Debt Relief Articles

Shopping around? Getting quotes from different companies? Filling out forms on the internet, looking for help? Tempted by lower payments?

Don’t be fooled…

DO YOU HAVE ACCOUNTS WITH ANY OF THESE CREDITORS: Citibank, Discover or Bank of America?

Are you sure?

BUYER BEWARE:

If you receive quotes from anyone who does NOT ask you who your creditors are, you better RUN!

With so many people in a financial hardship these days, many unscrupulous, untrained or ignorant people are jumping onto the debt settlement band wagon… unfortunately this could mean big trouble for you!

Did you know Citibank, Discover and Bank of America are much more likely to file a lawsuit against you if you make the mistake of enrolling into a bad debt settlement program over 24-30 months. Or, in some cases, even if it’s longer than 12 months?

It all depends on how much debt you have with “aggressive creditors” like Citibank, Discover and Bank of America.

You may have accounts disguised as other creditors, but and are actually owned by these same nasty creditors, like…

* AT&T Universal (Citibank)

* Most gas cards (Exxon, BP, Citgo, Chevron… ALL Citibank)

* Sears (Citibank)

* Sometimes Lowes & Sams (Discover)

* FIA (Bank of America)

* Plus many more common names you might know all too well, but didn’t know were ticking time bombs in your financial plan.

In fact, if you have too much debt with Citibank, Discover and Bank of America, then debt settlement MOST LIKELY won’t work for you at all!

What If You Enrolled In Such A Program?

You’ll most likely get ripped off and left to deal with nasty creditors on your own if you fall for the smoke and mirrors most companies offer. Usually clients are ignored and given poor customer service from such companies because they are only set up to enroll clients, not to fulfill their empty promises. When creditors get nasty or sue, the company is not there for them. The salesperson is long gone with their commission, and you’re left to deal with collectors, attorneys and courts all alone. Watch out for high pressure sales people or slick-sters trying to sell you on the lowest monthly payment without even looking at your specific situation.

“Three Rules” To Avoid Trouble:

1. Only trust quotes from a debt settlement company who requires statements prior to providing specific quotes. There’s simply no way to accurately estimate based on balances alone. The details found only on the credit card / account statements are critically important in determining a cost for settlement and a monthly payment.

2. Only work with a debt settlement company who has been in business over 5 years. If 90% of business fail in the first five years, why would you trust your financial future to such an unproven newbie? Stay away from start ups! Choose a company with a proven track record over time.

3. Only work with companies who are BBB Members in good standing, with a clean BBB Reliability Report. Stay away from companies with a long list of complaints… This is a sure sign the companies over-promises and delivers poor results, probably getting their clients sued unnecessarily.

Something Else To Watch-Out For

With the collapse of sub-prime lending, rising unemployment and increasing debt, the debt settlement industry has exploded. Many financial salespeople have rushed into debt settlement to MAKE MONEY. Most “debt consultants” might as well have been hired yesterday. They are only trained to enroll clients in volume. They don’t really know what they’re talking about and are only after a quick sale, regardless of how bad it may turn out for your financial future.

I had a representative from a major debt settlement company call my cell phone last week by mistake. I was amused, so acted as a “secret shopper”. She asked me how much debt I had. I told her I had $30-40k in credit card debt, just to see what she would say. Immediately, the hackles shot up on my back when I heard her say I could be debt free for payments of only $250 a month.

That’s ridiculous!

There is simply no way to achieve such results, especially without knowing ANYTHING ELSE about my personal financial situation, who my creditors are, or even the state I live in. You may be able to make payments of $250 a month long enough to pay a debt settlement company a large amount in fees, but you’ll be sued by most of your creditors, costing you far more than expected, by the time you ever save enough money to settle your debts at that rate.

How many people are being suckered like this?

This habit of “over-promising” has become the norm to compete and survive as debt settlement sales rep. In the years to come, the debt settlement industry will be exposed for it’s dirty laundry, and this will be the core of evil. Misleading consumers is wrong morally, ethically and legally. Still, it’s happening every day.

Use your gut and common sense.

You’ve Been Warned

It seems the troubles in the economy continue to harm those around us with more unemployment, higher gas and food costs and the housing market slumping further and further down the tubes. Things have gotten out of hand.

Make no mistake, debt settlement may be the best option by far for you if you’re in a financial hardship, but only if it’s a good program that works in YOUR SPECIFIC CURRENT REALITY. Of course, personal service and expert knowledge are nice, especially in the sea of ignorance and desperation swarming the debt settlement industry these days.

There’s a huge need right now for immediate education about how to deal with financial stress and struggle, how to get out of debt and how to manage financial hardship to regain a solid financial footing and achieve freedom and independence, before it’s too late!

This article is intended to be a review of Dave Ramsey’s 7 Baby Steps to Financial Peace.

Dave Ramsey’s 7 Baby Steps program was designed by him to be very simple for anyone to follow. When a person is trying to take control of their finances they must start out with baby steps just like a child who is learning to walk. Each step in Dave Ramsey’s program is a building block in the whole plan of achieving personal financial freedom.

The 7 Baby Steps from his program are listed here with an explanation for each.

Baby Step 1: $1,000 to start an emergency fund

The first step is to establish an emergency fund. This step is setup to help people to build up a small amount of savings to relieve them from their dependence on credit cards. Having this emergency fund helps people to have money available for unexpected expenses that come up.

Baby Step 2: Pay off all debt using the debt snowball method (excluding your house)

The second step is to pay down all of your debt by using the debt snowball method. The idea is to start by paying off your smallest debt first and making the minimum payments on all other debts. Then once you pay the first one off you move to the next smallest debt and put all extra money toward it. You follow this process until all debts are paid off (excluding your house payment).

Baby Step 3: Save up 3 to 6 months of expenses

The third step is to establish a complete emergency fund of 3 to 6 months of expenses. If we do not have this in place then if we incur unexpected expenses we could be forced to put them on a credit card and then be right back in the middle of step 2.

Baby Step 4: Invest 15% of your income in pre-tax retirement

If you have reached this point you are now on your way to success. The fourth step is to begin to save for retirement. The idea is to take 15% off of the top of each check and put it into a tax free retirement account so you can feed yourself once you retire.

Baby Step 5: Save for college funding for your children

This fifth step is very important and can be applied to saving for your own college or your childrens college. You need to make an estimate of how much you will need for college. Then you need to use a savings calculator to find out how much you need to save each month at X interest rate to end up with the total amount needed for college.

Baby Step 6: Pay off your home early

This step is also very important. After doing everything else you need to move on to paying off your house. The key here is to pay off your house quickly. Doing this will help you save on interest and also will allow you to be able to allocate your entire house payment amount toward other things.

Baby Step 7: Build up your wealth and be generous

The final step is Dave Ramsey’s seven baby steps program is to build wealth. To do this you should begin by putting most of your excess money toward investments. This means putting this money in investment accounts that are invested in mutual funds.

This review of the Seven Baby Steps program has given you an excellent idea of how it works and also shown that anyone can be successful if they take on their personal finances one step at a time.

Please follow Dave Ramsey’s personal finance advice and begin your journey toward financial peace.

The Federal Debt Relief System is a unique company because of their determination to educate debtors in the United States of America. The company works to alleviate the debt of many individuals around the U.S., not just by helping with the actual debt of the individual but by also bringing education to the individuals about debt and debt relief. When a person signs up for the program, they will get an educational newsletter and video that can be utilized in order to help the individual understand more about the program and their situation.

The company itself offers free consultations to individuals who are interested in their services. However, the program is not for everyone since it is an education program as well as a debt relief service. Some individuals that will benefit the most from such a program include people who owe more than ten thousand dollars in debt. If you choose to sign up with the company, you will not have to enroll all of your credit cards in the program. You have the choice of which credit cards will and will not be included in your program. Debt that works within the program can include credit cards, especially major credit cards, unsecured personal loans and other lines of credit cards. Secured debt is not covered in the Federal Debt Relief System program. Medical bills, child support, business debt, utilities and student loans are also not always covered in the program. Accounts will be closed during and after the program takes place so that individuals cannot get in any more debt while they are going through the educational process. The program works well with thousands of creditors across the country.

If you have debt that is in collection, but you have not made any payments on these collection debts, you can include that debt in your Federal Debt Relief System program. If you have made a payment toward that collection based debt, the Federal Debt Relief System cannot help you with that debt because your payment signifies your belief in the validity of the debt that you are being charged. The program will not work for debt that is already in consolidation. The processes that are accomplished by the Federal Debt Relief System can be performed by individuals, but only if they are lawyers.

For tax consequences, it is important for individuals to get the proper information about how the program will affect them from a tax standpoint from tax professionals. This is because the program does not give out this type of financial advice and sticks to the areas of education that they are best suited for. Legally, it is not possible for the company to guarantee their work. No lawyer can guarantee their work one hundred percent because the legal system is not always clearly able to be forecasted. However, it is important to note that the program has a one hundred percent success rate to date and the program continues to be improved upon regularly. The program’s associates are working on a continuous basis to ensure that their consumers are happy and the debt is taken care of in a legal and educational manner.