Credit Card Monthly Payment

Unfortunately, millions of Americans who are struggling with their debts continue to just barely make their monthly payments.  Some of these people struggle for the rest of their lives in debt, while their debt may be stealing their ability to retire.   If you are facing a financial hardship, this is a no win situation, especially as credit card companiescould raise your interest and payment if you miss a payment.  If you are only meeting your minimum payments then your payments are applied to mostly interest, not to paying down your balance.

This means that if you owe $10,000 today, it could cost you more than $20,000 over the next 10-20 years before you pay off your debt.  If at some point you can’t make the minimum payments, the creditors will begin calling you, raising rates and charging additional fees.   If you do not reslove your debts, you could end up with judgments that could futher lead to garnished wages as well as liens against your property, depending on the laws in your state.   If you are struggeling with your credit cards while paying a modest interest rate 12% for example, imagine the payment required if the rate went up to 25% or higher.   Ever day we talk with individuals and families who can not make even their minimum payments any more.  A program FreedomDebt.com offers may allow you to avoid bankruptcy, avoid new debt and come to and reslove your debt on agreeable terms.

FreedomDebt.com wants to help you find the optimal solution for you, not your creditors.  By working through a plan tailored to your specific situation, you may be able to settle your debt for as little as 50% of what you owe over the next 2-4 years and with a comfortable monthly settlement plan payment.

 

Credit Counseling

The main problem with credit counseling organizations is that they are really working for and paid by the creditors!   You end up paying back ALL of your debt, plus interest at an often reduced rate plus their fees.  In fact, you will probably spend over two times more money to pay off your debts successfully completing a credit counseling plan than successfully completing a program offered by FreedomDebt.com.  Most credit counseling firms claim non-profit status and to be independent. In the past, many have had their non-profit status revoked by the IRS and many of their principals still enjoy salaries in the high six figures.  Even though the company might say they do not make a profit, someone working for the company is!  Credit counseling companies do not negotiate your debts down, they merely try to come up with a plan to make sure you keep paying your credit card bills and maximize profits for creditors.  In other words, they want to force consumers to pay as much money as possible to creditors- the more you pay, the more the credit counselor makes.  Credit counseling can be a good option for people who can afford a high monthly payment, usually about the same as making minimum payments.  If you need to decrease your monthly credit card payout significantly, credit counseling will probably not work for you. 

Additionally, since you are repaying 100% of your debt balance plus interest charges (even after they are reduced by credit counseling) and their fees, you will probably be in a credit counseling program for 5-7 years!  

Credit counseling companies claim that their program will not affect your FICO score.  This can be misleading because once you enroll in credit counseling, all of the enrolled accounts are closed leaving you no "available credit."   This in turn can lower your credit score if you had available credit on your accounts prior to enrolling them.  Also many lenders view credit counseling programs similar to a bankruptcy when reviewing your credit.  Call a random mortgage lender or auto finance company to verify. 

Most credit counseling companies require you to make all of your payments to them and then they in turn they pay your creditors.  People in credit counseling programs have reported that certain counseling companies did not pay their creditors on time and some also report that their debt did not go down as fast as they were lead to believe.  In the past, a State Attorney General sued one of the largest credit counseling firms because they were not actually passing on all the money they got to the credit card companies, they were keeping it themselves!  In fact the IRS had stopped granting non-profit status to credit counseling firms in addition to having revoked the status from many credit counselors.

If you can afford payments that are about the same as your minimum payments and are aware that some lenders my view it similar to a bankruptcy on your credit report, you may want to consider credit counseling.  If you complete a credit counseling program, you could be out of debt in 5-7 years verses 10-20 years or more making minimum payments.  If the credit counselor makes all payments on time, you should not receive any harassing phone calls from your creditors.  Also if all of the payments are made to your creditors,  you virtually avoid the possibility of a creditor taking legal action against you.   Also, since you are paying back your debt in full creditors cannot send you a 10/99-c which could create a tax liability if you are not insolvent, meaning your debts are less than your assets.  Creditors may, but often do not send a 10/99-c after a debt is settled.

Programs offered by FreedomDebt.com receive no payments from creditors.  Our programs represent the best interest of our clients and not necessarily the creditors.  We are here to help you.

Debt Consolidation

A debt consolidation loan is one of the first and most common solutions people think of when they fall into financial difficulties.  This is an unfortunate problem because most people who get a debt consolidation loan find themselves in much deeper financial trouble than they were originally.   Why?  Because debt consolidation loans transfer debt from one place to another.   Although in some cases a lower monthly payment is achieved, a debt consolidation loan will NOT reduce what you owe at all.   You will still pay back 100% of the debt consolidation loan, plus interest.   A final sobering fact about debt consolidation is that once you sign up for a debt consolidation loan, in almost all cases you have chosen to transfer your unsecured debt to secured debt and therefore have put your personal assets (e.g. your car or usually your home) at risk.   If at any time you are unable to pay your bills your creditors can come and take your personal property - thus creating a much bigger problem than you had to begin with.

We have yet to find someone who has solved his or her severe debt problem by borrowing more money through debt consolidation.   We receive thousands of calls from people genuinely searching for help, yet we are unable to assist them because their debt is secured by property and is unable to be negotiated.   Unfortunately their only option may be to sell those assets if there is any equity, or have those assets repossessed.

FreedomDebt.com has reputable experience assisting tens of thousands of individuals and families with a new financial start.   We believe that debt negotiation combined with financial education is the best solution for many people to permanently resolve the problem and not just put a "band aid over a large wound."

Bankruptcy

If you have a high debt load and little or no income, bankruptcy might be your only option to resolve your debt.  Bankruptcy leaves a long lasting scar, and comes at a high price - financially, emotionally, and socially.  And if that doesn't outweigh any potential benefit, discharging debt in bankruptcy can be more difficult since the Bankruptcy Abuse and Consumer Protection Act of October 2005.  We have seen that many people are forced into a Chapter 13 repayment plan for 3 to 5 years because they did not qualify to discharge their debts in a Chapter 7.  The payments for debts during a Chapter 13 are usually garnished from your paycheck.

The financial impact is severe; a Chapter 13 Bankruptcy can stay on your credit report for up to 7 years after the discharge date and a Chapter 7 up to 10 years after discharge.  Additionally, most people do not realize that bankruptcy can stay in the court's records for 20 years to life, which means if you apply for a job, a loan, rent an apartment, or even insurance, your bankruptcy filing could be easily uncovered even when no longer on your credit report.  Most applications ask if you have ""ever" filed for bankruptcy.

Bankruptcy is not a financial decision that a normal person that feels forced to make, is proud of.   The emotional and social impact should not be overlooked when considering bankruptcy as an option.   Most people will do anything to avoid filing bankruptcy and it should only be considered as an absolute last resort.   Bankruptcy is not an easy or quick fix.   It is a very serious decision with potentially serious consequences.

If you are considering bankruptcy, you should carefully consider your legal representation options.  FreedomDebt.com can not give legal advice.  There are honest bankruptcy attorneys, and ones who are not.   Simply put some attorneys "downplay" the future affects of bankruptcy and convince people to file bankruptcy by offering to get their debt discharged in a Chapter 7 only to soon leave the debtor no choice but to pay back debt in a Chapter 13 repayment plan for 3-5 years.   "Can that really happen?" you may ask.  Consider that although you have made a decision on legal representation and paid the attorney to begin the bankruptcy process for you, there is no guarantee that the court will approve your bankruptcy plan.  For years every time you apply for credit, whether it is a home, car, lease, or insurance, you will be impacted.   The long-term effect of higher rates could many times outweigh the shorter-term savings of a successful Chapter 7 Bankruptcy.

All things considered, FreedomDebt.com's programs offer a better choice for many people.   In these programs you are working to resolve the financial difficulty - by negotiating to settle your debt and eliminate it once and for all.   Although debt negotiation affects your credit profile, when a creditor settles a debt it is reported on your credit report as "settled in full" with a "0" balance.  Our programs give people the opportunity to be debt free without having to also suffer the financial, emotional, and social impacts of a bankruptcy.