Consumer debt may be moderating, but debt delinquencies are ticking up. Those rising delinquencies foreshadow more economic turmoil for U.S. households and domestic credit card issuers.
In the 1989 film The Abyss, a team of Navy SEALs is tasked with saving an American missile submarine in deep ocean waters. Various complications put the rescuers in danger of falling into what appeared to be a bottomless watery pit. American consumers today can relate to the diver's fear of impending doom-as a deepening recession forces many to pile on more debt than they can service.
Prime and subprime debt impacted
Equifax Inc., a credit reporting company, recently told Reuters that debt delinquencies are on the rise. There were some other disturbing facts from Equifax’s' November data on consumer debt:
• More than 12 percent of subprime cardholders were 60 days or more past due, an increase of 0.43 percent from the prior month.
• Nearly 4 percent of subprime auto loan borrowers were at least 60 days past due.
• A full 36.6 percent of subprime mortgage borrowers were at least 30 days behind on their mortgage payments.
• Almost 6 percent of prime mortgage borrowers were at least 30 days past due; this is well below the subprime level, but still high relative to historic norms.
Unemployment, spending hangover
Experts believe the growing delinquencies are related to the combination of increased unemployment and the lagging burden of excessive consumer spending in prior years.
• Increased unemployment. Last year, unemployment rose nearly 2 percentage points between January and November, from 4.9 to 6.7 percent.
• Spending hangover. Between 2005 and 2007, the savings rate in the U.S. remained near zero. Consumers had ample credit cards , and no reason not to purchase the things that they needed. Cash flow shortfalls were covered with plastic, and balances on credit cards swelled. Even though spending moderated in the second half of 2008, borrowers were still servicing those large credit balances. That debt burden is now becoming more intense, as borrowers struggle through the recessionary economy.
Economic turmoil ushers in conservatism
When the global financial crisis heated up in the second half of 2008, American consumers responded by reigning in their spending. In the third quarter of last year, consumer spending actually shrank by 3.8 percent, the largest decline since 1980. Balances on credit cards declined slightly also; Equifax reports that cumulative balances on bank-issued cards fell 0.21 percent to $834 billion between October and November of last year.
Unfortunately, the delinquencies are still rising-an indication that the current economy is taking a toll on American households. In addition, those delinquencies represent another challenge for banks that are already working to purge themselves of bad mortgage loans. Should the past-due debt trend continue, both borrowers and lenders might find themselves sliding towards impending financial doom.
If you feel you are in a situation similar to the above mentioned, please contact a company like Eagle One Debt Relief to see what your options are http://www.eagleonedebtrelief.com
Tuesday, January 25, 2011
Monday, April 19, 2010
Bank of Mom and Dad Shuts Amid White-Collar Struggle
I saw this article and it just hits home how Debt Relief can be a very important tool in getting our households back into good fiscal balance:
By MARY PILON
FAIRFIELD, Conn.—When Maurice Johnson was laid off a year ago from his six-figure salary as a managing director at GE Capital, it wasn't his future he was worried about.
It was his children's.
The family income of the Johnsons is a fifth of what it used to be. And the children are about to feel the pain. Mr. Johnson's two oldest are attending his alma mater, Johns Hopkins University, at an annual cost of $50,000 apiece. And his youngest daughter, 15 years old, recently began her own college search. Mr. Johnson isn't sure whether he'll be able to help her to go to college, or even to get the older kids to graduation.
After Maurice Johnson (left), with daughter Elsa (center) and wife Linda, was laid off from his job as a managing director at GE Capital, he worried about how he would provide for his children's future.
Mr. Johnson, who watched his own father struggle as an engineer without a college degree, was determined to do better for his own children.
"We saved like crazy from the minute they were born," he says. "Then, it all fell to pieces."
Many families such as the Johnsons—upper-middle-class professionals—are suddenly downwardly mobile. For years, they used rising family wealth to help foot the bill for college, down payments for houses and start-up cash for children's careers. But pay cuts, layoffs and the decadelong flatlining of the stock market mean many families can no longer help their children.
This comes as young adults could use a financial helping hand more than ever. The unemployment rate for workers ages 16 to 29 was 15.2% in March, the highest rate since 1948, according to the Bureau of Labor Statistics.
"It's almost a double whammy," says Ann Huff Stevens, an economics professor at the University of California at Davis. "If a parent goes through a job loss, they're going to contribute less. And there's a direct effect because kids themselves are earning less, too. A recession like this might have some lasting effects for parents and kids."
In general, highly trained and educated workers are faring better than those without degrees in this labor market. The unemployment rate for college graduates is 5%, compared with 9.7% overall. In general, the employment picture is improving, with employers adding 162,000 jobs in March, the biggest monthly gain in three years.
Even so, the average length of unemployment, 31 weeks, is at its highest level since 1948. There were a total of 2.3 million unemployed college graduates in March 2010, 1.45 million more than in March 2007, with heavy layoffs in white-collar sectors such as finance.
In the long run, the drop in parental aid could make young adults a more financially resilient generation, like children of the Great Depression. But for now, economists worry that without parental cash, young adults may put off entering the housing market, settling into career paths and having families.
"Now, not only do parents no longer have the money to help their children out, but banks will no longer lend to home buyers without the income to support repayment," says Cheryl Russell, a demographer and author of "Americans and Their Homes: Demographics of Homeownership."
The rate of home ownership among people ages 25 to 29 fell to 37.7% last year, from a peak of 42% in 2006, according to the U.S. Census. Home ownership for those under 25 fell to 23.3% from 26% in 2005, the lowest rate for any age group.
Indeed, the bank of Mom and Dad is closing at a time when young people are having trouble borrowing from traditional lenders. Some 22% of young people between the ages of 18 and 34 said they've been turned down for a mortgage, loan or credit card in the past year, according to a February survey from FindLaw.com, a legal marketing and information site. That's double the percentage of any other age group in its survey.
As a result, many young people are now moving home to save on rent. About 21% of young adults say they've either moved in with a friend or relative, or had a friend or relative move in with them because of the economy, according to a study from the Pew Research Center.
In past recessions, women would re-enter the work force to help prop up household income, says Katherine Newman, a Princeton University sociology professor. But now, more women are working and themselves experiencing layoffs. Before the 1990 recession, 57.4% of American women worked, and in the next two years, some 1.1 million more entered the work force. Today, it's the reverse. On the eve of the latest downturn in 2007, 59.3% were working and 2.6 million more women were unemployed. Women's overall participation rate in the work force has remained flat since then.
Many parents who were set to retire are now delaying it to compensate for battered retirement accounts, leaving even fewer openings for younger workers to fill. There are an additional 500,000 workers over the age of 65 in the work force now compared with 2007.
"We may have well given up on the idea that our kids will do better than us," Prof. Newman says. "But the idea that they should do as well, that's something we haven't given up on yet."
Before her December 2008 layoff from Bank of America Corp. as an executive recruiter, Diane Hayes bought a "dream house" for her family, which includes her three teenage daughters with disabilities, two with autism and one with Down syndrome. The 3,600-square-foot house in Orlando, Fla., had a pool in back that could be used for therapy and custom-designed rooms to accommodate five people into adulthood. "The pool was the only place we could all be together and enjoy ourselves," Mrs. Hayes says.
Her husband continues working as a writer, but without her six-figure income, the family was forced to sell the home in November. The Hayes had a $650,000 mortgage and sold the house for $375,000. Their lender forgave the difference as part of the sale, Mrs. Hayes said. But the family still has loans outstanding for $50,000.
They've since moved to a 1,200-square-foot, two-bedroom house nearby that they are renting for $1,200 a month. All three girls share one bedroom with bunk beds. The house is in the same neighborhood, so the family can use the same supermarkets and schools, hoping to ease the anxiety many autistic children face when adjusting to new environments.
The family had to cut the four different specialized summer camps that each child attended, at a cost of $1,600 for all three children per week. And they've been forced to eat into a nest egg designed to support the girls as adults.
"With kids with disabilities, there's no cheap way out," Mrs. Hayes says. She adds: "Other people can send their kids to community college, have them get part-time jobs, and think 'maybe our son or daughter will support us'…We can't do that."
Last month, Mrs. Hayes found some temporary work as a recruiter. The income is lower than her Bank of America salary, there are no benefits and her brother has helped pitch in with day care. She says she's grateful for the opportunity, but knows it could be precarious. "We're not going to spend on anything," she says.
In other families, the gaps in financial support have become glaring between siblings. Ten years ago, when Patricia Bennett earned more than $100,000 a year selling risk-management software on Wall Street, she paid $30,000 cash for her now 28-year-old son's freshman year at Morehouse College in Atlanta with little hassle.
After being laid off in April 2009, Ms. Bennett now makes $9.75 an hour as a part-time cashier at Williams-Sonoma, in addition to doing volunteer hospice care. In January, she received a foreclosure notice on her home in Monroe, N.Y. Her youngest son is a sophomore at Lafayette College and will have to drop out next year unless he obtains more scholarships and loans.
Last year, Lafayette increased financial aid by 8.5% and cut its operating budget by 5% to keep pace with the increase in financial-aid requests and prevent students from leaving for financial reasons "There's concern about reality today and what's ahead," says Robert Massa, Lafayette's vice president of communications.
Ms. Bennett's husband, William, was unemployed as a salesman for two years before he started selling cars on commission in July of 2009. Before they became eligible for health insurance with his new job, the family went without it for months at a time so that they could contribute around $1,000 for pocket money and bus tickets for their son to visit home.
The gap between their two sons' experiences is particularly frustrating for her. "It's a bitter pill to swallow," Ms. Bennett says.
Many parents are less able to help their children after graduation as well. Angelica Hoyos, a 26-year-old living in Los Angeles, has put her photography and sculpture career on hold since her parents pulled the financial plug earlier this year after the family's granite-countertop business suffered. Ms. Hoyos has moved in with her boyfriend, cut spending and earns about $1,000 a month doing free-lance design work and baby-sitting.
"My artistic career is put on the side because I have to make a living," she says.
For Mr. Johnson, the former GE Capital executive, not being able to see his children through college is particularly painful. Both he and his wife attended Johns Hopkins in Baltimore. When he decided to earn his masters in finance there decades ago, he says he had little doubt about it being "a good value proposition."
The Johnson children always had part-time jobs in high school. But in college, they struggled for months to find part-time and summer work over the past two years. Finally, one landed a seasonal job folding clothes at Old Navy. Last year, the Johnsons didn't qualify for work study because the household income was too high. Since resubmitting their aid application, they have qualified. Their son got a work-study gig at a university office.
Johns Hopkins last year added $2 million in financial aid just to accommodate the surge of additional aid requests for its 5,000 undergrads. Some 61% of higher-education institutions reported an increase of 10% or more in financial-aid applications than the previous year, according to a September 2009 survey from the National Association of Student Financial Aid Administrators. More than a million more federal financial-aid applications were filed during the beginning of 2009 than in the beginning of 2008, with a 16.3% increase among dependent students.
"We had folks who never needed aid before and now they have one, two parents unemployed," says Vincent Amoroso, the school's director of student financial services. "And these are folks who used to make $100,000 or $200,000 a year who are coming to see us."
Mr. Johnson made up to $550,000 a year, including bonuses, before losing his job in March 2009. The Johnsons had stashed $250,000 away for college.
If that money isn't tapped sooner for household expenses, it might buy two years of schooling for each of his children, Mr. Johnson calculates. Further expenses such as first homes and weddings are out of the question. "They're going to have to elope," he says.
In the summer of 2007, the Johnsons paid $1.5 million for their Fairfield home and took out a mortgage of $852,000. Mr. Johnson figures it could realistically sell for $800,000 today. Given the numbers, the family is trying to avoid moving and recently refinanced their house at a lower interest rate.
"It's emasculating," Mr. Johnson says. "I'm supposed to be providing for them, but I can't."
The children haven't talked about transferring to less expensive colleges yet. "I'm going to take it all day by day," says Kristian Johnson, 20, the oldest of the Johnson siblings. Now a sophomore, he says he's prepared to take out loans to finish.
Margot Johnson, 18, says her father's career experience has affected her goal as an economics major. "I want to study economics," she says, "but not something in the corporate world."
Mr. Johnson concedes that Elsa Johnson, the youngest, is "getting the raw end of the deal." By the time the 15-year-old daughter starts looking at colleges, most of the savings set aside for school could be gone.
Already passionate about fashion and design, Elsa says she'll opt for the least-expensive design school she can get into and is looking into paying for school herself. Until then, she's cut back on shopping trips and food and coffee spending with friends. She no longer asks for weekly allowances. "My parents are already stressed out enough," she says.
Meanwhile, Mr. Johnson continues to look for work and crunch numbers of the new household-budget reality.
"I know, I know—cry me a river and then build a bridge and get over it, right?" Mr. Johnson says. "Still, there was a set of expectations we established, consciously or not, and they are not being met any more."
By MARY PILON
FAIRFIELD, Conn.—When Maurice Johnson was laid off a year ago from his six-figure salary as a managing director at GE Capital, it wasn't his future he was worried about.
It was his children's.
The family income of the Johnsons is a fifth of what it used to be. And the children are about to feel the pain. Mr. Johnson's two oldest are attending his alma mater, Johns Hopkins University, at an annual cost of $50,000 apiece. And his youngest daughter, 15 years old, recently began her own college search. Mr. Johnson isn't sure whether he'll be able to help her to go to college, or even to get the older kids to graduation.
After Maurice Johnson (left), with daughter Elsa (center) and wife Linda, was laid off from his job as a managing director at GE Capital, he worried about how he would provide for his children's future.
Mr. Johnson, who watched his own father struggle as an engineer without a college degree, was determined to do better for his own children.
"We saved like crazy from the minute they were born," he says. "Then, it all fell to pieces."
Many families such as the Johnsons—upper-middle-class professionals—are suddenly downwardly mobile. For years, they used rising family wealth to help foot the bill for college, down payments for houses and start-up cash for children's careers. But pay cuts, layoffs and the decadelong flatlining of the stock market mean many families can no longer help their children.
This comes as young adults could use a financial helping hand more than ever. The unemployment rate for workers ages 16 to 29 was 15.2% in March, the highest rate since 1948, according to the Bureau of Labor Statistics.
"It's almost a double whammy," says Ann Huff Stevens, an economics professor at the University of California at Davis. "If a parent goes through a job loss, they're going to contribute less. And there's a direct effect because kids themselves are earning less, too. A recession like this might have some lasting effects for parents and kids."
In general, highly trained and educated workers are faring better than those without degrees in this labor market. The unemployment rate for college graduates is 5%, compared with 9.7% overall. In general, the employment picture is improving, with employers adding 162,000 jobs in March, the biggest monthly gain in three years.
Even so, the average length of unemployment, 31 weeks, is at its highest level since 1948. There were a total of 2.3 million unemployed college graduates in March 2010, 1.45 million more than in March 2007, with heavy layoffs in white-collar sectors such as finance.
In the long run, the drop in parental aid could make young adults a more financially resilient generation, like children of the Great Depression. But for now, economists worry that without parental cash, young adults may put off entering the housing market, settling into career paths and having families.
"Now, not only do parents no longer have the money to help their children out, but banks will no longer lend to home buyers without the income to support repayment," says Cheryl Russell, a demographer and author of "Americans and Their Homes: Demographics of Homeownership."
The rate of home ownership among people ages 25 to 29 fell to 37.7% last year, from a peak of 42% in 2006, according to the U.S. Census. Home ownership for those under 25 fell to 23.3% from 26% in 2005, the lowest rate for any age group.
Indeed, the bank of Mom and Dad is closing at a time when young people are having trouble borrowing from traditional lenders. Some 22% of young people between the ages of 18 and 34 said they've been turned down for a mortgage, loan or credit card in the past year, according to a February survey from FindLaw.com, a legal marketing and information site. That's double the percentage of any other age group in its survey.
As a result, many young people are now moving home to save on rent. About 21% of young adults say they've either moved in with a friend or relative, or had a friend or relative move in with them because of the economy, according to a study from the Pew Research Center.
In past recessions, women would re-enter the work force to help prop up household income, says Katherine Newman, a Princeton University sociology professor. But now, more women are working and themselves experiencing layoffs. Before the 1990 recession, 57.4% of American women worked, and in the next two years, some 1.1 million more entered the work force. Today, it's the reverse. On the eve of the latest downturn in 2007, 59.3% were working and 2.6 million more women were unemployed. Women's overall participation rate in the work force has remained flat since then.
Many parents who were set to retire are now delaying it to compensate for battered retirement accounts, leaving even fewer openings for younger workers to fill. There are an additional 500,000 workers over the age of 65 in the work force now compared with 2007.
"We may have well given up on the idea that our kids will do better than us," Prof. Newman says. "But the idea that they should do as well, that's something we haven't given up on yet."
Before her December 2008 layoff from Bank of America Corp. as an executive recruiter, Diane Hayes bought a "dream house" for her family, which includes her three teenage daughters with disabilities, two with autism and one with Down syndrome. The 3,600-square-foot house in Orlando, Fla., had a pool in back that could be used for therapy and custom-designed rooms to accommodate five people into adulthood. "The pool was the only place we could all be together and enjoy ourselves," Mrs. Hayes says.
Her husband continues working as a writer, but without her six-figure income, the family was forced to sell the home in November. The Hayes had a $650,000 mortgage and sold the house for $375,000. Their lender forgave the difference as part of the sale, Mrs. Hayes said. But the family still has loans outstanding for $50,000.
They've since moved to a 1,200-square-foot, two-bedroom house nearby that they are renting for $1,200 a month. All three girls share one bedroom with bunk beds. The house is in the same neighborhood, so the family can use the same supermarkets and schools, hoping to ease the anxiety many autistic children face when adjusting to new environments.
The family had to cut the four different specialized summer camps that each child attended, at a cost of $1,600 for all three children per week. And they've been forced to eat into a nest egg designed to support the girls as adults.
"With kids with disabilities, there's no cheap way out," Mrs. Hayes says. She adds: "Other people can send their kids to community college, have them get part-time jobs, and think 'maybe our son or daughter will support us'…We can't do that."
Last month, Mrs. Hayes found some temporary work as a recruiter. The income is lower than her Bank of America salary, there are no benefits and her brother has helped pitch in with day care. She says she's grateful for the opportunity, but knows it could be precarious. "We're not going to spend on anything," she says.
In other families, the gaps in financial support have become glaring between siblings. Ten years ago, when Patricia Bennett earned more than $100,000 a year selling risk-management software on Wall Street, she paid $30,000 cash for her now 28-year-old son's freshman year at Morehouse College in Atlanta with little hassle.
After being laid off in April 2009, Ms. Bennett now makes $9.75 an hour as a part-time cashier at Williams-Sonoma, in addition to doing volunteer hospice care. In January, she received a foreclosure notice on her home in Monroe, N.Y. Her youngest son is a sophomore at Lafayette College and will have to drop out next year unless he obtains more scholarships and loans.
Last year, Lafayette increased financial aid by 8.5% and cut its operating budget by 5% to keep pace with the increase in financial-aid requests and prevent students from leaving for financial reasons "There's concern about reality today and what's ahead," says Robert Massa, Lafayette's vice president of communications.
Ms. Bennett's husband, William, was unemployed as a salesman for two years before he started selling cars on commission in July of 2009. Before they became eligible for health insurance with his new job, the family went without it for months at a time so that they could contribute around $1,000 for pocket money and bus tickets for their son to visit home.
The gap between their two sons' experiences is particularly frustrating for her. "It's a bitter pill to swallow," Ms. Bennett says.
Many parents are less able to help their children after graduation as well. Angelica Hoyos, a 26-year-old living in Los Angeles, has put her photography and sculpture career on hold since her parents pulled the financial plug earlier this year after the family's granite-countertop business suffered. Ms. Hoyos has moved in with her boyfriend, cut spending and earns about $1,000 a month doing free-lance design work and baby-sitting.
"My artistic career is put on the side because I have to make a living," she says.
For Mr. Johnson, the former GE Capital executive, not being able to see his children through college is particularly painful. Both he and his wife attended Johns Hopkins in Baltimore. When he decided to earn his masters in finance there decades ago, he says he had little doubt about it being "a good value proposition."
The Johnson children always had part-time jobs in high school. But in college, they struggled for months to find part-time and summer work over the past two years. Finally, one landed a seasonal job folding clothes at Old Navy. Last year, the Johnsons didn't qualify for work study because the household income was too high. Since resubmitting their aid application, they have qualified. Their son got a work-study gig at a university office.
Johns Hopkins last year added $2 million in financial aid just to accommodate the surge of additional aid requests for its 5,000 undergrads. Some 61% of higher-education institutions reported an increase of 10% or more in financial-aid applications than the previous year, according to a September 2009 survey from the National Association of Student Financial Aid Administrators. More than a million more federal financial-aid applications were filed during the beginning of 2009 than in the beginning of 2008, with a 16.3% increase among dependent students.
"We had folks who never needed aid before and now they have one, two parents unemployed," says Vincent Amoroso, the school's director of student financial services. "And these are folks who used to make $100,000 or $200,000 a year who are coming to see us."
Mr. Johnson made up to $550,000 a year, including bonuses, before losing his job in March 2009. The Johnsons had stashed $250,000 away for college.
If that money isn't tapped sooner for household expenses, it might buy two years of schooling for each of his children, Mr. Johnson calculates. Further expenses such as first homes and weddings are out of the question. "They're going to have to elope," he says.
In the summer of 2007, the Johnsons paid $1.5 million for their Fairfield home and took out a mortgage of $852,000. Mr. Johnson figures it could realistically sell for $800,000 today. Given the numbers, the family is trying to avoid moving and recently refinanced their house at a lower interest rate.
"It's emasculating," Mr. Johnson says. "I'm supposed to be providing for them, but I can't."
The children haven't talked about transferring to less expensive colleges yet. "I'm going to take it all day by day," says Kristian Johnson, 20, the oldest of the Johnson siblings. Now a sophomore, he says he's prepared to take out loans to finish.
Margot Johnson, 18, says her father's career experience has affected her goal as an economics major. "I want to study economics," she says, "but not something in the corporate world."
Mr. Johnson concedes that Elsa Johnson, the youngest, is "getting the raw end of the deal." By the time the 15-year-old daughter starts looking at colleges, most of the savings set aside for school could be gone.
Already passionate about fashion and design, Elsa says she'll opt for the least-expensive design school she can get into and is looking into paying for school herself. Until then, she's cut back on shopping trips and food and coffee spending with friends. She no longer asks for weekly allowances. "My parents are already stressed out enough," she says.
Meanwhile, Mr. Johnson continues to look for work and crunch numbers of the new household-budget reality.
"I know, I know—cry me a river and then build a bridge and get over it, right?" Mr. Johnson says. "Still, there was a set of expectations we established, consciously or not, and they are not being met any more."
Wednesday, April 14, 2010
Reforms to Protect American Credit Card Holders
Government Reforms Legislation
http://www.whitehouse.gov/the_press_office/Fact-Sheet-Reforms-to-Protect-American-Credit-Card-Holders/
http://www.whitehouse.gov/the_press_office/Fact-Sheet-Reforms-to-Protect-American-Credit-Card-Holders/
Monday, April 12, 2010
How do Debt Relief and Debt Settlement Companies Work ?
Debt reduction companies are proven authorities in debt negotiation to reduce your debt in the best way possible for you, especially when you’re least interested in the worst alternatives like Chapter 7 bankruptcy.
The best debt settlement companies are there to help you navigate through tough financial times no matter how small the debt. The heart of the matter is debt reduction, we can help you reduce your debt by negotiating the balances on credit card debt down to 30-40% of what you owe. Then setting up payment plans you can afford to repay that lowered debt amount.
Debt Settlement Will Reduce Your Debt And Save Thousands Off Your Debt!
You know what’s best for your financial future – and debt reduction companies know best how to get you back on track. Financially strapped people across the country have chosen a debt reduction program to effectively structure their debt.
Your debts can seem like an insurmountable obligation – and the most frustrating thing with credit card debt is that as hard as you work to make minimum payments, your balances never seem to go down. Throw in a bad economy and it makes paying down your debt even harder.
You know you are able to move forward financially, and all you need to do is reduce your debt, re-establish your credit rating and get you back on track. That next car purchase, or first home is out there on the horizon, but you just need to get the credit card bills off your back.
Debt relief companies understand your hard work and best efforts, so you can depend on qualified counselors, and legal pros in debt negotiation and debt reduction to put your debts on the firing block. Let them help you, they are experts in the field and can give you valuable insight into the depths of the credit card industry and what they are all about.
For a free Debt Consultation or to read more please call my firms company Eagle One Debt Relief at (888) 490-3651, or visit us on the web at www.eagleonedebtrelief.com .
The best debt settlement companies are there to help you navigate through tough financial times no matter how small the debt. The heart of the matter is debt reduction, we can help you reduce your debt by negotiating the balances on credit card debt down to 30-40% of what you owe. Then setting up payment plans you can afford to repay that lowered debt amount.
Debt Settlement Will Reduce Your Debt And Save Thousands Off Your Debt!
You know what’s best for your financial future – and debt reduction companies know best how to get you back on track. Financially strapped people across the country have chosen a debt reduction program to effectively structure their debt.
Your debts can seem like an insurmountable obligation – and the most frustrating thing with credit card debt is that as hard as you work to make minimum payments, your balances never seem to go down. Throw in a bad economy and it makes paying down your debt even harder.
You know you are able to move forward financially, and all you need to do is reduce your debt, re-establish your credit rating and get you back on track. That next car purchase, or first home is out there on the horizon, but you just need to get the credit card bills off your back.
Debt relief companies understand your hard work and best efforts, so you can depend on qualified counselors, and legal pros in debt negotiation and debt reduction to put your debts on the firing block. Let them help you, they are experts in the field and can give you valuable insight into the depths of the credit card industry and what they are all about.
For a free Debt Consultation or to read more please call my firms company Eagle One Debt Relief at (888) 490-3651, or visit us on the web at www.eagleonedebtrelief.com .
Thursday, April 8, 2010
The Ups and Downs of Credit Card Debt Settlement
By: Scott Heggs
Are you a self-confessed shopaholic who buys anything and everything that you get your shopping addicted hands on? Such thoughtless and impulsive buying will most likely result in the accumulation of a bunch of junk that will simply collect dust. Can you even remember that silk shirt you just had to have and since it was a virtual steal at 50% off you just had to buy it? Where is it now and how many times have you actually worn it? Is it still fashionable?
If you're like most people, chances are you'll have to rummage through bins and bins of collected shopping "litter" which you've accumulated through the years, just to be able to see that once precious scarf. You may still be in a state of denial by saying "Fashion goes round and round and that shirt will have its shining moment once again."
Unfortunately, many people fall into this mode of impulsive buying that they really can't afford and before they realize it they become saddled with debt. If you fall into this category, you'll soon need to learn a thing or two about debt settlement which can assist you in extracting yourself out of that self-imposed state of financial trauma and begin to start rebuilding your life bit by bit. And the time to start is now! Of course, you have to be honest with yourself, admit that you've got a serious debt problem and then humble yourself enough to seek the help you need to pull yourself out of this devastating ordeal.
First things first, a lot of people may actually think that they only have a few choices when it comes to solving their debt problems. The two most common options for those who are burdened with enormous amounts of debt are either to consider declaring bankruptcy or debt consolidation. Unfortunately, if you take the easy way out by declaring bankruptcy, it will leave an embarrassing and indelible mark on your credit report for up to 7 years, which will result in higher interest rates, less credit and if you try do qualify for a mortgage (some lenders do give loans immediately after bankruptcy) you will most likely not be able to get a loan to cover 100% of the financing you need. Normally, an 80% first mortgage and if you can get a second mortgage, it will be at much higher interest rate and probably only 10% of the loan value for a total of 90% of the loan to value and you'll have to come up with 10% down.
Clearly, everything will come with a higher price for a period of time but you'll have to weigh that with a straight debt consolidation solution in which you pay off your debt. However, in many cases you can negotiate with the collection agency and it's realistic to get 50% - 70% of the debt forgiven, if you can show that you'll continue to make monthly payments until the remainder is paid off.
Many of the debt settlement / debt consolidation companies were actually established by the credit card companies themselves. Why, you ask... because it only makes sense for the credit card companies to help you pay off your debt because they can either forgive some of the debt or reduce the interest rates, lower the monthly minimum payment requirements or some combination and get paid a portion of the money owed or receive nothing if you declare bankruptcy. What would you do if you were in their shoes? The answer is obvious. This is why a lot of people who have been saddled with debt are now being offered debt settlement. Of course, not all debt consolidation service companies are owned by credit card companies but many are.
Some groups offer debt settlement programs through arbitration. The "selling point" when it comes to these kinds of solutions is that debt settlement will actually help end your debt problems, without having to go through declaring bankruptcy, without having to pay overcharged debt consolidation program fees as well as helping you avoid getting caught in the debt consolidation trap that a lot of people have fallen victim to.
In many cases, what the organizations do that offer debt settlement services is negotiate your debt down with the collection agencies that have been given your case. I would encourage you to contact a number of companies to ensure you feel comfortable and that you are working with a quality company that doesn't over-charge you for their services.
Of course, you'll have to decide what route you want to take... bankruptcy versus debt settlement but shop around and realize that you do have options. The internet is full of companies offering their bankruptcy or debt settlement services, but be careful and don't let them push you around and never work with anyone you don't feel 100 percent comfortable with.
For a free Debt Consultation or to read more please call my firms company Eagle One Debt Relief at (888) 490-3651, or visit us on the web http://www.eagleonedebtrelief.com/
Are you a self-confessed shopaholic who buys anything and everything that you get your shopping addicted hands on? Such thoughtless and impulsive buying will most likely result in the accumulation of a bunch of junk that will simply collect dust. Can you even remember that silk shirt you just had to have and since it was a virtual steal at 50% off you just had to buy it? Where is it now and how many times have you actually worn it? Is it still fashionable?
If you're like most people, chances are you'll have to rummage through bins and bins of collected shopping "litter" which you've accumulated through the years, just to be able to see that once precious scarf. You may still be in a state of denial by saying "Fashion goes round and round and that shirt will have its shining moment once again."
Unfortunately, many people fall into this mode of impulsive buying that they really can't afford and before they realize it they become saddled with debt. If you fall into this category, you'll soon need to learn a thing or two about debt settlement which can assist you in extracting yourself out of that self-imposed state of financial trauma and begin to start rebuilding your life bit by bit. And the time to start is now! Of course, you have to be honest with yourself, admit that you've got a serious debt problem and then humble yourself enough to seek the help you need to pull yourself out of this devastating ordeal.
First things first, a lot of people may actually think that they only have a few choices when it comes to solving their debt problems. The two most common options for those who are burdened with enormous amounts of debt are either to consider declaring bankruptcy or debt consolidation. Unfortunately, if you take the easy way out by declaring bankruptcy, it will leave an embarrassing and indelible mark on your credit report for up to 7 years, which will result in higher interest rates, less credit and if you try do qualify for a mortgage (some lenders do give loans immediately after bankruptcy) you will most likely not be able to get a loan to cover 100% of the financing you need. Normally, an 80% first mortgage and if you can get a second mortgage, it will be at much higher interest rate and probably only 10% of the loan value for a total of 90% of the loan to value and you'll have to come up with 10% down.
Clearly, everything will come with a higher price for a period of time but you'll have to weigh that with a straight debt consolidation solution in which you pay off your debt. However, in many cases you can negotiate with the collection agency and it's realistic to get 50% - 70% of the debt forgiven, if you can show that you'll continue to make monthly payments until the remainder is paid off.
Many of the debt settlement / debt consolidation companies were actually established by the credit card companies themselves. Why, you ask... because it only makes sense for the credit card companies to help you pay off your debt because they can either forgive some of the debt or reduce the interest rates, lower the monthly minimum payment requirements or some combination and get paid a portion of the money owed or receive nothing if you declare bankruptcy. What would you do if you were in their shoes? The answer is obvious. This is why a lot of people who have been saddled with debt are now being offered debt settlement. Of course, not all debt consolidation service companies are owned by credit card companies but many are.
Some groups offer debt settlement programs through arbitration. The "selling point" when it comes to these kinds of solutions is that debt settlement will actually help end your debt problems, without having to go through declaring bankruptcy, without having to pay overcharged debt consolidation program fees as well as helping you avoid getting caught in the debt consolidation trap that a lot of people have fallen victim to.
In many cases, what the organizations do that offer debt settlement services is negotiate your debt down with the collection agencies that have been given your case. I would encourage you to contact a number of companies to ensure you feel comfortable and that you are working with a quality company that doesn't over-charge you for their services.
Of course, you'll have to decide what route you want to take... bankruptcy versus debt settlement but shop around and realize that you do have options. The internet is full of companies offering their bankruptcy or debt settlement services, but be careful and don't let them push you around and never work with anyone you don't feel 100 percent comfortable with.
For a free Debt Consultation or to read more please call my firms company Eagle One Debt Relief at (888) 490-3651, or visit us on the web http://www.eagleonedebtrelief.com/
Tuesday, April 6, 2010
Debt Relief Companies - The Best Way to Locate Professional Debt Settlement Companies
Many a time we find ourselves in a bad financial crisis, where bankruptcy apparently seems to be the best option. But think twice, for the repercussions can be huge, besides the long drawn public trials, your credit history will also be ruined for the a good six to seven years in the future, with in which you will not be able to take any credit from the market, which means the next time you find yourself in a soup, there would not be any helping hands.
In case you are wondering let me tell you that there is a better way out than bankruptcy, it is known as debt relief. Now this is not a new concept, but it has become more common these days. According to this concept the debtor, in case of inability to pay off the credit overdue, negotiates with the creditor and pays a certain portion of the total amount to settle the entire debt. Now this amount can be anything, from 20% (minimum) to 80% (maximum) of the total debt, depending upon your negotiation skills.
However for the less legally savvy of us there are professional debt settlement companies who have huge debt relief operations. They have experts who can deftly negotiate with the crediting institution, and get you the best possible deal. Of course, they charge a certain percent of the money you save as their service charge, but despite that you get a good deal.
However, we would like to warn you that opt for this option only when it is absolutely necessary, as it will definitely affect your credit rating, not as badly as a bankruptcy would perhaps, but it will affect it.
Choose your debt relief company wisely as you may get fooled by their false promises. No reputable firm will promise you a settlement pre-maturely without seeing your profile, and no one will promise to rectify your bad credit either. So do not fall for these false claims, that are meant for attracting customers.
To get a free no obligation debt relief consultation, go to the following link:
http://www.eagleonedebtrelief.com/
In case you are wondering let me tell you that there is a better way out than bankruptcy, it is known as debt relief. Now this is not a new concept, but it has become more common these days. According to this concept the debtor, in case of inability to pay off the credit overdue, negotiates with the creditor and pays a certain portion of the total amount to settle the entire debt. Now this amount can be anything, from 20% (minimum) to 80% (maximum) of the total debt, depending upon your negotiation skills.
However for the less legally savvy of us there are professional debt settlement companies who have huge debt relief operations. They have experts who can deftly negotiate with the crediting institution, and get you the best possible deal. Of course, they charge a certain percent of the money you save as their service charge, but despite that you get a good deal.
However, we would like to warn you that opt for this option only when it is absolutely necessary, as it will definitely affect your credit rating, not as badly as a bankruptcy would perhaps, but it will affect it.
Choose your debt relief company wisely as you may get fooled by their false promises. No reputable firm will promise you a settlement pre-maturely without seeing your profile, and no one will promise to rectify your bad credit either. So do not fall for these false claims, that are meant for attracting customers.
To get a free no obligation debt relief consultation, go to the following link:
http://www.eagleonedebtrelief.com/
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