The facts about debt consolidation and the things you might not know.

Over the years various people have struggled with debt of one kind or the other. Over that span there have been various tools in helping them deal with this situation. Recently it seems that the number of people drowning in debt has increased considerably. This has brought the various debt relief programs to the forefront of our minds both because of our heightened awareness of topic and because of increased media coverage and advertisements.

For the most part many of the debt relief programs that are available to people have been around for a long time. Of course there are always those fly by night “eliminate your debt” scams that crop up then go away. For an example the idea you can go to court and threaten to sue the creditors if they don’t eliminate your debt. Beware, that is no better than snake oil and can put you in a much worse situation then what you are right now.

The debt relief programs I am speaking of are valid and legal and have been put in place to assist people in dealing with an unmanageable debt situation. But it is important to know all the details of these options and how each one works.

Being in the industry for many years I have head countless clients say they are looking to do debt consolidation. What they don’t realize is that almost all of the credit card debt relief options are debt consolidation programs.

The definition of a debt consolidation program is a plan that will allow you to consolidate all of your payments into one so that you are not making individual payments to each of your creditors. Now I understand that the way I worded it might not be exactly what you were looking for and the reason for that is that you are thinking of one particular form of debt consolidation, not the broad category.

Let me explain to you each of the debt relief options and how each one of them will help you to consolidate your debt into one monthly payment.

Let’s start off with one of the oldest forms of debt help, which is called Bankruptcy. This option has been around for many years and more recently was amended to make it more difficult to qualify for. What many people do not realize is there are various forms of bankruptcy. Most commonly thought of is chapter 7, where your debt is forgiven and you do not have to pay back anything to the creditors. This however is the most difficult to qualify for. More common is the chapter 13 bankruptcy. This is a debt consolidation program where the courts decide how much you can afford to pay on a monthly base and you pay the trustee who distributes the payments to the creditors. You could end up paying 100% of the debt and that option will be on your credit for the longest amount of time.

The next debt relief option is consumer credit counseling and is commonly thought of by people as a debt onsolidation program. This is where you hire an agency to negotiate your interest rates down on all of your creditors, then you mane one monthly payment to the agency. You end up paying back about 130% of what you owe over 5 to 7 years and the monthly payment you make is typically close to what your minimum payments were for the creditors.

Debt resolution is another option that has gained popularity in recent years. Essentially you hire an attorney or law firm to negotiate your debt for less than what you owe. You then make one monthly deposit into a trust account which is used to settle with the creditors. Since the FTC regulations that were passed in October 2010, this option has gained in popularity throughout the debt relief industry as a way to get around the regulations ban on charging upfront fees.

Many of these debt settlement lawyers will charge you a retainer to start and then charge legal fees that they deduct from each of your monthly deposits throughout the entire program on top of their settlement charges. First of all this will increase your total program cost. Second people assume that by having a debt settlement law firm negotiate their debt, they are protected more and will be able to do a better job.

The reality is that the law firm is not doing the negotiating. They sub contract debt settlement companies to do all of the maintenance and work on your account. Also, they do not protect you since they are only representing you for the purposes of negotiating your debt and nothing more! They do not represent you in court and in many cases will not even help you answer a summons should you receive one. This is evident by the number of class actions law suits and states’ attorneys that are going after these lawyer bases settlement debt consolidation companies.

The final debt consolidation program available is called debt settlement. This is where a reputable accredited company will negotiate with your creditors on your behalf and will allow you to settle for less than your full balances with your creditors. Companies that follow the regulations will not charge you any fees until they have successfully negotiated your accounts. You save your money in a dedicated account which you have full access to and as each creditor is settled with they are paid from that account.

If you would like to hear more details about all of your options then you can speak to a debt analyst with years of experience who can review your situation and give you the information you need to make the right choice. Simply fill out the short form on the right column or click the green button.

January 31, 2012

Getting a home loan After Bankruptcy

There are two issues that will be taken into account with the lender, they’ll verify your revenue and probably request a down payment.

Waiting period

There is a new waiting period you must face after bankruptcy continues to be discharged. Most lenders requires that 3 several years have gone by since discharge before also considering granting that you simply loan. During this time you should make sure your bills are paid on time and you will not fall behind obligations, so when you finally apply for a loan your credit will have improved considerably and you are able to get a home loan without the need of money down.

Virginia Bankruptcy Laws

Down Payment

If you intend to get a mortgage loan just before this waiting period of time, you’ll need to meet very strict specifications. You’ll have to demonstrate that you haven’t missed just one payment nor you have late payments at all. You’ll also be asked to provide a down payment to get approved. You’ll have to put just as much as 10% of the property value down. If you can’t give a down payment it really is quite difficult to get approved but there are still other options.

You can always borrow the amount of money from family or friends. You can often repay them since whenever you get the home loan you are able to request a household equity loan as you’ll at the same time own the house. Bear in mind though, that some creditors are reluctant to just accept down payments certainly not raised directly with the applicant and you might be obligated to reveal this info, so you should ask the loan provider before making such a move

There are programs that will help you with down payment too. These basically supply the seller the opportunity to help the buyer with the down payment which is otherwise strictly not allowed. You can ask your broker for this information as they are surely in a position to provide it. Some lenders may also be reluctant to accept this sort of transactions, but you may always try. Texas Bankruptcy Laws

Another option would be to apply for federal government grants, there are grants specially designed for helping people in this sort of situations. Consult with local offices with your broker weather you be eligible or not pertaining to such aid. As opposed to the previous options, government grants do not need to be repaid so they should be the first solution to consider as you could save thousands not only by not paying back the principal but in addition by avoiding pursuits. Utah Bankruptcy Laws

Where to discover information

You can find every piece of information, contacts and numbers online by searching websites, but if you’re feeling you need some guidance it is possible to always seek specialist. You can contact your broker or you could join a number of the online sites that provide access to many house loan lenders and federal government grants. That way it is possible to solve this issue from the comfort of your property.

Mary Wise, a professional consultant with 20 years in the financial field, helps people along the way of securing personal loans, mortgage, refinance or consolidation loans and avoiding consumers from falling into the hands of deceptive lenders.

Tags: Bankruptcy, Bankruptcy Laws, Debts, Finance.