What is Debt Consolidation?

Debt consolidation is designed to help pay off your debt by combining all your bills into one affordable monthly payment. Under our program, monthly payments are lowered and interest rates are reduced – sometimes totally eliminated. Your save thousands of dollars in interest, and your payoff time is typically much less.

Why are my creditors willing to do this?

Creditors are willing to lower interest charges and monthly payments as a way to help the client avoid filing bankruptcy, or to avoid having to turn accounts over to a collection agency.

How will this affect my credit?

Debt consolidation is the often regarded as the best way to become Debt Free. Future creditors will view enrollment in a consolidation program as your taking responsibility by making regular monthly payments to meet your debt obligations. It may be that you are current with payments but realize that you will never be free of debt by paying only the minimum payment each month. In this case, you are in financial danger but your credit rating may still be very good. Once you have begun our debt consolidation service, your credit report may or in most case, may not indicate as this bill is being paid by a Third Party payer. This is not a negative or positive aspect, simply a neutral remark.

Which types of debts can we work with?

All unsecured types of debt can be successfully consolidated under our program. These will include credit cards, bank lines of credit, judgements, attorney fees, IRS back taxes, previous rent, previous utilities, disconnected cell-phones, student loans, medical bills, and department store cards.

Secured debts such as home mortgages and auto loans typically cannot be consolidated.

Should I declare bankruptcy to avoid paying my debts?

If you are in an absolute financial crisis, then choosing the drastic measure of declaring bankruptcy should be a last resort. Again, Bankruptcy should only be considered as a final option. It will have an adverse affect on your credit report for up to 10 years. It will also harm any potential relationships with future creditors. Most future creditors won’t even consider extending credit to you. You also need to go to bankruptcy court and pay attorney fees. With our debt consolidation alternative, you repay your obligations at a faster rate, at reduced interest charges.

Is taking out a consolidation loan, a good decision?

No, Many consumers see this as the best option for resolving debt. They receive a lump-sum check and are lead to believe that the interest is tax deductible. Unfortunately, many families encounter deeper financial difficulties than they had before taking out the loan. Payments and interest charges on debt are not reduced, and you end up having to pay down added debt from your new loan. Your home can be jeopardized if you become unable to pay back the loan.

How long will it take to get out of debt?

With the average client debts can be resolved in approximately 4 years or less. Typically 2 to 4 years, though it varies from case to case.

Does your company serve all 50 states?

Yes, we work within all US governed states and provinces. This includes Puerto Rico and Guam. We do not work with Canadian creditors as of this time.

Are your bills long since due? Do creditors keep calling? Are you deep in debt?

If you answered yes to every question, you are not alone. Statistics show that the average American house holds 13 credit cards, and a combined debt of $5,800 in credit card debt or more. In debt, it’s almost impossible save, invest, or enjoy life due to a lack of financial freedom.

If you are experiencing severe debt difficulties and find it difficult to cope, you really should not borrow more money. Try to consolidate your debt using some debt consolidation program.

Debt consolidation programs – what are my options?

There are various debt consolidation programs, which gives you a lot of options. You could either select a paid service or go for the many free services available. If comfortable, you could also avail an online program for debt consolidation. Banks and financial firms will provide you with these services.

Once enrolled in a particular company, you will have a financial analyst or an expert counselor working with you to frame a program to suit your financial need. They then work with your creditors to get lower interest rates and lower monthly payments for you. In some cases, they might even get creditors to eliminate past fees.

Once your counselor has come to an agreement with each of your creditors, you must begin making payments to the debt consolidation company each month. They will divide your payment among your creditors.

Another benefit of a debt consolidation company is that they will teach you how to use credit wisely and how to budget better so that you won’t find yourself in debt again.

If you want, you can search the Internet using the term ‘debt consolidation” and you will find a wide variety of companies to choose from who will be willing to help you. Fill out their free, secure online questionnaires; and a representative from each company will get back with you within 24 hours with a recommendation about your financial situation.

Michigan debt consolidation – 5 things you should know
Michigan consolidation options can help you combine all your bills into one easy monthly payment. Therefore, you need to make a single monthly payment to the consolidation company, which will then divide and distribute the payment amongst your creditors and collection agencies. Whether you’re in Detroit or any area in Michigan, the consolidation options are the same. Here are the 5 things that you should know about Michigan debt consolidation.

1.Michigan consolidation options: You can consolidate bills by choosing a consolidation program or applying for a consolidation loan. When you’re in a consolidation program, a consultant will negotiate with your creditors and help you obtain an affordable payment plan. Take a look at the various consolidation options in the article on “How do I consolidate my bills?”.
2.Criteria for Michigan consolidation: Each company or lender has different criteria to determine suitability for a consolidation program or loan. You need to have certain amount of debt in order to get enrolled in a program. There’s a criterion regarding your credit history with a program. But you need to have good credit record if you’d like to get a consolidation loan.
3.Consolidation can help lower interest rates: The consultant at the Michigan debt consolidation company reviews your financial situation and works with your creditors in order to have your interest rates reduced. This helps you save money.
4.Creditors can eliminate late fees and penalty costs: If you’ve made late payments or exceeded your credit limit, your creditors/CA will charge late fees and over-limit charges. Michigan consolidation companies can negotiate with your creditors/CA and help you get rid of late fees, over-limit charges, and other penalty costs.
5.Creditor/collection calls will stop: When you’re able to repay your bills with the help of Michigan debt consolidation options, creditors or collection agencies will stop harassing you with repeated phone calls or letters.
Michigan debt consolidation – 5 Mistakes you should avoid
Given below are 5 mistakes which you should avoid while consolidating your bills:

•Don’t cancel credit cards: Avoid canceling cards you have an outstanding balance on because it is harder to negotiate better interest rates with creditors if you show that you don’t want to be their customer anymore. Moreover, when you keep your accounts open, it creates a positive impact on your credit report.
•Read the fine print: It is better to read the fine print and be sure about the terms of agreement before you choose a Michigan debt consolidation program or loan.
•Do not make large purchases: Avoid making a large purchase with your credit cards after you’ve included them in a consolidation program. This will keep you from adding to your balances while you’re paying down your bills.
•Avoid consolidation scams: There are consolidation companies that attempt to scam consumers by taking money from debtors without providing any services in exchange. So, it is better to check out the reputation of the company before you choose a Michigan debt consolidation program. Moreover, you should check out what fees you’ll need to pay.
FAQ on consolidation in Detroit, Michigan
Q) I’ve piled up credit card and medical bills in Detroit, Michigan. I’d like to know the SOL. Can I make payments if the SOL has expired?
Ans: The SOL for credit card and medical bills in Michigan is 6 years. If your accounts have exceeded the SOL, your creditors cannot sue you. If you reach a new agreement with the creditor and breach it, then the SOL will restart. But if the SOL hasn’t expired, then you should try to pay off your bills. You can obtain low interest rates and consolidate your bills with the help of a debt consolidation Detroit company.

Q) Can I consolidate private student loans? I’m in Michigan.
Ans: You can consolidate private student loans by taking out a Michigan debt consolidation loan and repay your student loans with one large payment. This leaves you with a single loan that needs you to make small monthly repayments.

Q) I have taken out several loans from various lenders, one of which has been withdrawing $60 from my account every 2 weeks for the past 4-5 months since I have been unable to pay off the original balance of $200. I’m curious to know how pdls work in Detroit, Michigan, as they’ve already taken out 3 times my original principal. How do I get rid of the pdls?
Ans: Payday loans are legal in Michigan. Therefore, you’ll have to pay off the principal as well as the interest. If you’ve taken out payday loans, you can consolidate them with the help of a debt consolidation Detroit company. Know more…

Michigan debt settlement is an alternative to consolidation
When you can’t afford to make your repayments, and you don’t want to consolidate, you can settle them with a one-time payment and pay down the obligation. You can settle your bills with the creditors on your own by checking out the steps to settle bills yourself.

If you find it difficult to work out a settlement with creditors, take advantage of Michigan debt settlement services that make it easier for you. Under a settlement program, negotiators communicate with creditors so that the creditors agree to reduce the total amount you owe. However, the Michigan debt settlement company will need you to pay upfront fees and a monthly representation fee.

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After your information is analyzed thoroughly by a qualified representative, they will then begin to develop a strategy to help you budget your income so that you can payoff your bills and increase your income. These organizations will help you keep records of your spending, learn how to prepare for emergencies, and at the same time, help you to manage your debts.

Furthermore, the companies that help you organize may see a need to refer you to qualifying debt management programs that offer counseling. These counselors will contact creditors on your behalf, including business creditors, legal creditors to negotiate, and arrange lower monthly fees, including rates of interest.

The programs may even ask for waiver on fees for late charges, and will ask for elimination of accounts past the seven-year guideline. Once the plans are set in motion, they may require you to send one monthly installment to the debt consolidation agency, which then will then be broken down into payments and sent in the arranged amounts to each creditor. To find out more information debt consolidation go to free info...

In the face of consumer advocacy, the Federal Trade Commission (FTC) has issued a rule in which debt settlement companies cannot charge fees without settling at least one account. This rule goes into effect on October 27th, 2010. Thus, many unscrupulous debt settlement companies are in panic mode and will either close their doors or scramble for a loophole.

Enter- a ‘wolf in sheep’s clothing’ – the attorney-based debt settlement model. In attempts to salvage their businesses, many companies are turning to this model because attorneys may be exempt from the new Rule due to the protection of their state bars and the face-to-face nature of the majority of their consultations. The new rule exempts transactions that include a face-to-face consultation before the delivery of any goods or services, as deceptive trade practices are less likely to occur in such circumstances. Further, consumers buy into the ‘allure’ of using an attorney because of the false security of working with legal representation.

A slap in the face for consumers and the FTC
Contrary to the spirit of the new regulation, the attorney model allows debt settlers to continue charging upfront fees, negating the purpose of the FTC ruling. If a consumer doesn’t have a lump sum to offer as settlement to a creditor, the creditor will not honor the settlement, and will continue with collections or even sue the debtor.

Attorney-based debt settlement might as well be dubbed financial self-sabotage. Research conducted by Superior Debt Services on one national attorney-based debt settlement company reveals a harmful fee structure that is exactly what the FTC aims to eradicate with its new ruling. Regardless of whether or not a settlement is actually made, the company takes 15% of the client’s total debt load over the first 18 months of a 36-month long program. So what does this look like in real life for the consumer? Based on our research, take a look at a hypothetical example below:

Client: Carries $20,000 total credit card debt on two cards: 1 with a balance of $15,000, and another with a balance of $5,000
Attorney-based settlement company: Sets the client up with a 36-month long program. The first monthly payment is $362.50, while the remaining 35 payments are $357.19. Remember that the company takes the monthly fees over the course of the first 18 months. These fees are 15% of $20,000, or $3000, stretched over 18 mos. This equals $166.67 paid to the debt settlement company each month over the first 18 months. Thus, only $190.52 is contributed toward real settlement money during the company’s fee collection period.

Timing is everything: Bottom line for the Consumer
So how does the attorney model affect the client above, and consumers everywhere? Upfront fees do not address the critical issue of timing in the debt settlement industry. Many creditors will offer prime settlement rates when an account is between 150-180 days past due, or right before it is about to charge off. In the case above, the small amount actually going toward settlement funds is simply not enough to take advantage of the great settlement deals that happen when critical timing is taken into consideration. Simply put, sufficient funds must be available at the right time.

Let’s take a deeper look at the client example above. Say a creditor is willing to take 30% of the total debt owed for a settlement. At the rate money is deposited into the client’s settlement account, only $1143.12 will be available for settlement by the time she’s been in the program for 6 months. She would need at least $1500, or 30%, to settle the card with a $5,000 balance.

And this is just the client’s small balance. If the client’s creditor will accept a $4500, or 30%, offer on the balance of $15,000 at the 6-month mark, the client will be even further away from having enough funds to secure a great settlement. At the rate of only $166.67 going toward the settlement fund each month, it will take the client an additional 18-20 months to save enough for the settlement. By this time the offer will be null and void, and the creditor will pursue other means of collecting the debt, such as suing.

Further, a $20,000 debt is the low end of the spectrum for those who seek debt settlement. The average debt-profile of a consumer in a settlement program is around $36,000 and up. Thus, it would take even longer to accumulate enough funds for an adequate settlement. This example also does not take into consideration those accounts that have already charged off and are not with collection agencies or lawyers.

If the attorney-based debt settlement firm chose to abide by the FTC ruling in the best interest of the consumer, and applied the all funds toward settlement for at least the first 6 months, the client would have $2143.14 in 6 months. This is at least enough to settle the smaller balance of $5000 at 30%, and begin building up funds toward the settlement of the larger balance.

The bottom line for consumers is that upfront fees do not go hand-in-hand with common sense. Services should not be paid for until they are actually rendered, especially when the client is deeply burdened with out of control debt.

Looking past the attorney ‘aura’
Hiring an attorney to fight your debt battle for you is not as foolproof as it might appear. Logically, consumers might think lawyers are more equipped to deal with their debt problems. In reality, lawyers are trained in law, not finance. Many lawyers who practice debt settlement also work on other cases, and may not have the time available to directly deal with your creditors all day long, the way many reputable debt settlement companies do.

Many lawyer-based debt settlement services guarantee results due to their in-depth knowledge of credit card regulations. Even while researching; it was difficult to not buy into some of the claims made on some attorney-based debt settlement websites. Even in the midst of such claims, it is critical for consumers to understand the way fees are collected. If the fee structure is not conducive to helping the consumer accumulate enough funds for timely settlement, than the ‘legal’ aspect of the settlement firm is of no benefit. Effectually, the attorney debt settlement model just might funnel many consumers into bankruptcy- the conclusion they were so desperate to avoid in the first place.

Further, attorneys who fail to follow FTC regulations for debt settlement are caught in a conflict of interests. Theoretically, lawyers are supposed to adhere to very strict ethical requirements. When clients must choose bankruptcy after entering one of these programs, either because they weren’t good candidates in the first place, or because upfront fees hindered the ability to secure good settlements, lawyers double-dip into consumers’ pockets. In this bleak situation, the client not only pays money toward the failed debt settlement program, but also toward bankruptcy and attorney fees. Not to mention the scar of bankruptcy.

So, the ‘aura’ of bankruptcy isn’t all it’s made out to be. Sure, it may feel comforting to have a lawyer on your side when you are in the midst of financial chaos, but don’t let the stress impair your ability to understand exactly what it is you are getting into.

After the dust settles following the October 27th, 2010 deadline for debt settlement companies to no longer charge upfront fees, consumers will see the attorney-based model for what it is- all talk and image with little ability to deliver real results for the consumer.

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