You may wonder if by consolidating your debt you really will be able to reduce your income-spending ratio and obtain monthly payments you will actually be able afford. This is a question that needs to be answered by carefully considering your debt as debt consolidation cannot be successful with all kind of loans and other debt.

If debt and bills keep pilling up you may eventually have to make a decision. Whether that decision is to take a debt consolidation loan, contact a debt consolidation agency or resort to more critical decisions like filing for Bankruptcy, it is definitely a choice that cannot be rushed in.

Debt Consolidation = Debt Reduction?

Debt consolidation in particular can provide up to a 70% of debt reduction in certain situations, however, this is an ideal scenario. Only if your debt is composed of unsecured loans and credit card balances or store card balances you will be able to achieve such amazing results.

However, if too much of your debt is secured, it is less probable that you will be able to obtain such a significant cut on your debt. Moreover, there are certain loans that though not secured, have promotional interest rates that cannot be matched or reduced even more. Thus, it makes no sense to try to include them in a debt consolidation program.

To be more specific, the following loans are seldom consolidated: Home loans, home equity loans, home equity lines of credit, refinanced home loans, federal loans for first time home buyers, federal student loans, other government loans, private student loans from non-profit organizations, etc.

Secured loans can only be consolidated by means of a secured consolidation loan. In other words, you have to resort to refinancing in order to reduce the burden from home loans and home equity loans and lines of credit. When it comes to car loans, the problem is the same, an unsecured consolidation loan will never be able to match the low interest rate that car loans provide due to being secured and thus you will need to refinance the car loan if possible or consolidate via a secured consolidation loan guaranteed with another property.

Debt Consolidation

However, do not get confused; debt consolidation loans are not the only form of debt consolidation. Debt consolidation is mainly debt negotiation and sometimes, by means of a debt consolidation loan, all your debt (or most of it) can be reduced to a single loan with a unique and lower monthly payment.

Debt consolidation agencies however, first contact your creditors and agree with them a reduction on your debt by reducing the interest rate you pay and sometimes they can even obtain a cut on your debt’s capital. As stated above, by these means you can achieve a debt reduction of up to 70% but most importantly you will be able to make your debt affordable again, thus driving away the risk of defaulting or having to go through a bankruptcy process. After this negotiation deal has ended debt consolidation agencies can provide a debt consolidation loan or not. In most cases, even without a debt consolidation loan, all payments to creditors will be made through the agency.

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Perhaps you are having difficulties dealing with the collection agencies. It is important to remember first to be polite when dealing with them, doing everything that you can to make a negotiation possible. When you have done this, and they are still harassing you beyond the boundaries that are set by the Fair Debt Collection Act, or the FDCA, then it is time for you to take appropriate measures to see that they are punished in some way for their illegal actions.

There are several things that you need to do to make sure that you have a stable case. It is important that you bring to court the appropriate evidence that will help you to prove the wrong that has been done against you by the collection agencies. If you do not come up with the proper verification, you cannot have a stable enough case to sue the collection agency, whether they really were harassing you or not.

In order to prove that collection agencies are doing something that is in violation of your rights, you have to plan ahead of time. Before they even call or contact you again, you need to have a pen and paper on hand to write down who you spoke with, what day it was, and what time they called you. It is important to have details like this in order to build a strong case against the collection agency.

You must be cautious if you are recording a collection agency's phone call to make sure that you do it legally. You must tell the person you are talking to that you are recording your conversation, and why. Tell them that it is to protect your rights as stated by the FDCPA. That way, there are no legal hassles about whether or not they consented to your recording of the conversation, because if they keep talking after you've said that, you may assume that they have consented to it because you told them clearly what you were doing.

Once you have the proper evidence that will bring to the table a legitimate argument against the collection agency, you can take the action to file the complaint. You do this by contacting the attorney general's office. Most likely, you will want to do this by writing a formal letter, rather than any other form of communication.

Here are a few tips to help you write your letter:

When you are writing your letter, make sure that you do not beat around the bush. It is important to get straight to the point. When you state what the collection agency did wrong, you must back it up by stating the rights that were violated under the FDCA.

Do not just complain about them constantly calling you. It is their job. If they have not violated any of the rules stated in the FDCA, then you will have no legitimate argument, resulting in your losing the case.

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Debt Settlement in California is one of the most effective and used methods of debt reduction these days. It is also called debt negotiation and/or debt reduction. Debt settlement in California is a program that can take from 1 up to 4 years to complete. It is a very interesting process that goes from negotiation with creditors and requesting interest reductions to debt reductions up to the 45 percent of the whole debt.

Debt settlement in California is always been one of the most used solutions for those people who feel that they are not able to pay the mandatory quotas from loans or credit cards.

- How does debt settlement in California work ? -

Well, let’s look at a simple example in order to visualize the whole situation:

Let’s say that a regular customer:

- This person is $35.000 in credit card debt. He/she will have to make payments of $600 for 30 months more or less. This process includes all our fees. On the other hand, if the person stays with his/her current situation and keeps on paying the way it is meant to, his/her payments will be as follows:

- The person with the $35.000 debt will have to pay the quota the bank demands and an interest charge of 18 percent. This way the debtor will only be able to make minimum payment.

The average costumer will be able to save up to $15.000 or even more because the interest charges were reduced by the program. This is the debt settlement method in California

- How does somebody apply for this ? -

Well, although the savings may be very appealing to anybody, in order to apply for this debt settlement in California, clients will have to fall behind on payment. This how they will earn the right to apply for the program and use all the benefits it offers.

Debt Settlement in California has some consequences regarding the credit report. People will not be able to apply for loans during their time in the program, but this should not matter much because they are in the process of regaining control of their financial lives.

People should know that after they finish paying off every one of their debts, their credit score will go back as to where it was before, as long as they keep their payments current and stay out of debt.

- Do I get any advantages applying to Debt Settlement in California? -

Regardless of what state you live in, your credit may suffer as a result of using the Debt Settlement program, especially in the short-term. One advantage of Debt Settlement in California is that there are highly favorable state collection laws that do not exist in other states, which ban certain types of creditor harassment. You can relax knowing that the government protects you against collection agencies.

Remember to always take a look at different debt relief methods because there are different ways to approaching debt. It also depends on the kind of debt you have, and how you want to deal with it. There are ways of speeding up the whole debt settlement process, but it will require you use savings or take on an extra loan to pay off the other debts.

In spite of of what the problem may be, remember two things: first, always seek professional counseling before deciding what to do about your debt, and second, take bankruptcy as your last resort because it is a very serious issue and can take years to recover from it.

Debt settlement in California is solution easy on the pocket. Think about it and decide to become debt free once again.

We have different articles on interesting topics and current and former clients’ experiences with our programs. Take a look at the different situations on Debt settlement in California and debt related topics that people can fall into and how to keep yourself a debt free person.

Check these links to learn more:

http://www.debt-negotiation-settlement.com/plan.htm

http://www.debt-negotiation-settlement.com/debtConsolidation.htm

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