YOUR OPTIONS
You have a few options for managing or eliminating your debt. Our debt relief program is the only one that can eliminate your debt quickly and effectively. Our customer service staff will provide resources and information to help you make the most informed decision for your unique situation.Source: http://www.ftc.gov/bcp/conline/pubs/credit/kneedeep.htm
Debt Relief Choices
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1. Our Solution
2. Bankruptcy
3. Debt Consolidation Loan
4. Consumer Credit Counseling Services
5. Do Nothing
1. Our Solution
We provide a proven debt elimination process to help you become debt free, often in as little as 12 to 36 months. Our experienced staff will design an individualized debt relief program for your unique situation and will assist you until you complete your journey. CWN Debt Relief and its partners have helped more than 12,000 people succeed in becoming debt free.
Also known as Debt negotiation, debt settlement is an aggressive approach to debt elimination, which is appropriate for debtors with a serious amount of debt or who are considering bankruptcy. A debt settlement company negotiates with the creditors to settle the debt for a lower amount than owed, as the debtor saves their money for a lump-sum settlement payment. After the debt is settled, the creditor will send a letter stating the debt obligation was fulfilled, and will report to the credit bureaus that the debt has been, "Settled for less than full amount", "Paid" or "Settled".
Creditors will usually settle for less than owed when the debtor is under serious financial strain because if the debtor chooses to file bankruptcy, then the creditor gets nothing. Creditors want to get as much money back as they can. Debt Settlement is a way to get out of debt in the shortest amount of time, and with the least amount of money without filing for bankruptcy.
2. Bankruptcy
In 2005, Congress passed new bankruptcy laws that made it more difficult to file for bankruptcy. Many people may believe bankruptcy remains on your credit report for up to 10 years, but its effects stay with you forever because it will be difficult to obtain credit, buy a home, get life insurance, or sometimes get a job. You should only consider bankruptcy as the last option for resolving debt matters since its effects are permanent. Chapter 13 bankruptcies, for instance, require repayment of all debts along with attorney fees and credit counseling costs. Bankruptcy's negative effects stay on your credit report and affect your credit rating. In Chapter 13, the court approves a repayment plan that allows you to use your future income to pay off a default during a three-to-five-year period, rather than surrender any property. After you have made all the payments under the plan, you receive a discharge of your debts.
Known as straight bankruptcy, Chapter 7 involves liquidation of all assets that are not exempt. Exempt property may include automobiles, work-related tools, and basic household furnishings. Some of your property may be sold by a court-appointed official - a trustee - or turned over to your creditors. You can receive a discharge of your debts through Chapter 7 only once every six years.
Both types of bankruptcy may get rid of unsecured debts and stop foreclosures, repossessions, garnishments, utility shut-offs, and debt collection activities. Both also provide exemptions that allow people to keep certain assets, although exemption amounts vary. Note that personal bankruptcy usually does not erase child support, alimony, fines, taxes, and some student loan obligations. And unless you have an acceptable plan to catch up on your debt under Chapter 13, bankruptcy usually does not allow you to keep property when your creditor has an unpaid mortgage or lien on it.
3.Debt Consolidation Loan
A debt consolidation loan's premise is flawed: You borrow money to fix a money borrowing problem. Remember that these loans require you to put up your home as collateral. If you can't make the payments - or if your payments are late - you could lose your home. What's more, the costs of debt consolidation loans can add up. In addition to interest on the loans, you may have to pay "points," with one point equal to one percent of the amount you borrow. Still, these loans may provide certain tax advantages that are not available with other kinds of credit and credit cards. Lenders loan you money at a lower interest rate than you currently pay on your debts. This saves you money on your interest charges, but it only reduces your debt if you repay it quickly. If you extend your repayment, then the interest charges add to your current debt and increase your overall debt.
A debt consolidation loan can lower your monthly payment. This helps you every month, but it will not help you over the years. The loan extends your repayment period over many years.
4. Consumer Credit Counseling Services (CCCS)
If you're not disciplined enough to create a workable budget and stick to it, can't work out a repayment plan with your creditors, or can't keep track of mounting bills, consider contacting a credit card debt settlement counseling organization. Many credit counseling organizations are nonprofit and work with you to solve your financial problems. But be aware that, just because an organization says it is "nonprofit," there is no guarantee that its services are free, affordable, or even legitimate. In fact, some credit counseling organizations charge high fees, which may be hidden, or urge consumers to make "voluntary" contributions that can cause more debt. Most credit counselors offer services through local offices, the Internet, or on the telephone. If possible, find an organization that offers in-person credit card debt counseling. Many universities, military bases, credit unions, housing authorities, and branches of the U.S. Cooperative Extension Service operate nonprofit credit counseling programs. Your financial institution, local consumer protection agency, and friends and family also may be good sources of information and referrals. Reputable credit counseling organizations can advise you on managing your money and debts, help you develop a budget, and offer free educational materials and workshops. Counselors discuss your entire financial situation with you, and help you develop a personalized plan to solve your money problems. An initial counseling session typically lasts an hour, with an offer of follow-up sessions. Protect yourself, be wary of credit counseling organizations that:
- Charge high up-front or monthly fees for enrolling in credit counseling or a DMP (Debt Management Plan).
- Pressure you to make "voluntary contributions," another name for fees.
- Won't send you free information about the services they provide without requiring you to provide personal financial information, such as credit card account numbers and balances.
- Try to enroll you in a DMP without spending time reviewing your financial situation.
- Offer to enroll you in a DMP without teaching you budgeting and money management skills.
- Demand that you make payments into a DMP before your creditors have accepted you into the program.
5. Do Nothing
This is not a viable debt-management option. This is what many consumers have done to reach the point where they realize they need help. If you are only making minimum payments on $20,000 in credit card debt, at a 19.0% interest rate, it will take you over 50 years to pay it off and you will pay over $50,000 in interest.
To change your debt situation, you must change. Without changing your habits, you will only yield the same negative results. If you are ready to regain control of your financial destiny and reduce your stress, then call today and talk with a debt consultant. If you are unsure, call one of our debt professionals and ask them any questions you may have.