Get Out Of Debt

Consumers struggling with a high debt burden are reminded that research is required before enrolling in any debt relief program. While there are hundreds of legitimate companies that can help individuals eliminate their debt, there are also plenty of scams circulating within the industry which should be avoided. Before enrolling in any program it is important to investigate the company and the process they claim to use to eliminate debt. Here we are going to take a closer look at a potential scam that has cost some consumers hundreds or even thousands of dollars.

What is the National Debt Relief Program Scam?

It appears many consumers have received a letter in the mail claiming to be from the National Debt Relief Program. Victims of this scam have stated the letter at first glance appears to be from a government agency. Upon closer inspection it becomes clear the letter is not from a government agency but rather GHS Solutions, a debt settlement company. Jennifer Wallis is a Consumer Credit Counseling Service employee in central Oklahoma. She has clients who have received this letter which states the National Debt Relief Program can “reduce monthly payments by up to 50 percent”. Why is this letter considered a scam? Since the letter is designed to look like correspondence from a government agency, many consumers fail to realize it is actually from a debt settlement company. The information is misleading and many consumers who are desperate for a solution to their debt problem may enroll in a program that can have serious negative consequences.

GHS Solutions is a debt settlement company based in Delray Beach, Florida. The Better Business Bureau has given the company a F rating and reports 102 consumer complaints in the past three years. Of the 102 total complaints against the company, 88 are about the company agreeing to perform according to their contract.

GHS Solutions is not the only debt settlement company linked to the National Debt Relief Program scam. It appears consumers have also complained about a company named National Debt Relief and the program they offer to consumers. In this instance consumers have actually enrolled in the program and claim the company did not perform as promised. Clients claim National Debt Relief failed to stop collection calls and did not begin negotiating debt immediately. Other complaints claim the company misrepresents itself to appear like a government agency which leads consumers to believe they are working with a government program designed to assist individuals facing financial hardships.

It is important for all consumers to understand what type of debt relief program they are committing to before moving forward. Debt settlement is a legal process where individuals or companies hired on their behalf, negotiate with creditors to reduce delinquent balances in order to eliminate debt. Anyone considering this process must thoroughly research both the method and any company they consider hiring. There are several risks involved in the process however it can be the best option for people facing a serious financial hardship who would otherwise have to look toward bankruptcy to address their debt situation. It is unfortunate that some debt settlement companies continue to mislead or misrepresent themselves in order to enroll clients in their programs. Consumers are urged to carefully read any correspondence as well as contracts prior to enrolling in a debt settlement program to avoid confusion and disappointment down the road.

Are you in the habit of whipping out your plastic for every purchase?

Now days, most people have the same problem.

With gasoline and other everyday expenditure on a steady rise in cost, most Americans turn to credit cards to pay for their everyday expenses.

But with this influx of credit card use comes an influx of bills that become harder and harder to pay each month.

Sources of cash for many Americans are withering away, says Dick Reed, of the Consumer Credit Counseling Service in Atlanta. Reed has noticed a rise in business as more and more clients are mounting up credit card debt. He goes on to say that customers simply do not have a place to go and get cash. They are digging further into debt in order to pay for, not only standard everyday expenditure, but in order to make the minimum payment on existing debt.

National statistics exemplify this growing trend as the Federal Reserve reports that the average amount of credit card debt in America jumped 6.7 percent in quarter one this year and totaled around 957 billion dollars. Perhaps most troubling is that this increase developed in spite of the fact that most financial institutions are tightening the reins on lending.

In Atlanta, Georgia debtors reported, on average, 29,300 dollars worth of unsecured debt. The most of which was wrapped up in credit cards. This number is up over 4,000 dollars since the 2007 report. Debtors spend an average of 335 dollars on groceries and 242 dollars on gas, whereas one year earlier, those expenses averaged only 291 dollars and 181 dollars.

Many people admit that they’d rather not rack up credit card debt, but other options, like refinancing for lesser interest rates, are no longer readily available due to collapsing housing markets. This leaves many consumers with little option.

When faced with the rising prices of gas and food, many people find that they have no choice but to “charge it” in order to make ends meet.

People are unable to upgrade their income, yet expenses are increasing exponentially. Credit cards become the best way to compensate, says Sara Gilbert of the Consumer Credit Counseling Service in Ft. Collins, Colorado.

Lois Eldridge, a retiree in Arizona, has looked on in horror as her credit card bill doubled to 2,000 dollars in the last several months. High gas and food costs required her to charge these rudiments for the very first time last year.

She has been forced to reduce extra expenditures like entertainment, clothing, and eating out. Although this tactic has helped, she still charges an average of 100 dollars each month.

Lois was also forced to ‘come out of retirement’, so to speak, when she attempted to secure a job at the college in her area to complement her income from Social Security. Unfortunately, she learned that employers offered too little money, or informed her that she was ‘overqualified’ for the available position. Her only other option was a minimum wage job with a local retailer.

My earnings have remained the same even though my expenses are way higher than they were last year even taking into account my attempts at cutting back, says Eldridge, now 71, who has a plan to put her tax refund toward her outstanding debt. I am incredibly overwhelmed by the fact that I’ve had to use my credit cards. I’ve never needed to before. The last 6 months have been a constant worry.

She is not the only one in worry. Analysts declare that card balances and late payments are increasing dramatically, a sure sign that a large group of Americans cannot afford what they spend each month.

It seems that the most trouble seems to be in areas with a weak housing market where a large number of people are already under pressure with mortgage payments. With unemployment on the rise and employers unable to offer overtime, many people find they just don’t make enough to cover their bills.

Many claim they only use their cards for expediency sake and that they do in fact pay their statements on time, but it seems some fractures are appearing in that scenario.

Credit card delinquency rates reached a four-year in February, according to Moody’s debt ranking agency.

Once people have gotten behind, it’s growing more and more difficult for them to get back on track with their card payments again says William Black of Moody’s. We’re in a very taxing economic atmosphere. There’s a lesser amount of cash to go around.

In the meantime, credit card balances are sneaking up progressively, and have been since the beginning of 2006. They leaped nearly 9 percent during 2007. This is due to a growing number of people who spend more and pay less each month plus other exciting and attractive offers like Chase credit cards, 0% interest Visa card balance transfer, and more.

Another sad fact is, in spite of the troubles people incur with increasing credit card debt, the number of cards issued is also on the rise. At the close of 2007, there was a whopping 420 million credit cards in the marketplace, that’s up 7.6 percent from the year prior.

Growing balances and late payments are bad for the economy, which depends heavily on consumer expenditures, says Bill Hampel, of the Credit Union National Assn.

Many people will stop going to dinner or to the movies as they see their balances rise. This will injure the economy to a great extent.

If you’re buried in debt and can’t get out and would like to share your story, or if you’ve actually managed to climb out of the pit and want the opportunity to help others, let us know about situation, we want to help.

The overwhelming task of eliminating your debts can often seem like an uphill battle. Without the knowledge and expertise of a professional on your side, unfortunately, the odds are not in your favor. In order to reduce your debt, you have several options; however, if you want to maintain a “good credit rating”, you have to pay you bills on time; anything else will cause your credit score will suffer. With that being said please consider the following:

Option 1 – Consumer Credit Counseling

Consumer Credit Counseling companies were originally established to help credit card company’s recover revenue from clients that were falling behind on their bills. Choosing to use a Consumer Credit Counseling service can have negative effects on your credit that last up to 10 years. These services are also considered Chapter 13 Bankruptcy by most lending institutions. The bottom line is that Consumer Credit Counseling companies work for the creditors and banks.

By using their services, you will end up paying back your full debt, plus interest. These companies do not always provide financial relief as consumers often find out.

Option 2 – Debt Consolidation Loan

Borrowing from Peter to pay Paul is no way to get out of debt. It is however, the premise behind debt consolidation programs. Debt consolidation programs require that financial institutions provide consumer loans based on items of equity. For example, a home equity loan is used to “combine” your debts into a single monthly payment, which can often take 10 to 20 years to repay depending your on financial situation. This may seem like a viable solution in the short term, but missing payments on a secured loan could cause you to lose your home or the collateral you pledged. Many people who decide to go the debt consolidation route find themselves worse off than they originally were. It is not a good idea to exchange your unsecured debts for secured debts.

Option 3 – File Bankruptcy

While bankruptcy may seem to be the most expedient method for removing your unsecured debt, it is not, by any means, the best answer. A bankruptcy will remain on your credit record for 7-10 years and seriously affect your ability to rebuild your credit. Even after a bankruptcy has been removed from your record, you are still required to disclose it on forms and applications; even applications for employment. If you fail to answer this question truthfully it can be considered a crime. Additionally, certain types of bankruptcy can require a court-appointed trustee to control and oversee all aspects of your personal estate. Bankruptcy can have an adverse affect on your credit rating and lifestyle long after the legal matters are over. This is not a decision to be taken lightly. Bankruptcy is an option that should only be explored as an absolute last resort to solving your financial problems.

Option 4 – Debt Negotiation and Settlement Programs

Debt settlement programs provide their customers with a viable
solution to an otherwise complex problem. By helping eliminate your current debt, Debt Settlement programs allows you to regain control over your financial affairs and allow you to become debt free within a reasonable time frame. Debt settlement is fast becoming the only true option to financial recovery! However, I will say it again, even in Debt Settlement you have to pay you bills on time; anything else will cause your credit score to suffer.

Debt settlement is not a Consumer Credit Counseling Service or a
consolidation loan. Debt settlement is a legitimate and legal way of solving your debt and credit problems without the need for bankruptcy. Detb Settlement programs were designed to lower your current debst by 40-60%. Traditionally, this is accomplished by negotiating approved payoff amounts with your creditors. A Debt Settlement program can typically be completed within 36 months or less and eliminate most, if not all, of your current debts.

For the majority of consumers from the financial difficulties of the debt management program offers the best and most effective credit cards Debt relief. Many lenders have programs in place, that the difficulties offer special payment plans for customers who are experiencing debt relief. These special programs are usually available through the Support Services Consumer Credit Counseling homes, and refer to as a program of debt relief management for consumers.

If you plan to does a debt management program simply fill out the form on the right side for a FREE NO debt. Certified Debt Counselor to discuss your financial situation and be able to negotiate with the debt-for-profit organization, which is suitable for your specific needs and location.

Debt Management Program primarily benefits consumers who have accumulated at least $ 5000 in unsecured credit card debt and unable to pay monthly. Most management programs credit card debt to reduce monthly payments, reducing interest rates, stop late fees and, most importantly, once again through the ages, which are included in the agenda, which is in good condition. Credit card debt management program provides an opportunity for registrants to be debt free in four to five years. Debt relief also made possible by the savings can be achieved by reducing the interest and re-aging accounts, thus eliminating expensive late fees and other expenses, punitive damages.

Although there are other options for debt relief, as well as debt management program creditors through consultation with consumer lending organizations with general approval, it is our experience that credit card debt management program offers the best opportunity for debtors to start over and get out of debt. It is also important to understand that debtors considering bankruptcy must first be certified Consumer Credit Counseling Service prior to filing for bankruptcy. All potential bankruptcy filers must undergo credit counseling with the help of the approved budget and non-profit organization credit counseling “before filing for bankruptcy. Taxpayers must also follow a course in managing personal finances “before the bankruptcy.

New Bankruptcy Act 2005 requires that all consumers seeking protection for the completion of consultation session on bankruptcy and receives a certificate of completion before it can be served. This provision ensures that all consumers understand their financial capacity, and have the knowledge and tools necessary to develop an effective financial plan for your financial future.