What are My Options?
When face with a financial hardship there are several options open to an individual the main aspect is to determine the wisest method of getting rid of your debt.
When you are being overwhelmed by credit card debt you have the following options available to you:
1. Do nothing and hope things get better
2. Debt consolidation
3. Enroll in credit counseling or debt management
4. File Bankruptcy
5. Enroll in a debt settlement program
Option One: Do Nothing
When you get into credit card debt unless you pay your balances in full each month you are already getting yourself behind the eight ball. By the time you get to the point where you are barely able to make your minimums each month you already know you are in trouble. At this point in time many people start to borrow from Peter to pay Paul. In other words, borrowing from one card to pay off the balance of another card. The next step from here is not being able to meet your obligations and those low interest rate cards that seemed so attractive at first will begin to sport interest rates well over 20%. Banks also have the ability (universal default) to begin raising your interest rates at their discretion.
Unfortunately most people choose to do nothing by the time they get into this situation. Procrastination can be a very expensive habit when it comes to handling your creditors. Hoping the problem will go away is not a real option. Late fees and increased finance charges will continue to mount and become an overwhelming situation both financially and emotionally. Eventually your debts must be handled. Your creditors are not in the business of being sympatric to your cause. Their job is to make money for the people on Wall Street.
Option Two: Debt Consolidation Loans
Debt consolidation is the route most people think of when it comes to solving their financial woes. Why not take all of your debt and wrap it up into one monthly payment at a lower interest rate typically 11-12% on average. It all sounds well and good but being able to borrow the money in this type of environment can be quite difficult. With most consolidation loans being backed by people’s homes and with the recent melt-down in the mortgage markets this can be next to impossible. You can’t borrow your way out of debt.
Option Three: Credit Counseling or debt management programs
Credit counseling and debt management programs are basically one and the same. As the debtor you will make one monthly payment to a counseling agency and they will distribute the funds to your creditors on your behalf at a lower interest rate. Credit counseling agencies have come under an incredible amount of scrutiny as of late due to the way they derive their income. They depend on the creditors for the bulk of their income in the form of kick backs from the creditors. Seventy-Five percent (75%) of people that start credit card counseling programs drop out.
Option Four: Bankruptcy
When you finally come to the end of the road and there is no other way to solve you situation bankruptcy may seem like the only option. Once you have declared bankruptcy all creditors will cease in their collection efforts. Many people in this country file bankruptcy for this reason not realizing there are other ways and means to get the creditors off your back.
There are two types of bankruptcy available to you the consumer. Chapter 7 involves the full discharge of your debts while, Chapter 13 being the other option where as the debtor you will pay back a percentage of your debt over a 3-5 year period. Both options typically would not be considered when the debtor has equity in his/her home.
Most creditors would prefer to work out a deal with the debtor then have them file bankruptcy. Their philosophy is “A bird in hand is worth more then two in the bush.”
Option Five: Debt Settlement
Debt negotiation or debt settlement as it is now called is an honest and effective alternative to the above mentioned programs. Debt Settlement programs are the most aggressive way to handle your debts. Debt settlement companies work for the consumer. Debt Settlement programs are the only programs where you are not paying back 100% of the principle plus interest and late fees. People ask what happens to the rest of the money that they owe and the truth is the balance is actually forgiven by the creditor in a transaction called a settlement. This process allows you to handle your debts in a much shorter time frame then any other program due to the negotiated principle you are paying.
The major advantages of enrolling in a Debt Settlement a program are:
1. Honest and Honorable option to bankruptcy
2. No public record of ever enrolling in a debt settlement program
3. You choose how long you want the program to run
4. Allows for flexibility if a monthly payment is missed.
The disadvantages of enrolling in a debt settlement program are:
1. Debt Settlement companies can’t guarantee that they can settle all of your debts or exactly how much the settlements will be
2. You may still be sued by your creditors
3. Debt Settlement companies can’t guarantee that the creditor calls will stop
4. You may have to pay taxes on the amount forgiven by a creditor
5. Please look at the FAQ section of our web site.
The Hudson Group Plan
• Rather than quote you the lowest possible monthly payment in order to be more appealing, we do the opposite.
• Hudson Group negotiation fee is a percentage of the total debt enrolled in the program and varies based on the debt amount.
• We offer an aggressive and highly effective option for people who have found themselves in a financial hardship are seeking options to settle their debts. This process is best suited for results oriented people willing to make a commitment to complete the program. Our Sr. Debt Analysts will help determine if debt settlement is a viable option for you. After reviewing your financial profile, analyzing the totals, types of debts and creditors involved, we will formulate a savings time-line and settlement plan based specifically on your situation.
• Our licensed professional arbitrators will negotiate on your behalf to get the best settlement possible. Settlements are made with money accumulated in a dedicated (FDIC Insured), savings account you control over the course of your program. No settlement is ever finalized without your approval.
• Our main goal is to get your out of debt. We don't work for the credit card companies, we work for you.
• Becoming free from credit card debt is the first step to becoming financially secure, and debt settlement may be your best option. Our debt settlement program is actually quite simple.
• How it works:
We will set you up with an affordable monthly savings plan. Based on what you are able to set aside and save each month in your trust account, we can determine how many months you will be a part of the program, and ultimately determine when you will be free from credit card debt.
• Reaching a settlement can be a very lengthy process, and usually takes several phone call and communications between Solve Debts and the creditor. Once a settlement offer has been reached, and you as the client have agreed on this amount, we will obtain that settlement offer in writing from the creditor. We will then authorize a check to be distributed from your trust account and overnight this to the creditor.
ACCEPTABLE DEBTS
• Discover Card and Citifinancial personal loans - But sometimes needs a signed disclaimer which we will get from the client. We will send it in our welcome packet. They are both very tough and litigious. Depending on balance, delinquency status and client savings, these debts may not be settable. If the sales rep comes across this, he/she should mention to the prospective client that these are tough creditors and results certainly do vary. We’ll then go over this with the client during the welcome call. We will tell the client that if we cannot settle the debt (perhaps the debt goes legal) we’ll instead set up terms on the full balance to call off the dogs. The debt can then be removed from the program.
• All major Credit Cards and Charge Cards
• Department Store cards including furniture stores, appliances ie Lowes, Home Depot but only if there were not recent big ticket purchases. Example: if the client tells us that they just used their Lowes card to purchase a $6000 home heating unit last month and now they want to enroll the debt into the program, that’s borderline fraud. We’ll tell them to make at least a few payments to that debt if able. Also, some local furniture stores will repo the items if they were recently purchased.
• Unsecured Personal Loans
• Bank Loans from Prior Bank
• Installment Loans
• Finance Companies
• Gas Cards
• Repossession Deficiency Balances
• Cell phones
• Back utilities if client is no longer using the company
• Credit Unions whose members are not Federal or Military employees
• Abandoned Time Shares
• Jewelry Store cards
• Judgments
• Back rent (if not current residence)
• Litigation accounts
UNACCEPTABLE DEBTS and STATES
• State exclusions ID, SC, NC, HI, VA, GA, KS, ME, WI, MS, WY, NJ, CO, RI, DE, WV, UT, CT
• Car, Truck, Van or Motorcycle loans
• Jet ski, boat, ATV or other vehicle loans
• Student Loans
• Cash Call Loans or Pay Day loans unless with an agency (will need proof)
• Personal Loan from Current Bank
• Any loan with house or land as collateral
• Child Support
• Back Taxes
• Speeding tickets and/or Fines
• Current Cell Phones
• Back rent (current residence)
• Current litigation accounts. If a debt is currently with a law office, we have to look at a few things before agreeing to accept it. Is that law office licensed to practice in the client’s state? If so, they can sue and we cannot take the debt unless the client has immediate funds available for us to use to negotiate with. If the law office is not in their state, they are likely just acting as third party collections therefore we can take the debt. Feel free to run the scenarios by Eagle One for approval. Always ask the client if they have any debts that are currently with law offices.
• Bank fees due to overdrafts, NSF checks and associated fees.
• NEWLY taken/ high cash advances or Balance Transfers– unless 3 or more payments have been made (case by case depending on amount and timing of the advance)
• AAFES, STAR or USAA cards (military)
• Car Repair bills
• Rent-a-Center bills
• Warranty Contracts
• Insurance Policies
• Check Cashing Establishments
• Attorney Fees
• We prefer but not necessary: Unmarried people on the same program if they are both legally responsible for at least one of the included debts. If not legally responsible for the other’s debts, they must be on separate
programs.
• Do not combine small medical bills.
• Single debt accounts (has just one debt. if already in collections, we may consider it on case by case basis)
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