Available Credit is Important to Credit Score

Imagine a bath tub that is empty. It is 0% full. Gradually, you fill it with water. When it is about to overflow onto the bathroom floor, it is 100% full.

Your credit rating is the same way. When you start out, you have “No” credit rating. A financial institution needs to trust in your ability, character and willingness to repay your credit card, car or home before you even appear on the financial radar screen.

Revolving Versus Installment Credit

Credit cards offer “revolving credit,” which gives you an upper credit limit, i.e. $5,000. You can use any amount up to the credit limit. This is called revolving credit because you are allowed to maintain an outstanding balance. This revolving door only closes when you repay the entire balance or fail to repay the debt.

The upper credit card limit determines your “credit available.” Some view it as a rainy day slush fund. Bankers view it as a sign of your financial condition.

Credit Companies Weigh Your Debt Load

Credit scores are based on a number of financial criteria, including the amount of credit available to you in revolving and installment loans. The revolving account loans are weighed more heavily because it shows how you manage credit. The debt to credit ratio is the percentage of the total credit you have used up.

Installment loans include student, car and home loans based on fixed amounts of money. Your debt to credit ratio is always 100% or 1:1 for these types of loans because you always use the maximum amount available for your expenses.

Credit cards are different because the balance is always changing. Let’s say you have a credit limit of $10,000 on one card and $4,000 on another card. You run up a debt balance of $6,000 on the first card and $1,000 on the second card. Your debt to credit ratio in this scenario would be 50% or 1:2. You have used up half of the credit available to you.

Kick the Can Down the Road

Imagine that you had a goose that laid a golden egg every day. With the high prices of gold, you could easily live off the income generated from this productive goose. You would want to keep the goose well-fed and make sure it could continue to produce.

Now, what would happen if you got greedy and demanded more production than the goose could handle? What if you increased the percentage of eggs you expected to be produced by 29.99% every month? Eventually, the goose might get stressed out and fail to reach your productivity goals. It might even produce less due to being too stressed out with your demands.

The Debtor Pays the Banker’s Bills

Bankers view the debtor as the goose that laid the golden egg. Instead of being satisfied with a standard rate of production, banks demand increased production called “compound interest.” Eventually, the productivity demands are too much and people can’t pay.

Debtors pay the banker’s bills. A wise banker wants debtors to have manageable debt levels.

Maxed Out Credit

Capitalism requires a surplus to function properly. This surplus can be re-invested into new businesses, which produce goods and services. Without a surplus, the system fails.

Bankers try to determine whether you can “handle your debt payments responsibly.” When you have maxed out your credit cards, it is a “red flag” to bankers. It makes you look irresponsible, financially stressed or in trouble. Bankers may reject a new loan request or charge higher interest rates if you have a high unmanageable debt load. Experts recommend usage of only one-third of available credit.

New Loans Not Available

Once you have passed the point of no return, no banker will give you a new loan. You need to work with debt negotiation professionals to establish a manageable payment level. The goose that lays the golden egg must be allowed to produce a reasonable amount. Debt relief re-balances economic well-being so that you can handle your payments and have peace of mind.

Get your bills settled with NationalRelief.com. You will be more healthy physically and financially. Debt relief is the credible answer to your debt problems. Talk to a debt professional today.

Fair Debt Collection Practices Act

The Fair Debt Collection Practices Act (FDCPA) creates a number of very important guidelines to protect the consumer against debt collectors. Many people don’t understand all of the financial laws, so they can be taken advantage of by overly aggressive debt collectors. Debt collection laws prohibit the most frequent forms of oppression: annoying calls, work harassment and deception.

The purpose of these laws is to create uniform standards to “eliminate abusive debt collection practices.” There are very strict guidelines on how a debt collector can proceed with consumers, like you.

Clear Identification By Collectors

No one wants someone calling them who remains silent at the other end or doesn’t properly identify themselves. That would be creepy. Debt collectors must identify who they are and who they work for. They must provide the name and address of your original creditor within five days of the first communication through written correspondence.

Debt collectors must clearly state why they are calling. They can only call between 8 a.m. and 9 p.m. of your local standard time. They cannot harass you with repeated calls.

Gramm-Leach-Bliley Act

The Internal Revenue Code of 1986, Title V of the Gramm-Leach-Bliley Act reformed financial law. It set up strict rules to safeguard consumer rights. It required financial institutions to send you privacy notices. It demanded compliance with all written correspondence for debt collection. It protects you from the reckless behavior of debt collectors.

Fair Credit Reporting Act

The Fair Credit Reporting Act (FCRA) gives you rights concerning your credit rating. Previously, credit scores were a “behind-the-scenes” rating shared by bankers. With FCRA, you have the right to a free annual credit report.

You have the right to an accurate credit report. There are procedures for correcting errors in your credit report. Negative entries, like bankruptcies, tax liens and judgments, can only be retained for a certain period of time. The FCRA protects your civil liberties with respect to your credit rating.

Your Personal Information is Protected

Your personal non-public financial information cannot be shared with just anyone. Some of your banking notices might explain who the banks share the information with. It gives you the opportunity to “opt-in” or “opt-out” of their sharing systems.

Debt collection law protects you against unfair practices. Debt collectors cannot tell other people that you owe debt. They cannot embarrass you by publicly displaying your name as a “Bad Debtor.”

You cannot be harassed, oppressed, abused or threatened with arrest or criminal prosecution. A debt collector cannot misrepresent who he is, how much the debt is or what your legal debt status is. No deceptive or false representation is permitted. False information cannot be sent to the credit bureaus.

Communication is Controlled

Debt collection laws govern abusive debt collection practices. Debt collectors cannot try to communicate with you at your place of employment. No obscene or profane language is allowed.

You have rights against debt collectors. Once you know your rights, you can stand up against any abuse. You can request that debt collectors stop communicating with you. You can dispute debt and demand verification of your debt.

Stop harassment by standing up for your rights. If the debt collectors continue to abuse you, you can recover damages in a court of law.

You Have Many Consumer Rights

You have many consumer rights under these debt collection laws, but you still must resolve your debt problem. Eventually, creditors might bring you to court. This will be an expensive process for all parties involved. It works out the best for both you and your creditor if you consolidate your debt. This will create real debt relief while enabling the creditor to continue to receive payments.

Don’t wait too long. Debt negotiation is the best way to get real debt relief. Time won’t fix your debt woes. Contact a debt consultant today and learn more about your consumer rights against debt collection. Repair your debt problem immediately with the experts who can guide you through the debt negotiation process.

Who Is Required To Honor Your Request

Debt collection agencies must stop contacting you after receipt of this letter. However, your original creditor may not stop trying to pursue a past due debt. Most creditors will typically avoid contacting you out of fear of a complaint being made with debt regulators.

Any lawyer who handles more than two debts a year must also honor your request to cease communications. Keep in mind that this does not mean a creditor cannot collect the money you owe. All this means is that the creditor cannot legally contact you from this point forward.

Sending a cease and desist letter to your creditors will work if you are looking to avoid harassing communications. Keep in mind that there will be other negative consequences if you do decide to send this letter.

What Are The Consequences Of Sending Such A Letter

Most creditors will send your account straight to court when receiving such a message. What you are basically telling creditors is that the time for talking is over. No further negotiations will take place regarding your debt.

An inability to contact you will make it hard for the creditor to collect the debt owed. Therefore, the easiest thing for your creditor to do is file a lawsuit against you. This is probably not the outcome you were looking for.

Telling your creditors not to contact you will give you the peace and quiet you desire. However, it will also create a situation where you have essentially blown off your creditors. You should understand they have all the leverage in this situation. You should consider a debt settlement as opposed to hoping the situation will go away.

You could have a lien placed on your home, your wages garnished and your credit score ruined if you have to go to court. It should be noted that your credit score will suffer due to failure to make timely payments. Simply sending a cease and desist letter will not lower your credit score.

Are There Other Ways To Ignore Creditors?

Your first step should be to find ways to ignore your creditors. A good idea would be to give them a phone number that is not your main number. For example, you may use your cell phone as your main contact number. Giving your creditors your home number allows you to avoid their calls.

Another option may be to let an answering machine pick up your calls. Creditors must identify themselves if they are leaving a message. Usually, they are only allowed to say who the message is who the message is for as well as a contact number for a response.

Transfer power of attorney to someone else. A lawyer, credit counselor or friend may be willing to take the phone calls for you. This allows you to work on lowering your debt without dealing with harassing phone calls.

Avoiding your creditors is not going to help you get out of debt any faster. All it will do is make your debt situation worse. The best thing to do is negotiate a settlement of your current debt. It will be a winning proposition for both sides. Telling your creditors to stop contacting you with a ceases and desist letter will just get you sued. Chances are not very good of you winning the case. Call us today to see how a debt relief plan can help you end those harassing creditor calls. Get more information about how debt relief can improve your life.

Credit Management Begins With A Comprehensive Financial Analysis

A lack of organization can be one of the reasons why people get into financial problems. People take on so many credit cards that they lose the ability to keep track of the bills and maintain an efficient payment schedule.

A good credit management professional will help you to wade through the pile of credit card bills and create a comprehensive payment schedule. It is the first important step to getting your finances under control.

Check Your Spending Habits

People with bad credit or financial issues tend to develop bad spending habits. They will utilize their credit cards to the point where they spend all of their extra money on minimum payments. In order to buy things like food and gas, they have to use their revolving line of high interest credit.

A credit management professional will help you to develop a personal budget that will allow you to track your expenses and develop good spending habits. You will be able to see where all of your money is being spent and make the changes that will stop you from going deeper into debt.

Debt Settlement

As you and your financial expert are analyzing your debt, you will notice that you have debt that can be settled and reduced. A debt settlement program can reduce your unsecured debt by up to 50 percent and give you hundreds of dollars in extra money each month.

A debt settlement program will give you a low monthly payment that pays off your debt in 24 to 48 months. It not only helps you manage your debt, but it helps you to eliminate it as well.

Good Credit Management Tips

As part of a comprehensive credit management program, a credit counselor will also give you good advice. If you follow the advice of your credit manager, then you can start to rebuild your credit profile immediately.

Making Payments On Time

One of the most important parts of a credit management plan is to make all of your account payments on time. Paying your debt on time and making at least your monthly minimum payments each month, will lower your debt and raise your credit score.

Follow Your Plan

When you get into a credit management program, you will be given specific instructions on how much to pay and how to make your payments. Many people run into trouble with their debt relief plans because they fail to read the instructions.

Never take anything for granted when it comes to paying your debt off. Do not assume that you know what the process is. Always take the time to read your plan instructions and make the appropriate payments.

Rebuilding Your Credit

When you are on a debt settlement plan as part of your management program, you will find that your credit score rebounds quickly. You should take advantage of this opportunity to rebuild your credit as quickly as possible.

One of the best ways to rebuild your credit is to become responsible about how you use your accounts. Never carry a balance that is more than 20 percent of the total credit limit and avoid taking on too many new accounts.

Check In With Your Counselor

Some debt management plans require you to check in with your credit counselor on a regular basis. Whether it is required by your debt program or not, you should check in with your credit expert at least once a month to get good advice and go over your budget program.

When you make regular visits to your debt professional, he will be able to go over your progress with you and make sure that you stay on track.

We offer complete credit management programs that will help you to address your financial obligations and get your debt under control. We can give you a personalized and comprehensive financial analysis of your situation and put together a plan that fits your situation.

If you have questions about debt relief, then we have answers. Let us put our years of experience to work for you and put you on the path towards financial freedom.

Call us today and let our debt professionals get you started on your own plan that will help you eliminate debt in no time at all.

Debt Consolidation Challenges

One popular option is a debt consolidation loan. But a loan is just another form of financing that moves your debt from one account to another. It does not address the underlying issue of reducing and eliminating the credit card obligations.

Debt consolidation loans require a good credit score to get an interest rate that will help the situation. Many people that are looking for debt relief have had challenges with making credit card payments and that has lowered their credit score. As convenient as a consolidation loan sounds, it is not the ideal solution.

Using Debt Settlement

Another popular debt relief option is debt settlement. This is the process of reducing your debt by negotiating a lower payoff balance with your creditors. Consumers should contract with a professional debt negotiation organization to start an effective negotiation program.

A debt negotiation organization will work with your creditors to reduce your balances, and avoid bankruptcy. It is a process that addresses your debt issues directly and develops a realistic plan to pay off your obligations at one of the lowest costs possible.

Debt Settlement Can Fit Your Budget

You and your debt negotiator start the process by examining your personal budget. In order to help you, the financial professional needs to know what payments you can afford. After a comprehensive analysis of your finances, the debt relief expert knows what plan to develop that will fit your budget.

It can be frustrating when credit card debt starts to rise out of control. The first thing a debt negotiation firm does is stop the debt collectors from harassing you. These experienced professionals know how to talk to your creditors to make sure that the debt does not get out of hand.

The Benefits Of Debt Settlement

No Credit Score Requirements

When you go through a professional debt settlement program, you do not need to have good credit. These financial experts understand the challenges of a falling credit score. Their goal is to help you rebuild your credit rating by stopping the damage that your current credit accounts are causing.

No Loans Required

There are no loans required with debt negotiation. The plan you are presented with is one that was negotiated with your creditors by your financial expert. Rather than moving your debt around from one creditor to another, your debt relief professional is helping you to attack the debt directly and eliminate it completely.

No Experience Required

Applying for a debt consolidation loan can get complicated and frustrating. The debt settlement process is much easier and does not require you to know anything about lengthy loan contracts. The debt settlement professional will explain the entire process to you and let you know what your monthly payment will be.

No Accounting Required

When you are applying for a debt consolidation loan, you need to make sure that the loan interest rate is low enough to make the program worth your while. With debt settlement, you will not need to do any complicated accounting procedures. Your negotiation program is based on the decreased balances of your existing accounts. The settlement process produces the results you are looking for without having to calculate the effects of a new loan.

Debt Settlement May Be The Right Choice For You

We are experts in the field of debt negotiation and settlement. We will work with you to develop a comprehensive outline of your financial situation, and then negotiate a settlement with your creditors that fits your budget. We encourage you to call us immediately, and let us show you the many different ways that debt settlement will help you to get your credit card debt under control.

Lower Your Interest Rate

Creditors charge an interest rate to protect against the risk they are taking by extending you a loan. Borrowers who show a lower risk will generally get a lower interest rate. However, there are a couple ways you can have your current rate lowered significantly.

The first way to lower your interest rate is to ask your credit card company for a reduction. Yes, a lower interest rate can be as easy as a phone call. They will generally reduce your rate in order to keep your business. Even borrowers with bad credit can have their rates reduced from 30 percent to as low as 15 percent.

Another way to lower your interest rate is to consider signing up with a credit union. Most credit unions will offer rates that are below the national average. Transferring your current balance to a credit union can save you 5, 10 or even 15 percent off your current interest rate. The best news is that you can still get a card from a company such as Visa or MasterCard.

Lower Your Balance

The next step after lowering your interest rate is to lower your credit balance. Going after a debt settlement program is the fastest way to have your balance lowered.

Debt settlement is great for those who are having a financial hardship. Losing a job can reduce your monthly income by quite a bit. However, you can use this to your advantage when negotiating with your creditors. Take whatever savings you have in the bank to pay off your debt for less than what you owe. It is possible to see your credit card debt reduced by as much as 50 percent.

Your Credit Payment Will Be Lower Each Month

You can choose a flexible payment plan with the debt settlement program offered by National Relief. Let’s say you owe $20,000 in credit card debt. Your old interest rate was 25 percent based on a credit score of 650. Your monthly payment would be roughly $1,000+ each month based on a 5% minimum payment required.

When you choose to reduce your credit card debt with settlement, you need to save up approximately half of your balance to make a good settlement offer. So you could make payments of $500 a month into your settlement fund, realizing a savings of $500 a month.

Keep in mind that the more money you can save and the faster you can save it, the faster you can get out of debt.

You will also see your credit score go up as well once you have settled your debts and start making all your payments on time again. A credit score that started off at 650 could easily go up to 700 or more as debt is being paid on time. This will allow you to borrow at a better interest rate in the future.

Pursuing a reduction in your credit card debt is something you should seriously consider. You can save yourself hundreds of dollars each month in reduced interest and principal payments. Reducing your debt will eventually make it possible to completely eliminate your debt. Imagine living a life where you decide where your money goes instead of your creditors. Give National Relief a call to see how much you can save on your credit card debt. Speak to a qualified professional who can show you how much you can save on your current credit card debt.

What is Debt Settlement?

First, it is important to understand exactly what debt settlement is and what it can accomplish. Debt settlement is accomplished through skilled negotiations with your credit card companies and other qualified creditors. Debt settlement often reduces your debt, but it rarely eliminates it entirely. Instead, legitimate debt relief settlement agreements may include eliminating or reducing your interest rate, eliminating or reducing your principal balance, eliminating or reducing accumulated fees for a lump sum payment agreement.

Debt settlement is often recommended as only one method of resolving financial problems. Good credit counseling services will also frequently recommend financial management services and debt consolidation services. Although many debt relief organizations recommend debt consolidation loans, we avoid suggesting that as a solution since it places you further into debt.

Cons of Debt Settlement Companies

Unfortunately, the downturn in the economy has lead to the opportunity for many unqualified individual companies to start debt relief companies that actually do not help consumers. Sadly, out of desperation and a true need to find solutions to their credit problems, these predatory companies prey on the financial difficulties of consumers who are at their most vulnerable.

In the past, consumers who worked with disreputable organizations would find themselves charged high up-front fees that rarely resulted in improvements to their debt situation. Instead, they found themselves further in debt and with even more damage to their credit. As a result, the debt relief industry has earned a questionable reputation until recent legal regulations have forced changes in how fees are charged and how debt relief companies operate.

This problem can be countered, however, by utilizing a legitimate and credentialed debt settlement company. We belong to the American Fair Credit Council, the International Association of Professional Debt Arbitrators and the US Chamber of Commerce. As a result, we maintain to professional, ethical and legal standards of conduct. We do not charge up-front fees and you do not pay a fee until we can show results from our efforts on your behalf.

Debt settlement may also initially negatively affect your credit score. However, if you are already making late payments or missing them entirely, your credit is probably already suffering. By working with a legitimate debt relief organization, your credit score should improve quickly once a settlement agreement is negotiated and reached. With that in place, you can then begin the process embarking on rebuilding your credit.

Pros of Debt Settlement Companies

The most simple benefit of working with a debt settlement company is that you will be able to find relief from your unsecured debts. Debt negotiation and settlement is available for both unsecured personal and business credit accounts. It includes:

• Credit Cards
• Medical Bills
• Collection Accounts
• Personal Loans
• Payday or Cash Advance Loans
• Lines of Credit
• Business Debts
• Repossession Debts

Legitimate debt settlement organizations can save you time and effort by working on your behalf. While many consumers believe they can negotiate debt settlements on their own, they frequently discover that it is a frustrating process that produces few results. Many creditors are reluctant to negotiate directly with consumers and only offer hardship programs that last a few months and do not result in reducing your debt amounts.

On average, qualified credit relief counselors, on the other hand, are able to skillfully negotiate with creditors. They are often able to save you as much as half of your debt amount. Debt settlements negotiated by qualified and trained debt relief counselors usually take the form of a combination of lowered interest rates, eliminated or decreased accumulated fees, reduced principal amounts and lump sum payments.

Debt settlement organizations also usually make recommendations for several different debt relief programs to help you get out of your financial difficulties. Once they have negotiated an agreeable settlement, our counselors usually recommend participation in our debt relief program. This program allows you to make monthly payments into an account that is dedicated to your credit settlement payment plan.

If you are struggling to make monthly payments on your unsecured debts, you may benefit from talking to one of our qualified credit card relief counselors. Allow us to help you back on the road to financial recovery by contacting us or filling out the form for a free debt analysis, and we are sure you will be pleasantly surprised with your decision.

Unsecured versus Secured Loans

Secured loans are protected by physical assets – equipment, vehicles and property – as collateral. These are traditional banking loans with lower interest rates reflecting the real value of your company. The collateral can be appropriated by financial companies if you default.

Unsecured debt is protected by your “promise to pay.” It is a good faith promise. It is actually like fiat currency, which has no real gold or silver backing it. You trust that your paper dollars will still have value when you use them. By themselves, they are just paper.

Your credit cards are unsecured debt. They are plastic cards holding intangible debt. These unsecured business loans have no physical assets backing them up. Unsecured debt has higher interest rate charges because there is no collateral backing it.

Struggling With Minimum Payments?

Politicians can survive on pithy “Everything is great” propaganda. You live in the real world where you need real solutions for real problems. You can’t just “ignore” a problem or have your friends in the media “turn a frown upside-down.” You don’t get bailed out. You must make the bottom line reflect real success.

“Out of sight, Out of mind”

It is very easy for large corporations to build up large debts. Employees will casually charge their credit card for a vast array of expenses. The money is intangible. The payment is delayed into the theoretical future. Some believe that tomorrow will never arrive.

It is very easy to get in trouble with unsecured business loans. The interest rates continually increase. You might have had some short-term problems. Some customers might have gone bankrupt. You are trying to keep your head above water. You see input prices increasing and know that the high interest rates on your unsecured business loans is unsustainable.

Chrysler’s Multiple Business Failures

Chrysler has struggled financially for decades. As a large corporation, they were able to get a massive political bailout. Yet, have their products improved? After the bailouts, is the market position superior? Probably not.

“There is no free lunch”

Small businesses account for 99.7 percent of the employment firms. Most jobs are created by the small entrepreneur. Unfortunately, the political system ignores the contributions of the most vital business sector. The big companies get all the attention.

Banks Cleaning Up Their Books

Banking functions according to the laws of money supply and demand. In the 1980s, the Savings & Loan crisis led to the punishment of criminal bankers. In the 1990s, the economy had recovered enough so that financial institutions had large amounts of cash to lend. They lowered their standards and lent to anyone with a pulse.

By 2008, the reality started to sink in as the real estate bubble burst. Houses that had appreciated 200 percent lost 50 percent of their value. Some banks collapsed. Unlike previous crises, no one substantial was punished in 2008. Instead, the banking con artists were rewarded with “golden parachutes.” The toxic assets were passed onto the next bank. Now, the banks are cleaning up their books.

Money is Scarce

Everyone is in debt. Money is scarce. Lucrative unsecured loan agreements are a dinosaur of the past. Banks are cleaning up their books.

Banks are so debt-strapped, they aren’t loaning money. Consumers are so debt-strapped, they aren’t spending. Businesses are so debt-strapped, they aren’t creating jobs. See the trend developing?

Don’t Throw Good Money After Bad Money

Somehow, you must end the unsustainable cycle of debt. New loans don’t fix problems with paying old loans. Financial experts and professional poker players know when to cut their losses. When they have made a mistake, they only make it worse by continuing to try to make it work. A business leader makes the important decisions to save the ship by adjusting the debt repayment amount.

Trust in real debt relief to renew your business bottom line. No one benefits by a complete business collapse due to high levels of debt.

Real Business Debt Relief

Financial success requires hard work and dedication. Problem-solving skills are essential for weathering the storms that sink other financial ships.

Lead your company by contacting the debt relief specialists at National Debt Relief Group. Fill out the form and get your free consultation. It is an easy process that can save your business from unsecured debt that is spiraling out of control. National Relief provides real answers for small business debts.

Not paying your bills on time is a major issue. Your issue becomes compounded when you decide not to pay the bill at all. Your creditors are not going to simply hope you make a payment. They are going to take action to get their money. It is possible that your wages could be garnished to pay your creditors if you have credit card debt. However, there is a process that must be followed.

Creditors Must Get Authority First

Your creditors cannot simply go into your bank account and take your money. They must first file a lawsuit against you. A judge then has to rule in favor of your creditors in court. Only then can your creditors begin the process of garnishing your wages.

It is important to know that your creditors must first take these steps. Some creditors may try to garnish your wages without first going to court. This can open up the door for you to stop your wages from being garnished.

Creditors are also not able to threaten you with garnishment until they actually win a judgement. It is also illegal in most cases to threaten a lawsuit when they do not actually intend to sue. This can be construed as creditor harassment.

Certain types of income will be protected in the event that your wages are garnished. Social security, disability and alimony payments are usually exempt for garnishment for repayment of credit card debt.

How Much Can Be Garnished

Just because a creditor has received the right to garnish doesn’t mean they can take as much as they want. Only discretionary income is allowed to be taken away from you. In most cases, creditors can take 25 percent of any amount over $260.

Employers must still withhold social security taxes, federal withholding and unemployment insurance from an employee’s paycheck. Wages can then be garnished from the rest of eligible pay.

Your state may have garnishment laws that differ from federal laws. For example, Ohio and New York force creditors to give debtors a grace period before garnishing wages. Other states may exempt more income from garnishment.

Wage Garnishment Can Impact Your Credit

Having your wages garnished will do more than just lower your take-home pay. The judgement that was entered against you will go on your credit report. This could make you less attractive to lenders in the future as well as employers.

What lenders will see is that you were unable to pay your debts even though your had a job. Some lenders may interpret a judgement against you as an unwillingness to pay as opposed to an inability to pay. This will make lenders even more leery of loaning money to you in the future.

Wage garnishment also means you were not able to make payments on time. Missed payments are going to hammer your credit score. It is important to know that making payments on time will make up roughly a third of your overall credit score.

You can avoid a wage garnishment by making payment arrangements with your creditors. A debt settlement could be a good way to reorganize your finances.

Your paycheck can be garnished in the event you don’t make payments on your credit cards. However, do not panic if you find out your wages are being garnished. Verify that a judgement has in fact been against you in court. If not, you can take steps to invalidate the garnishment. Otherwise, be ready to have up to a quarter of your disposable income taken out of your check before you even get it. Call the National Debt Relief Group before your debt problems get this far. Avoid wage garnishment by resolving your debts now.

“Debt Purchased For Pennies on the Dollar”

Most debt collectors have purchased debt packages from the original creditors who don’t want to spend time trying to get the money back. Debt collectors purchase your debt for pennies on the dollar. They expect to only get a percentage of the debt back.

Debt collectors understand the legal process. They hope to “encourage” you to pay your bills. Lawsuits are long and expensive. They would prefer to settle with you.

Create a Financial Settlement Goal

Proactive settlement benefits all parties: creditor, debt collector and you. You don’t want to continue to be stressed out about your unpaid debt. You need to find a way out.

Assess your financial situation. What are your present payments? What do you want to accomplish with negotiations? What are you willing to surrender? What monthly payment levels can you handle?

For example, if a New York woman owes $10,000 on her credit cards and has monthly payments of $500, then what settlement goals should she consider? One, she could reduce the total debt balance below $10,000. Two, she could lower the monthly payment amount. Three, she could try to get the debt collector to remove any negative listings on her credit report.

“What is on your credit report?”

The Fair Isaac Corporation created your credit rating to help banks measure you as a credit risk. Your credit report includes your total debt balance, payment schedule, missed payments, accounts sent to debt collector and other financial information. Both the original creditor and debt collector have control over negative entries.

Debt collectors have different policies concerning settlement. These will range from demands for “payment in full” to offers to spread payments out while deleting negative lines on your credit report.

Deleting Negative Information

You have the right to dispute anything on your credit report. The credit reporting agencies must investigate any errors, mistakes or inaccurate entries. You must give a reason for any deletion.

Statute of Limitations

The debt collector has a statute of limitations for collecting the debt owed. The longest statute of limitations is for notarized documents and the shortest is for revolving credit card accounts.

When you make a payment to the debt collector, it automatically resets the statute of limitations because the partial payment “reaffirms” the debt obligation. So be very careful. Complete all agreements in writing before making any payments.

Only Sign When Completely Satisfied

Your debt probably has grown dramatically with principal, interest, penalty and collection fees added. Since most debt collectors purchased your debt for pennies on the dollar, they don’t expect to get 100% back.

Calculate your financial state of affairs. Determine what you are able to pay. Start negotiations below the amount you can pay. Figure out how payments will be made and what constitutes a breach of the agreement.

Don’t provide any bank account, employment or references. If the debt collectors have your job information, they might garnish you wages.

Get a written letter listing the new balance, payment amounts and when they are scheduled to be made. Only sign when everything is satisfactory.

Professional Debt Negotiators

Eventually, you need to face the music. Debt settlement stops the endless treadmill of debt that leads to nowhere but frustration. No one wants to file bankruptcy; debt arbitration is a real alternative. Reduce the actual balance and re-establish a sensible payment schedule.

Get professional negotiators on your side. Debt settlement is the most sensible response with both sides winning and losing. Your debt problems are not going to magically go away. Consolidate your debt into a more manageable format. Get started today with your free debt analysis.