Debt settlement has become an extremely popular alternative to bankruptcy in recent years, and ads for debt settlement firms seem to pop up everywhere. So, if you're looking for a reliable and ethical debt settlement company to represent you regarding your overwhelming debt burden, where do you go?

The Internet is a great place to start, but you need to be very cautious and not get "sucked in" by a high pressure sales person. As a matter of fact, I would advise against even considering a company whose sales tactics are designed to pressure you. These types of firms are typically more interested in taking your money than helping you with your debt-related troubles.

Also, if you're unable to locate a company that doesn't require a monthly payment schedule, be sure that the company you're considering doesn't take its fees prior to providing a service. It may be difficult and it might take a considerable amount of time, but you can locate debt settlement firms that work on a contingency basis, and don't require up-front fees or monthly maintenance fees. It's well worth your time to find these companies; after all, if you pre-pay your fees, what incentive does the company have to negotiate the best possible settlement with your creditors?

Speaking of fees, there's a great deal of fluctuation within the debt settlement industry. Some companies charge a percentage of your overall debt (usually10%-20%), while other firms charge a percentage of the amount of money you actually save. This range can vary between 15% and 25%. It's important to be very diligent in your research so that you hire a company whose fees aren't outrageous and won't break you, but is ethical and professional in their business practices.

One of the best ways to determine if a company is ethical and professional is by checking their Better Business Bureau (BBB) record. This goes beyond looking at their "online reliability" report. Take the extra time to check their actual BBB record. Even if a company is not a member of the BBB, you'll still find a record if there have been any negative reports. I personally have checked the BBB records of many debt settlement firms, and I am astonished by the large number of complaints that have been filed. This in itself has led me to believe that the only reason many of these companies remain in business is because consumers aren't acting responsibly by checking the companies' reports prior to hiring them. Your overall financial situation is important and relevant, and there's a lot of money at stake here; take your time and only hire a company with a clean BBB record.

Finally, use your own intuition. Since you're cognizant of your situation, and researching avenues to become debt-free, I'm guessing that you're an intelligent and capable individual. Being armed with that capability and intelligence, I'm sure you'll easily determine, during your initial phone consultation, if you're dealing with a company that sincerely wants to assist you, or just wants your money.

Congratulations on taking the first step to free yourself from debt. I wish you the very best.

Popularity: unranked [?]

A debt consolidation loan could help if you are struggling to repay a number of debts. By reducing your monthly outgoings and/or simplifying your finances, debt consolidation can make a big difference to your financial situation.

However, like any debt solution, a debt consolidation loan is not right for everyone. Here we take a look at the pros and cons of debt consolidation loans, to help you decide whether it's your best way to get out of debt.

What are the advantages of a debt consolidation loan?

Reduce your outgoings

Most people who take out a debt consolidation loan are looking to reduce their monthly outgoings in order to make their debts more manageable. It's possible to do this by spreading out your debt consolidation loan repayments over a longer period than your original debts, meaning each monthly payment is smaller.

It may also be possible to reduce your overall outgoings if you are consolidating high-APR debts. So long as the interest rate on your debt consolidation loan is lower than the overall rate on your existing debts, you could save a potentially significant amount of money.

Simplify your finances

A debt consolidation loan can also allow you to 'put all your eggs in one basket' - or more specifically, combine all your debts into one.

This means you have only one payment to deal with each month, and you only need to deal with one creditor, meaning your debt is easier to monitor and less hassle to manage.

No impact on your credit rating

In itself, a debt consolidation will not affect your credit rating, like some other debt solutions can. In fact, providing you manage your monthly repayments effectively and on time, it will prove to be a positive entry on your credit history, which should improve your chances of obtaining credit in the future.

However, be aware that if you defaulted on any payments before you took out your debt consolidation loan, these entries will remain on your credit history, even if the loan pays off those particular debts.

What are the disadvantages of debt consolidation?

You could pay more in the long run

Be aware that if you reduce your monthly payments by spreading them out over a longer repayment period, you may also pay interest for longer than if you had chosen a shorter repayment term. This can often mean paying more interest overall.

Your debts could be a burden for longer

Although reduced monthly payments may sound convenient, some people just prefer to get their debts out of the way as quickly as possible.

For example, if you have three years left on your existing debt repayment terms, but spread the balance out over seven years, that means the debt will be a burden on your finances for an extra four years. That said, this can be considered a suitable compromise if you are finding your existing arrangements increasingly difficult to manage.

Consider whether you'll be able to keep up on your new repayments in the future. If you're unsure, or your circumstances are likely to change in the future, then another debt solution may be more appropriate.

Doesn't always address the causes of your debt

A debt consolidation loan may address the symptoms of your debt (i.e. unmanageable repayments), but it cannot address the reasons behind that. For example, if you have been struggling with debt due to an irregular income - you are self-employed, perhaps - then you may also find it difficult to keep up with your debt consolidation loan payments, and there may be other more effective solutions to your problem.

A debt consolidation loan also requires some willpower. It's easy to fall into the trap of spending the money you have repaid - on a credit card balance, for example - and this can lead to more debt, since you will still have to repay your debt consolidation loan.

Popularity: unranked [?]

Accumulating debt is a part of starting and running a venture. Every enterprise has some debt to suppliers, and many owe mortgages for their office or retail space. Maintaining a certain level of business debt can even be healthy for your credit rating, when good-sized payments are regularly made.

But what happens when these payments become fewer and farther in between because the business is no longer generating enough income? Do you, as an entrepreneur consider filing a Chapter 11 business bankruptcy? Isn’t there a better, less drastic solution that will do less harm to your credit rating and business reputation?

Fortunately there is. With business debt settlement, a negotiated settlement can be made with all of your creditors to reduce the amount of unsecured financial obligations. This form of financial relief is aimed only at unsecured loans and will not be applicable to loans on secured property, such as cars, mortgages, or equipment. However, all other form of debt can be negotiated such as credit card, business or commercial loans, loan defaults and charge offs, and pre and post court judgment settlements.

Business debt settlement can provide relief in as few as a couple of days, or as long as it takes to form an agreement with each and every creditor, so the more organized your data is, with the contact information and the correct balance owed, the sooner the resolution will come about. You can negotiate directly with your creditors, but a skilled consultant with a well-known track record will probably get the best results. It would be unwise to try to negotiate directly with your creditors without at least getting advice regarding your individual situation with speaking with a counselor, who is trained in the process and also has a history with and knows most of the creditors that you will be dealing with.

Business debt settlement can be very effective and reduce more than the interest rate at which the accumulated debt is paid; this process can actually reduce the principle of the balance as well. However, in this case there is important tax information that you should know about. When a settlement is reached with the creditor for less than the original balance, if the difference between the settlement and the original balance is more than $600.00, the creditor will file a 1099c form that represents this amount as income to you. Your creditors may accept lesser payments but the IRS will expect to tax this income. Also, the IRS does not allow dept to any taxing authority to be discharged in bankruptcy. A good business debt settlement counselor will be able to advise you on how to deal with this tricky situation.

Finding a good consultant can be a challenge. Sure there are plenty listed in the Yellow Pages and on the Internet, but how do you know how good they are. Try to get a recommendation from a colleague, the Chamber of Commerce, or even your Credit Card Company or other creditor. These companies and banks deal with credit counselors daily and they know which ones have been reliable and efficient in past business debt settlement dealings.

However, you should get advice and the protection that a business debt settlement can give you and your business quickly. If you delay, creditors can sue you and the court fees will be added on to the debt. Also, after you retain a counseling service, your creditors may continue to call or contact you, but they are less likely to do so since the name of the counselor will be entered as the primary contact source regarding the debt.

Check these links to learn more:

http://www.commercialdebtcounseling.com

http://www.commercialdebtcounseling.com/business/business-y/business-index.shtml

James Banks is a contributing writer to http://www.commercialdebtcounseling.com and is currently writing some special articles to guidebusiness owners on how to manage debt and avoid bankruptcy. For FreeInformation on Business Debt and Debt Help Consultation, call toll-free1-877-324-1218.

Popularity: 3% [?]

There are many people that are finding themselves in debt, especially in light of the recent mortgage fiasco. Using a debt settlement service is one viable option for eliminating your financial difficulties and getting your stability back. There are times that using a credit settlement service will be your best option.

If you are current on your payments and are able to make minimum payments, there are other solutions that may work better for your financial situation. However, if your debt is substantial, you may still opt to use a debt negotiation company.

If you are looking for a bankruptcy alternative, a credit settlement service is ideal. They can help you get charged off and severely past due accounts paid off.

Debt negotiation is one of the fastest ways of getting out of debt. You can pay off your accounts in as little as a year and not more than three years.

Debt settlement is not a loan or a consolidation. Your credit negotiation company works with your creditors to get your balances reduced. This reduction is usually 40-70% of the balance on your account. In other words, if you have a $10,000 in credit card balances, it may be possible to have that amount reduced to $3,000. I have even seen creditors willing to settle for less.

Think about the relief you would experience if you only owed $3,000 as opposed to the original $10,000. Using a debt settlement service will have a negative affect on your credit report, but it will not have the impact that filing bankruptcy will have on it.

Once you have entered into an agreement with a negotiation company, it is essential that you stick to the agreement. Your company may drop you if you fail to follow the terms of the agreement that you have entered into with them. You will make your payments to the debt settlement company and they will take care of paying your creditors.

If you are in a situation where you are falling behind on your payments and are considering bankruptcy, you are in the ideal position to use a debt settlement company. This company can be your way out of debt. The sooner you settle your debts, the sooner you will be able to begin rebuilding your credit and getting your life back on track. If you are getting ready to file bankruptcy, consider a debt settlement service for paying your debts.

Popularity: unranked [?]

Debt settlement and consumer credit counseling are services with the same goal but apply to different circumstances and goals. Once fully aware of one's circumstances the choice between the two becomes obvious.

Consumer Credit Counseling (CCC) is primarily for those seeking financial convenience. CCC reduces interest rates on credit cards whose payments are relatively current. With this service the entire outstanding debt is repaid in full. The terms of CCC are set up by the creditors themselves. Under CCC clients typically pay the same amount they are paying now each month. With CCC monthly savings are not that significant and so people with real hardship cannot typically afford to access the advantages of this program. The most significant benefit of CCC is to reduce the total time required to payoff one's debts. Consumer credit counseling is thus simply a convenient service for becoming debt free more rapidly. This convenience is only accessible to those who have debts that qualify and can afford to pay right around what they are paying now each month.

Debt settlement is a solution for those with significant hardship who do not wish to or don't qualify for filing bankruptcy. This service reduces the total principal to be paid through settling debts "in full". Debt settlement is structured by a third party company rather and takes into account the client's ability to pay and not just the desires of the creditors. Debt settlement creditors are willing to accept a negotiated payoff rather than receive zero should the client file bankruptcy. Debt settlement benefits the client by both alleviating their monthly overhead (and therefore alleviating their hardship) and by also dramatically reducing the total time required to get out of debt. Debt Settlement is best described as an alternative relief to significant hardship caused by debt. This option should be considered for those who have significant hardship and want an alternative to bankruptcy.

Debt settlement and consumer credit counseling have similar goals yet are greatly different in who they serve. Consumer Credit Counseling is an option for those whose situation is such that they afford to have options. CCC prospects do not typcially actually have to choose to do anything at all. Often those who are good consumer, credit counseling can often just as easily choose other options including paying their debts as they are at present. Debt settlement is for those who have few other choices and are considering bankruptcy or just "letting go" and not paying any more creditors to survive. Restricted by significant financial hardship, other options simply don't suit debt settlement candidates very well. These services therefore serve different people. Individuals are typically only able to benefit from one of these programs and getting into the wrong program can make a person;s situation even worse.

Popularity: unranked [?]