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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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What Happens to Your Money During the Debt Settlement Processes?

With credit card debt at a record high in America, consumers are increasingly considering debt settlement as a solution to their financial woes. But, how does the debt settlement process work? Can anybody qualify for debt settlement with credit card companies? Learning the facts before you begin negotiations can save you time and money.

How the Process Works

Debt settlement can only occur if your creditor has agreed to accept less than what you owe. For many people, this is the best route to financial health. Debt settlement with credit card companies can help you avoid bankruptcy and finally stop the incessant debt collections calls. The debt settlement process can actually take two forms. You can call the credit card company yourself and negotiate a settlement for your outstanding balance. Or, you can employ the services of a debt settlement company, such as Liberty Debt Relief, to negotiate with your creditors on your behalf.

Why Would Your Credit Card Company Agree to Debt Settlement?

In an ideal world, every credit card company would like to recoup the entire debt, plus any interest and fees it accrues. However, if the credit card company determines that you are genuinely unable or unlikely to repay the whole debt, they may agree to a debt settlement.
Creditors may agree to a settlement so that they can recoup at least some of their money and minimize the loss. This process is usually employed after several missed payments and if your account has been sent to collections

What Happens To Your Money During Negotiations?

What happens to your money during the debt settlement process depends on several factors. Firstly, it depends on whether you are negotiating the settlement yourself or if you’ve enlisted the help of a debt settlement company. If you’re negotiating yourself, the short answer could be, nothing, but you will be burned in other ways, such as having few solutions when dealing with creditor calls and the stress of negotiating back and forth. However, debt settlement companies often ask clients to dedicate a specific bank account for stashing the settlement money so it can be ready to be paid to the creditors when the negotiations are complete. This account is often administered by a third party, but you still have access to these funds.

Your lenders can also employ a series of legal actions to help them get their money back. These are:

Wage Garnishment

There is a legal avenue for creditors to garnish your wages or take money directly from your bank accounts in order to clear a debt. But, don’t panic just yet. Creditors can’t unilaterally decide to garnish your wages. This action requires a court order.

Exemptions

Lucky for you, certain forms of accounts or income are exempt from garnishment. These include:

  • Student Assistance
  • Social Security / SSI Benefits
  • Veterans’ Benefits
  • Military Annuities and Survivors’ Benefits
  • Civil Service and Federal Retirement and Disability Benefits
  • Railroad Retirement Benefits
  • Merchant Seamen Wages
  • Federal Emergency Management Agency (FEMA) Federal Disaster Assistance
  • Longshoremen’s and Harbor Workers’ Death and Disability Benefits
  • Foreign Service Retirement and Disability Benefits
  • Compensation for Injury, Death, or Detention of Employees of U.S. Contractors Outside the U.S.

If you can prove that the money in your account originated from one of these sources, that money cannot be legally garnished or frozen.

Considerations for the Debt Settlement Process

Before you start negotiations, you should keep a few things in mind:

  1. Debt settlement companies will charge fees for their services. Never use a company that asks for any sort of payment up front, but also find out exactly how much you will owe them at the end of the process.
  2. Choose your debt settlement company wisely. Some creditors may have a “blacklist” of companies they refuse to work with. Liberty Debt Relief has achieved settlement offers from a variety of lenders on behalf of our clients.
  3. Be wary of any company that makes grand promises of settling your debt for pennies on the dollar. For some, settling for less than half of what is owed is possible, but not for everyone.

Liberty Debt Relief

The experts at Liberty Debt Relief have helped millions of client reclaim the lives and their financial freedom with relief from overwhelming debt. Contact us today and find out how we can help you do the same. The consultation is free.

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Debt Settlement for Credit Cards Vs Credit Repair

When you’re struggling with overwhelming debt, it can be hard to get a clear view of all your options. Between debt settlement, credit repair, or even bankruptcy, the details can be confusing. Liberty Debt Relief has been helping customers just like you regain their financial health and move confidently into the future. Here, we’ll cover the differences between credit repair and credit card debt settlement and how each can affect your finances.

What is Credit Repair?

Simply put, credit repair is the process of improving your credit score by minimizing or eliminating negative items from your credit report. Checking your report and going over it thoroughly can help you identify incorrect information, such as late payments for accounts you paid on time. If you do discover a mistake, the next step is contacting a lawyer or financial expert who specializes in credit repair and can help you build your case.

These professionals will be able to contact the credit bureaus on your behalf and work on getting the false negative marks removed from your credit history. The process takes time, and you’ll have to provide proof to support your claim, such as a payment confirmation number when arguing a late payment, but this can improve your credit score. Credit repair, however, cannot get rid of or lower your outstanding debt.

Credit Card Debt Settlement

Settlement is an option for gaining relief from credit card debt or some other unsecured debts. This can only happen if the credit card company or lender agrees to accept a settled amount. Creditors are likely to negotiate when it becomes clear that they will not be able to recover the full debt, usually after several missed payments or an extended period of delinquency. Companies like Liberty Debt Relief can help you during the process and are typically more successful at getting the outcome you are seeking due to years of experience with debt settlement. This process also takes time, but it can significantly lessen your debt (sometimes even cutting it in half).

If you elect to employ a debt settlement company, be sure to get the fees in writing upfront. Never utilize a service that requires any form of upfront payment, as this is illegal and you should receive the assistance you need before paying for services. Liberty Debt Relief does not charge any upfront fees.

So, Which Option is Better?

Deciding on credit repair vs. credit card debt settlement can be tricky to navigate. Of course, if you’re struggling financially like so many Americans today, you should employ every option available to pay off your debt. When it comes down to it, debt settlement for credit cards will help you out of debt, while credit repair can only ensure your payments and debts are recorded properly. On the other hand, if you’re able to keep up with your payments but are just concerned about mistakes on your report, credit repair is probably more appropriate.

Liberty Debt Relief

Contact Liberty Debt Relief today for a free consultation. Our experts can evaluate your specific situation and provide options to match your needs. Regain your financial health and freedom with help from our amazing staff. If you are overwhelmed by credit card debt, medical debt, private student loans, or other forms of unsecured debt, the team at Liberty Debt Relief can help with your negotiations.

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What Is The Cheapest Way to Get Out of Debt?

When the bills start adding up and your financial situation seems to be overwhelming and out of control, finding a solution can seem impossible at first. Luckily, there is plenty of information available from reputable companies and Debt Consultants to help you get out of debt.

At Liberty Debt Relief, we want to make sure that you not understand all the avenues available, including the cost of debt settlement, consolidation, management, and more. Of course, the right and cheapest debt relief path will depend on your particular situation and goals.

Debt Settlement

One of the most popular solutions, debt settlement allows consumers to pay a lower overall amount on the debts they owe. Along with helping people set up more affordable monthly payments, debt settlement negotiations can help people avoid bankruptcy and pay back excessive debt within just a few years. The cost of choosing this debt settlement program depends on what company you decide to work with and how much money you are looking to settle. For many people, this is the most affordable debt relief solution.

The settlement companies who will work with creditors on your behalf require fees to assist in this process. Your Debt Consultant will dedicate a significant amount of time to your case and will often charge either a flat rate or a certain percentage of the amount of money you will save for their services. While the service fee may seem counterproductive, it is just a small cost of debt settlement compared to what you will earn mentally and financially. More importantly, you will only have to pay these fees once your settlement is complete, as long as you use a reputable company like Liberty Debt Relief.

Debt Consolidation

Similar to debt settlement, debt consolidation is another way to achieve financial success quickly and efficiently. Unlike a settlement which eliminates a good portion of your debt, consolidation simply moves the debt to another account. This route does require additional fees depending on whether you choose a debt consolidation loan or a balance transfer.

If you are looking for the cheapest path to debt relief, this is a great option to put at the top of your list. Of course, this depends on your ability to get a loan with a lower interest rate than the ones you already have, as well as your ability to make continued monthly payments. If your credit score is such that a great interest rate is out of reach or if you’re concerned you may not be able to make payments on time, debt settlement is likely a better option for you.

Debt Management Plan

Debt management plans are a combination of getting out of debt and making steps toward financial goals. A Debt Consultant from a reputable company will negotiate with your credit card and other financial companies to get you a lower overall interest rate and consolidate your debts. This particular avenue also provides you with the means to pursue one of the most affordable forms of debt relief available — preventing debt with a sustainable budget and access to endless information.

Your financial advisor will help you understand what makes an effective budget and introduce you to numerous tips and tricks to keeping your debt as minimal as possible over time. Because other plans help you get out of debt in the short term, also enrolling in a debt management plan will keep you from getting back into a similar situation so you do not end up paying even more money for assistance and to your loan companies.

Earn Additional Income

If the thought of paying for an outside expert to help you in your debt relief quest seems a little too out of your league, there is a path that may suffice for those who are not as deeply in debt as others. If you are only a few thousands dollars in debt, for example, it may be worth it to simply earn additional income until you can pay off what you currently owe. Consider getting a part-time job, becoming a freelancer, or even selling some old items — such as clothes, home items, or basement-ridden Christmas presents — to get some extra cash.

If you can earn an extra few hundred dollars every month, you can easily apply those funds to your debt accounts. This will help lower the accrued interest, raise your credit score and ensure that you get out of debt quicker and easier than originally thought possible.

Understanding the Costs of Debt

Though settlement is typically the most affordable debt relief for most people, getting some third party perspective can be extremely useful. Talk to someone at Liberty Debt Relief or another debt expert to better understand what getting out of debt entails and the best and most affordable options for your financial success.

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Signs You may Need Help with Debt

There comes a point in just about every person’s life when they go to make a large purchase and realize that their credit cards simply will not work and their bank will not allow them to overdraft their account. This could happen for various reasons — maybe you recently lost a job and have not found a new one or maybe you are just not that experienced in managing finances. Whatever the reason for maxed out credit cards, it is certain you could use some professional debt relief advice.

Easily the best part about seeking this advice is that it does not require you be in hundreds of thousands of dollars of debt. There are quite a few warning signs that signal it is time for you to seek some extra guidance. If any of these situations sound like your own, reach out for a professional hand to help pull you out.

Minimum Payments are Your only Payments

While minimum payments are a great way to prevent late fees and debt collectors, they do not do much in the way of helping with your debt. Minimum payments are used by credit card companies to ensure you make some kind of gesture of financial good will every month, but, unless you pay off your total statement balance every month, you will only accrue more interest on your amount owed. In fact, 43 percent of Americans do not pay their credit card balance each month. Many times, the interest that is added is significantly higher than the minimum payment you made, essentially making a minimum payment useless if you owe several thousand dollars.

There is No More Credit Available

A maxed out credit card usually means two things: one, that you have drained through all of your available funds, and two, that you have likely failed to make any significant payments toward that balance. The first step in looking for how to get help with this kind of debt is to take a look at all of your accounts and what you do and do not have available to you. If you have several credit card or loan accounts, you need to find out how much money is owed on all of them and how much balance you have left. People with a large number of accounts typically have a larger debt owed, and in many cases, they do not even realize the dire financial situation they have put themselves in.

Your Credit Score is Plummeting

Credit scores are basically the holy grail of financial worth. These scores are essential in determining your interest rates, the kinds of accounts and loans you are eligible for in the future, and can even determine if you will be able to get approved for a large purchase, such as a vehicle or home. People who have high credit card debt or other forms of debt likely have low credit scores that fall under 650, which will make any lending experience now or in the future that much more difficult. The only way to help with this debt and improve your score is to pay off the debt and figure out a strategy to make sure you do not get back into financial distress.

Savings are Non-Existent

When debt gets high, savings get low. Millions of people pay off what they can, when they can, with what they happen to have available. Since savings accounts are usually seen as non-essential for so many people, they are usually one of the first corners people cut when they attempt to get out of debt on their own. Truthfully, unless you happen to have millions of dollars in savings that would not even feel a dent of a few thousand, using savings as your solution for figuring out how to get help with debt is not the best way to go.

Medical Visits and Emergency Funds are Never a Consideration

Similar to savings accounts, people who are in significant debt usually take all possibility of emergency funds off the table. They will usually give up important doctor appointments and wellness checks, avoid emergency rooms and ambulances at all costs, and will not set aside money in case an incident does occur. While allocating extra money to your outstanding financial accounts does help with debt in the short term, you also put yourself in the likely situation that you and your family are only one broken bone, sprained ankle, flu, or other incident away from going into worse debt than you started off with.

Budgets are Uncharted Territory

Budgeting has a reputation for being complicated to figure out and even more difficult to stick to. While it certainly takes time to figure out a budget, it is not impossible. One of the primary reasons so many people end up in such significant debt is because they do not know how to create a budget that works with their lifestyle rather than against it. Many seem to believe that they have to take a hardcore financial diet when using a budget that limits the things they love and what they find essential in their quality of life. In reality, that is not the case. A budget is actually a great tool to help you understand how to prioritize all of the things you love and to find a way to allocate funds as best as you can in the long term and short term. If you are not one of the ⅓ of Americans who have a household budget, you could seek the help of a financial expert.

Your Health is Suffering

One of the most significant indicators that you are in over your head with debt is your mental, physical, and emotional health. Money is one of the leading reasons for stress in the U.S. and has been linked with thousands of people developing depression, anxiety, ulcers, daily headaches, and much more. Understanding how your financial success determines your personal health is essential, and, if you do not have a grasp on it, it may be a good time to get help with debt.

Take Charge of Your Debt for a Step Toward Your Future

Debt has become almost a rite of passage for millions of people in the U.S., but it does not have to be. If you are worried that you have dug yourself into a poor financial situation, or you simply want to address the issue before it begins, Liberty Debt Relief can provide the debt relief assistance you need to succeed. Contact us today and we will get started on helping you take a giant leap forward right away.

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Dangers of Ś and How Debt Settlement Negotiation Avoids Them

Getting into serious debt can be a terrifying experience. Between the endless phone calls, emails, statements, and notices, it can feel like debt relief options are virtually non-existent. Many people who experience this end up filing or attempting to file for bankruptcy because they feel there are no other routes to consider. With an accredited debt relief agency, however, filing does not have to be your go-to solution.

One of the best and often overlooked ways to get you and your family out of financial hardship is allowing a debt relief professional to negotiate with your lending companies and teach you how to avoid bankruptcy in the short and long term.

Bankruptcy Does not Eliminate All of Your Debt

There are two main types of bankruptcy — Chapter 7 and Chapter 13. Filing for Chapter 7 will lead to the liquidation of your major assets, including investments, savings accounts, automobiles, boats, and sometimes even homes, as a way to pay back your remaining debts. Chapter 13 does not require you liquidate any goods because those filing Chapter 13 must earn enough money to take part in a repayment plan organized by the court.

Regardless of which chapter you seek to file for, however, it is important to realize that one of the biggest, and perhaps most dangerous, misconceptions about bankruptcy is that it quickly eliminates all of your debt so that you can essentially start over. That is simply not the case. Filing does eliminate some debts — and none without a steep price — but does not include taxes, liens, student loans, alimony, child support, fraud-based debts, association fees, and many other categories.

One of the only ways to truly get assistance with all of your outstanding unsecured debts is with debt settlement negotiation. An experienced debt relief specialist will work with you and your lenders to significantly reduce what you owe and set up a payment plan so you can pay off your debts within just a few years.

A Large Mark on Your Credit Report

As important as it is to know how to avoid bankruptcy at all costs, it is equally important to understand how to keep your credit score from sinking too low. Going bankrupt can significantly decrease your credit score by more than 200 points. Unless you happen to have a perfect score of 850 at the time you go bankrupt — which is highly unlikely — this drop could easily bring you under 600, which is considered a poor rating.

Bankruptcy, regardless of what kind, stays on your credit report for 10 years. During that time banks, companies, and even housing organizations can see your status, which can make it nearly impossible to get approved for a home or car loan or credit cards. If you do happen to get approved, the interest rates will be higher than average, likely close to 30 percent.

Debt settlement negotiation avoids this 10-year financial stagnation by paying off a debt you can afford rather than eliminating them altogether. While it can lower your score temporarily while you pay off your debts, it can bounce back up and will not automatically hinder you from getting a new loan or credit line if you need it.

You Put Your Assets on the Line

Bankruptcy does not just disrupt your life financially, it can also take a large toll on your property. If you file for Chapter 7, which most people do so they do not have to pay off their debts, you may be putting all of your highly-valued assets at risk. If you own a boat, land, homes, or vehicles, have won the lottery, or received an inheritance, the bank will likely cash those assets in. The money earned from those properties becomes part of your bankruptcy estate, which the bank will then divide between the lenders to which you owe money.

While you will not necessarily lose all of your properties and become homeless and penniless overnight, there is a high risk of losing large sources of income, especially if you rent out your home or property. Unfortunately, you do not get to decide what the state will or will not take, and they can take any additional valuable assets you may receive up to 180 days after you file.

If you choose to pursue debt settlement instead, you will work with someone who will negotiate your money without compromising your assets. Nobody wants to lose everything they own when they already feel like they are at the bottom, which is why a debt relief expert works diligently to ensure you can reach a settlement that works for you. This strategy will never force you to give up your belongings or property and will always make sure you know exactly what to expect well in advance of entering a deal with your lenders.

Avoid Making a Bad Situation Even Worse

Bankruptcy should never be your first option when it comes time to develop a strategy to get out of debt. Between a decade of harm on your credit report, the risk of losing significant assets, and the fact that you will not even be able to pay off all of your debts with the status, there are usually much better options available. Talk to Liberty Debt Relief today to find out how to avoid bankruptcy and find the debt settlement solution that works for you and your future.

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