What Creditors Expect After a Debt Settlement Negotiation

The process of negotiating with creditors takes a lot of your time, energy, and patience. While it is important that you understand the process of getting into and eventually settling your debt negotiation, it is equally important that you understand what happens after that agreement is reached. Settling your debt with a financial lender is an official agreement that both parties are meant to uphold, so by understanding what creditors fully expect, you can be well prepared for what is to come after the conversation is over and the payments are due.

Make the Agreed Upon Payments

Upon reaching an agreement with your creditors, you will either pay off your settled debt in a lump sum up front or will agree to monthly payments for a specific amount of time. The decision on how you’ll make payments is based upon your current income, history with the lender, and budget. As such, the creditor you are working with will fully expect that you are able to fulfill your financial obligation.

It is important to remember that debt negotiation ends in legal contracts. As soon as you agree to how you will settle your debt, you are obligated to uphold your end of the bargain. If you signed up for monthly payments, failing to make them on time or missing a payment altogether can give your creditor permission to break the remainder of the contract. When this happens, you could rack up on additional fees and other repercussions that could cause more harm to your financial future.

Do Not Continue Using the Credit Line

If you are dealing with credit card debt, one of the worst things you can do during the payment process is to continue using the card. Most of the time, there will be regulations about this particular subject within the contract, but even if there is not, continuing to use the line of credit could cause major problems. In many cases, the credit card cannot be used because it is closed by the grantor due to lack of payment within 30-90 days or voluntarily closed by the borrower before the debt settlement arrangement was made. If you were forced to fall delinquent on your minimum monthly payments due to a valid hardship, it is very common that you will not have the option to continue using the credit line. Usually, debt settlement is agreed upon because you have made the case that you can not afford to pay back the amount you have already borrowed. By continuing to rack up money, you are essentially invalidating your argument, while also racking up additional debt that you are struggling to pay off.

Maintain Communication with Your Creditor

One of the key things to remember when negotiating with creditors is that, just like with any successful relationship, communication is key. During the debt negotiation process, your creditor wants to make sure that they will receive their money back and they truly will help you in any way they can to make sure that you both are successful during the process.

Any time you are having issues financially, the best course of action to take is to ask for assistance. By simply maintaining an open line of communication with the company you have an agreement with, you can work on battling your debt in a healthy and productive way that benefits your situation.

Creditors Expect to Trust You

When all is said and done after you finish your debt negotiation, the biggest expectation is that you establish a line of honesty and trust. The moment you chose to open a credit card or take out some kind of loan from the creditor, you assured them that you would pay them back and build your relationship from there. While we have outlined the general expectations of creditors after a debt settlement negotiation, the best way to truly know what your creditor wants is to set up a time for you or your debt settlement consultant to speak with them directly.

Contact Liberty Debt Relief to find out more about the debt settlement process and how it can help improve your financial future today.

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Laws Related to Debt Settlement That You Should Know About

Getting out of debt is not always easy. Aside from picking the right strategy that suits your financial situation, you also have to know what debt settlement companies expect and the legalities behind the situation. The best way to really fix your situation is to establish a basis of accurate information. If you know the most important United States debt settlement laws, you can avoid going into further debt, being taken advantage of by creditors, and even avoid legal trouble.

Fair Debt Collection Practices Act

The government wants to do its fair share in protecting consumers from unlawful debt collection actions, which is why they developed the Fair Debt Collections Practices Act (FDCPA) so companies cannot harass people over debt. Through this mandate, collection agencies are required to tell you who they are and what amount they are seeking to collect on behalf of what lender. From that point forward, you are essentially in charge of any and all communication with this collections agency.

According to the FDCPA debt settlement laws, not only is the collections agency not allowed to call outside normal business hours — around 9 a.m. to 5 p.m. — but you can also tell them what numbers and people they can and cannot call, as well as if you want them to cease calls to you altogether. At that point, they are only able to send notices by mail about any further actions they plan to take. If the agency continues to break these agreements and harasses you, you can file a complaint with the Federal Trade Commission and they will handle the situation from there.

Final Rule for Debt Relief Companies

Businesses like Liberty Debt Relief also have laws they must abide by so you can work with only the most trusted consultants available. In fact, the Federal Trade Commission issued the Final Rule for Debt Relief Companies, which states that is illegal for a company to demand upfront payment before your debt services are complete, all information about the services must be provided upfront before the services begin, and a company absolutely cannot produce any false advertising about their services.

Essentially, this regulation makes sure that you do not go into further debt by seeking help from an unaccredited company. Getting out of debt is entirely in your hands, as it should be. The main thing to remember when working with a third party is that their job is to help you negotiate debts and follow your lead, and anything that feels otherwise could be risky. Luckily, there are accredited debt settlement businesses available, including Liberty Debt Relief, that have a proven track record, a trustworthy reputation, and dedicated service.

State Regulations

Debt settlement laws are not only created by the federal government; states have their own regulations around the topic as well. While the specifics of each state are different, just about each one has a common establishment to protect consumers from debt relief scams. Some prohibit for-profit debt relief companies from doing business altogether, as well. The states that do allow these companies to do business often regulate how much the companies can charge consumers for their services, the contract procedure, and how these companies manage consumer and business finances.

Additionally, every state has an attorney general that maintains a database of unaccredited or questionable companies. When researching companies to work with, you can always check their status with your state’s attorney general office to find out if they have any information about that business’ practices. The Better Business Bureau also has a list of all businesses so you can see reviews, ratings, and other information about debt relief businesses and debt collection agencies before you get in contact with them.

If You Realize a Company Has Violated Regulations

Regardless of what your particular financial situation entails, you never have to succumb to harassment or scams. Just like with many other areas of the law, if you see something, the best way to handle it is to say something. Whether you are dealing with an unaccredited debt settlement company or a collections agency that is not following federal guidelines, you can report their practices and possibly sue for damages. When you are on the quest for debt relief, the last thing you need to worry about is faulty practices by companies that you are seeking help from.

If you do decide to report a business, contact your state’s attorney general’s office as well as the Federal Trade Commission and the Better Business Bureau. Procedures for doing so are on their websites, and you should be able to get in contact with someone quickly who can point you in the right direction of what to do following your report.

Work with a Trusted Company

If you are ready to start working toward getting out of debt, Liberty Debt Relief is a trusted company with a reputation for working with consumers to secure their financial future as quickly and easily as possible. With Liberty, a certified debt relief consultant with years of experience will work with you to ensure you get exactly what you want and need. Contact us today to get started and never pay an upfront fee!

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What Needs to Happen Before Settling Your Debt

There is no doubt that money is a stressful topic, especially when it seems that there is not enough in your pockets and too much in your outstanding balances. When debt seems to take over, many people find that settling that debt is their best option. While it very well may help countless people, it is crucial to understand what needs to happen before you choose to settle your debt with a company like Liberty Debt Relief.

Understand “Standard Qualifications”

The first thing to understand about debt settlement programs is that they are not for everybody. Some people begin looking at such programs when they are only in slight debt, meaning that they owe only a few hundred or less than $5,000. While those may be tough situations, they are not typically financially devastating and you can usually easily maneuver your way out in time. Negotiations are best for people who are in thousands of dollars of debt, usually as a result of a sudden hardship, such as divorce or being laid off from work.

If that sounds like your situation, it is essential to understand how a company creates strategies for debt negotiations and what they look for in successful cases. Some may look for clients to be in specific kinds of debt or within a certain limit of debt, while other are looking for people in specific kinds of financial hardship, such as rampant medical expenses. The general rule of thumb, however, is that debt settlement is best for people who desperately need help and who want to forego filing for bankruptcy.

Lay Out Your Finances

To truly know how a debt settlement company or expert does their due diligence in making debt negotiation work for you, start by taking a look at your own finances. It is always crucial to understand where you are at so you know exactly what you need and what you are potentially getting yourself into. The best way to do this is to write out all of your debts by type, amount, and interest rates and compare it to another written document that lists how much you earn every month and how much you spend on bills, debt, essentials, non-essentials, and savings.

Comparing this information will help you determine if you simply have a spending issue or if you truly do need financial assistance. If assistance is looking like the best option, try to narrow down how much you could realistically spend on paying off your debts every month without going into further debt with your bills or other parts of your budget. This number will be useful when negotiating with your lenders so that you can hopefully reach an agreement that suits both of your needs. In many cases, companies like Liberty Debt Relief can negotiate the new amount to about 50 percent of the original debt, but you also need to prepare for other potential outcomes.

Know What to Expect

Before you choose to sign onto a debt settlement plan, there are a lot of fine details you absolutely must know and understand. First of all, settling debt is a process that usually takes between two and four years. The problem does not simply disappear once negotiations are over, either. While you will likely not have to make multiple payments to various companies every month anymore, you will still be required to make a single monthly payment on time until the debt is paid off. Failure to stick to a designated payment plan can put you at a huge risk of getting into even more debt because the company can then break the contract and charge you an even higher interest rate than what you began with.

Talk to a Reputable Expert

The best way to find answers to all your questions, including “how does debt negotiation work” and “how will it impact my financial future”, talk to a trusted Liberty Debt Relief consultant today. They will sit down with you one-on-one to find out what you need to better your financial circumstances and how you can do so as quickly and efficiently as possible.

Contact Liberty Debt Relief today to take a leap forward into a bright financial future.

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5 Strategies Debt Settlement Experts Use During Negotiations

Getting out of debt is difficult, especially if you do not have experience in doing so. Luckily, there are companies out there who are experts in this area and can help you get out of debt a lot quicker and easier. While there are many experts out there to choose from to help, the best debt settlement companies will have years of experience and will work closely with you and your lender to create debt settlement strategies that benefit all involved. We at Liberty Debt Relief specialize in these negotiations. Here are five of the strategies we use:

1. Working with the lender, not the collector

Before debt negotiation services even begin, your debt settlement expert will want to know exactly who your lender is, how much you owe them (and for how long), and who, if any, debt collectors have been contacting you. Rather than dealing with the collector, however, a debt settlement expert will work with the lender directly.

As is turns out, most lenders only resort to debt collectors when they can no longer get in contact with you and, as most companies do, they have to dedicate more time to other customers. The downside to this move is that using a debt collector to get your money actually costs lenders an additional fee. Settlement experts know lenders want to avoid that additional fee and will call them directly to sort out the situation, saving both you and the company money. This can also help leverage the negotiations and make your creditors more willing to settle.

2. Building long-term relationships with lenders

The best debt settlement companies maintain positive relationships with various lending companies. If they have a proven track record of helping consumers settle their longstanding debts, they also have a proven record of making sure lenders get the money they are after. Many debt settlement experts will have a direct contact at various lending institutions that they can get into a conversation with on your behalf.

Those relationships can often make it significantly easier to settle your debts quicker and easier because the lender knows that they have a higher chance of getting paid in a shorter amount of time.

3. Explaining your situation

Once debt negotiators begin working on debt settlement with the lender, their strategies take an emotional turn. At the end of the day, companies want their money, so they need a good reason why you are not able to pay up. Your debt settlement expert is the one who will use your financial hardship to make an impact on the company representative they are working with. Whether you went through a divorce, the person who earned most of the money in your home suddenly died, or you were laid off, your negotiator will make sure the lender knows how bad you are struggling but are truly wanting to pay the company what you can.

A debt settlement is only available if you are not making payments to your lender, usually from three to six months. If a company sees that you are still making regular payments, they are less inclined to settle because they can simply keep charging you interest and will fully expect you keep paying the adjusted amounts. However, by ceasing your payments altogether, you are showing them that you truly can’t make the payments and they would generally rather agree to a smaller amount altogether than for you to not pay them a dime.

4. Being persistent and ready to haggle

The key to a successful debt settlement is the negotiation. The best debt settlement companies will not be willing to take the first counter offer a lender provides them. Instead, they focus on you and what you can actually afford to settle for. Before even making an offer to your lender, they will sit down with you, look at your debts, income, and budget to help you come up with various payments and lump sums to pay your lender that are actually affordable.

In the best case scenario, a debt settlement expert will convince your lender to slash the debt by about 50 percent or more. However, not every lender will be willing to cut your debt by that amount, so the debt settlement company will also make sure to determine the optimum amount you can reasonably and definitively pay during a settlement. These negotiations may take a few months, but as long as your negotiator is persistent and consistent, there should not be a problem in getting the settlement you can afford.

5. Making an offer companies can’t refuse

The last and final step settlement companies take during their client’s debt settlement strategies is to make an offer to your lender that will benefit them in the long run. By this point, you have not been making payments towards the outstanding balance on your account and the one outcome that every lender wants is to receive some form of payment. Believe it or not, there is actually a limit for how long a company can keep you in debt, and if they do not receive your payment before then, they lose the money from you altogether (even though your credit will take a long, hard hit). Therefore, it is better for them to accept a smaller amount than to accept nothing.

Official debt settlements are also signed by you, the negotiator, and the lender to certify that all parties understand what is to happen. When you sign the settlement, you are agreeing to either pay a lump sum or to make smaller monthly payments with no interest for a few years until the new outstanding balance is paid off. There is also the agreement that you will make your payment to the lending company itself and not a debt collector, if one has been assigned to your case, so that the lender does not have to pay the collection agency additional fees.

Contact Liberty Debt Relief to learn more about these expert strategies and how we can get started on relieving your debt today.

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Tips for Becoming Debt Free While Still Celebrating the Holidays

Tis the season of giving! With that holiday spirit circulating through families and friends, it can be difficult to not show everyone how much you care about them with lots of gifts. While showing people how much you love them during the holidays is always a fun time, it can put a serious damper on your finances. If one of your New Year’s resolutions is becoming debt free, here are some great tips and tricks from us at Liberty Debt Relief to help you get a head start, while still making sure everyone on your list gets a gift they will love.

Tip 1: Know Your Budget

Anyone who has ever asked how to be debt free receives this tip as their first answer — set a budget and stick to it. If you do not already have a budget in place, take the time to look at your essential costs every month, such as rent, car payments, food, phone, utilities, insurances, and so forth, as well as your non-essentials, including leisure activities, monthly subscriptions, and more. Whatever surplus of money you have after your essentials and savings you can allocate toward your holiday spending. Whether you have $100 to spend or $1,000, the key is to make sure you do not take money away from your bill payments just for holiday gifts.

Tip 2: Stay Away from Credit Cards

Along with not dipping into the essential categories of your budget, it is also important not to get an extra credit card or loan just to help pay for presents. While it may seem worth it in the short term to be able to make as many people as possible happy during the season, taking out an extra line of credit can set you up for a bad situation in the new year and prevent you from becoming debt free. You will have to start payments in January and, if you do not have the money now, you will likely not have it within just a few weeks. Taking out an extra line of credit puts you at risk of significantly lowering your credit score (putting you into more debt) and can have a severe impact on your mental and emotional health soon after January first.

Tip 3: Limit Your List

If you are one of the millions of people who are limited in what they can spend on their loved ones during the holidays, there are plenty of alternatives available. Instead of spending $50 for each of the people on your list of 100, consider cutting down on what you get individuals. Your hairdresser, for example, does not necessarily need that beautiful coffee mug you saw at the department store. You can also get gifts for couples and families instead of individuals to save some money. If you are really strapped for cash but want to give those you are closest to a gift they can truly cherish, consider giving them gifts of time instead of value. Plan a home cooked meal and night of card games with your grandparents, bring your friends over for a game of White Elephant and holiday movies, or maybe even give out coupon books of activities that can be done throughout the new year. Not only will this create lasting memories, but learning how to better allocate funds over time can help you be debt free all year long.

Tip 4: Consider Doing it Yourself

If you really want to start off New Year’s as debt free as possible, consider going the do-it-yourself route. Not every gift has to be an expensive luxury item. You can easily save hundreds of dollars by making similar bulk gifts for all or most of the people on your list. Sweet treats are always a holiday favorite and you can easily put a cute bag of cookies or hot cocoa mix together for the ones you love for only a dollar or two per person. If you like being extra crafty, there are great items you can make, like Christmas tree ornaments, that everyone will love. Choosing to create gifts instead of buying them is always a great step forward to becoming the debt-free person you have always wanted to be so you can start off the new year stronger than ever.

Tip 5: Put Your Holiday Bonus to Good Use

Not everyone gets a holiday bonus at work, but for those who do, it can be a huge factor in how you start off the new year financially. These bonuses can generally be up to several hundred dollars. Instead of using that on additional presents or splurging on a longer vacation, bonuses are the perfect way to make payments toward credit cards, student loans, or even pay some bills in advance. Anyone looking for helpful tips on how to be debt free should always start with their budgets and see where extra funds may be better used and extremely helpful in lowering their total debt.

Tip 6: Use Those Credit Card Rewards

Similar to Christmas bonuses, credit card rewards can be a major financial asset. Many credit card companies offer cash-back promotions throughout the year when you use the card at various retailers, gas stations, and grocery stores. You could have another several hundred dollars available towards your debt. If you own several credit cards and have a lot of extra cash-back funds available, this could be the opportunity that allows you to get out of debt without taking money from your holiday budget.

No matter how you spent the previous year, the new year is the perfect opportunity to make progress toward all of your goals — including the financial ones. Becoming debt free is a huge accomplishment and by following a few simple steps, you can earn this achievement of a lifetime for a future that merry and bright.

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Settling Accounts? Deciding What to Negotiate During a Debt Settlement

There seem to be hundreds of options available to help people get out of debt these days, and figuring out the right one can be more stressful than the debt itself. Luckily for those who choose to go the route of debt settlement, all of those options can be limited significantly. When it comes to settling accounts, the key to success is figuring out the best place to start. If you are one of the millions of others ready to get started, use these tips from us at Liberty Debt Relief to find the right starting place for you and your financial future.

Look at Interest Rates

When people are figuring out how they will get out of debt, they will often go straight to the overall numbers that they owe. They may see that they owe most of their money to credit cards, a personal loan, or maybe even private student loans, and choose one of those solely on that information. While looking at what you owe overall is crucial to getting out of debt, it is also extremely important to look at the interest rates for each of your debts.

Interest rates are what make or break just about any financial situation. When it comes to settling accounts, it is often significantly better for your outcome if you negotiate the account with the highest interest rate so that you can avoid having to pay heavy fees while you are getting out of debt. For example, if you owe $10,000 on a credit card with a 22 percent interest rate and you owe $11,000 on a personal loan with a 15 percent interest rate, it would be much better to negotiate the credit card debt. This is because, if you were to want to pay off your debt within five years, it would be cheaper for you to pay back a negotiated $6,000 with 11 percent interest rate than it would a negotiated $8,000 with a 15 percent interest rate.

Consider the Snowball Method

Just as with many things in life, sometimes the best way to motivate yourself to complete a task is to take small steps along the way. When it comes to settling some of your debt accounts, this can be achieved with the snowball method. With this strategy, you would choose to settle the accounts that you know you can pay off right away. Instead of choosing to settle a $30,000 debt that you will have to make monthly payments on, you could choose to settle a $5,000 debt instead that you can pay immediately. For many people, this is a sure way to stay motivated and encouraged to get out of debt in both the short and long terms.

This method can be applied in various ways. Some people may choose to do it regarding the total amount owed per account, others may prefer to do it by interest rate, and even more individuals will prefer to categorize by type of account, such as credit card or loan, or even by company if they have multiple debts under the same lender. Whichever categorization you choose, keep in mind that the goal with debt settlement is to get out of debt sooner rather than later.

Do Not Forget About the Rewards Programs

The beauty of settling debts over multiple accounts is that you can choose which ones you specifically need more assistance with. With so many credit cards having great cash back reward programs, it may be beneficial to look into settling the debts that do not offer similar incentives. If you refrain from using your credit card rewards until you need them, you could potentially rack up hundreds or even thousands of dollars that you can use to eliminate an outstanding balance with that company. It is always better to put those funds to use and not let them go to waste so that you can negotiate the terms of balances for which you do not have extra assistance.

Consider the Types of Debt You Owe

There are various types of debt out there. If you are considering settling accounts that you owe, there is a good chance you have your own varieties of debt. Some types, for example, are not even able to be settled, such as federal student loans, so you can automatically take those off the list when narrowing down the debts you will get settled.

Other types of debts, such as credit cards and department store credit cards, are usually easier to settle at a significantly lower cost. If you are torn between settling personal loans, business loans, credit cards, and department store cards, it is usually in your best interest to go for the cards.

Speak to an Expert

If you are ever in doubt about what it takes to begin settling your debt and credit accounts or just about finances in general, the best thing to do is to speak to a trusted professional. Companies such as Liberty Debt Relief will lay out all of your debt accounts, your income, and your budget to help you create a settlement plan that ensures you pay off your debts in a timely fashion. Sometimes all it takes is a little outside help to make sure you meet your goals.

Do not let your financial situation and the fear of debt take over your life. By following our tips, you can be well on your way to a debt-free future full of success

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