal that they might qualify for debt reduction program. Another thing to look at is when you are about to fall behind your monthly payments.

Debt reduction is one of the viable alternatives to filing for bankruptcy outright. The program helps you stick with your commitment at a lower cost rather than having the taint of bankruptcy on your credit history.

There are also other personal circumstances that are looked into and considered for debt reduction. Because of economic situations, losing your job could be grounds for consideration for debt reduction. This also includes a sudden medical emergency and even divorce. All these factors can greatly contribute to a debtor’s ability to make their monthly payment.

If you want to compare the top debt solutions, click here. The options include debt management, debt consolidation loans, debt settlement and bankruptcy. Talk with National Debt Relief today. No obligations and the initial consultation is free. Find the best solution for your debt problems now.