Kevin – Let’s look at it this way. You’re paying roughly $3600 a year in interest on that debt. Over five years that’s a little over $18,000. The counseling agency can get that down to 0 (you won’t even find a debt consolidation loan for that rate) and you’ll be debt-free at the end of those five years. The damage to your credit won’t be anywhere near what it would be with debt settlement.

Revolving (credit card) debt can have a great impact on credit scores as it will increase your balance-to-limit ratio and lower the amount of available credit that you have. The higher your revolving balances inch up to the limits, the more it hurts the credit scores. Depending on the situation and your credit scores, a bankruptcy, debt consolidation plan, or a setup of a budget and timeframe for getting out of debt could be options. Once you’re ankle-deep in revolving debt, it can be tricky to dig yourself out so getting professional advice is important.
You'd make the minimum payments on all debts, and pay as much extra as possible toward the $1,000 credit card balance. Once that was paid off, the new "minimum" payment for the card with the $3,000 balance would be $400 (the original $300 minimum plus the $100 minimum you used to make on the card you paid off). Extra cash would also go to repay that card. Finally, once both of those were paid off, you'd focus all your attention on the personal loan. The new "minimum" payment would be $650 ($300 + $250 + $100). 
It’s hard at first, because most of us aren’t used to doing that. (Especially if we’re living on a low income.) But it’s absolutely doable, and gets easier with practice. And once you start paying stuff off, it becomes even easier because your money isn’t flying out the door to service debt. You have MORE money available, which makes things easier still. It’s the exact opposite of a vicious circle.
Of course, $800 a month in credit-card bills is a lot to handle, which is where debt management comes in. One of the companies I profile further down, InCharge, can help reduce interest rates by an average of 6% to 9%. Assuming the best scenario (a 9% interest rate drop) and a four-year plan, your monthly payment could shrink to $576 (this includes a monthly fee of $49, which could be lower or dropped completely, depending on your situation) and your total interest paid would shrink to $5,276.
Within five days after a debt collector first contacts you, the collector must send you a written notice that tells you the name of the creditor, how much you owe, and what action to take if you believe you do not owe the money. If you owe the money or part of it, contact the creditor to arrange for payment. If you believe you do not owe the money, contact the creditor in writing and send a copy to the collection agency informing them with a letter not to contact you.
What Does It Cost? First of all, there are no upfront fees and second, we only get paid when your debt is reduced. We only get paid for delivering results. Having said that, the fee varies by debt amount and the state you live, it ranges from 18-25% of the total debt enrolled. You can compare this to the 15-29% average interest charges you pay every year to your credit card companies and see our option can be an affordable option.

Whether you’re carrying credit card debt, personal loans, or student loans, one of the best ways to pay them down sooner is to make more than the minimum monthly payment. Doing so will not only help you save on interest throughout the life of your loan, but it will also speed up the payoff process. To avoid any headaches, make sure your loan doesn’t charge any prepayment penalties before you get started.

Cons: Specific to National Debt Relief, it is not available in all states, so if you are one of the 16 states it doesn’t operate in, you can’t use it. In generally, there are always risks to debt relief. If you choose debt settlement or bankruptcy, it can affect your credit score. Know the risks before you decide to go forward with any debt relief program.

While your credit score may suffer if you’re falling behind on monthly payments before you get your debt management plan set up, starting your plan should provide some relief. Your credit score should increase as you begin making regular monthly payments and your debt balances drop. Experian does note that you may see some negative side effects when accounts are closed, usually due to changes with your credit utilization rate or credit mix.

National Debt Relief recently refunded part of the money that was saved in my account before I terminated my agreement with the company. I found this action on their part to be quite surprising and very much appreciated. This leads me to believe that they do have the best interest of their customers at heart. I have chosen to work with another company in becoming debt free and am very thankful for the services provided to me from National Debt Relief.
National Debt Relief uses debt settlement as a way to lower its clients’ debt. Settlement lets the company’s debt lawyers negotiate lower outstanding balances with creditors. Settlements can also lead to lower interest rates and waived fees. National Debt Relief, however, acknowledges that some debtors will not negotiate in good faith, which makes it difficult or impossible for settlements to work.

thankyou for the imformation it was very helpful and as of today i’m going to my up stairs and get all of my childrens toy’s and different things that are in really fair condition and start selling thing to get out of dept i’ve always been a stay at home mom i’m going to get a part time job and start doubling up on certain depts thankyou we recieved a letter from out morgage company and they told us our house payments went down and i told my husband no you still need to pay the same amount but add more money to the payments
Whether you’re carrying credit card debt, personal loans, or student loans, one of the best ways to pay them down sooner is to make more than the minimum monthly payment. Doing so will not only help you save on interest throughout the life of your loan, but it will also speed up the payoff process. To avoid any headaches, make sure your loan doesn’t charge any prepayment penalties before you get started.
“Clients who are able to stay with the program and get all their debt settled realize approximate savings of 50% before fees, or 30% including our fees, over 24 to 48 months. All claims are based on enrolled debts. Not all debts are eligible for enrollment. Not all clients complete our program for various reasons, including their ability to save sufficient funds. Estimates based on prior results, which will vary based on specific circumstances. We do not guarantee that your debts will be lowered by a specific amount or percentage or that you will be debt-free within a specific period of time. We do not assume consumer debt, make monthly payments to creditors or provide tax, bankruptcy, accounting or legal advice or credit repair services. Not available in all states. Please contact a tax professional to discuss tax consequences of settlement. Please consult with a bankruptcy attorney for more information on bankruptcy. Read and understand all program materials prior to enrollment, including potential adverse impact on credit rating.”
You cannot use your existing credit cards while you’re on a debt management plan, nor can you open new accounts. McClary also said that if you do manage to open new credit card accounts during your debt management plan, existing creditors who find out may stop participating in your debt management plan and reset your account to its original terms and interest rate.
For many consumers who realize "I need help with my debt" and who come to us with questions like "How do I manage credit card debt more effectively," we often suggest a debt management program. Under this approach, you'll make one payment each month to us and we'll pay all your creditors for you. This ensures timely payments, simplifies your finances and lets us work with your creditors to reduce interest rates and finance charges.
Step 1: Open a dedicated savings account. At the start of your debt settlement program, National Debt Relief requires that you open a savings account where you will begin making monthly payments. The amount you pay each month is decided on by National Debt Relief, and is generally lower than the total payments you’re currently making to creditors. You are in total control of the funds in your account, which is only disbursed once a settlement is reached between National Debt Relief (on your behalf) and your creditors.
According to research, more than half of American consumers (57%) don’t have enough cash to cover an unexpected expense of $500 or more. Remedy: It’s impossible to predict unemployment, car accidents or busted plumbing, which is why every home needs an emergency fund. Experts say put 3-6 months of expenses aside for emergencies. It might take a while to get there if you’re focused on paying off debt, but again, it has to be part of your monthly budget. Set aside at least 5% of your income in an emergency fund, at least until you have three months of expenses covered.
If your financial problems stem from too much debt or your inability to repay your debts, a credit counseling agency may recommend that you enroll in a debt management plan (DMP). A DMP alone is not credit counseling, and DMPs are not for everyone. Don’t sign up for one of these plans unless and until a certified credit counselor has spent time thoroughly reviewing your financial situation, and has offered you customized advice on managing your money. Even if a DMP is appropriate for you, a reputable credit counseling organization still can help you create a budget and teach you money management skills.

It’s important to know that as part of this first call National Debt Relief will run a soft credit check to see who your creditors are, how much you owe and if your debts are eligible to be included in a debt settlement plan. We recommend taking quick stock of your budget and your monthly expenses. The debt specialist you speak to will ask about this so they can calculate how much you can afford to pay into a debt settlement plan.
DISCLAIMER - Debt.com does not provide direct debt adjustment services, but, upon request, acts as a locator service for BBB registered companies. It is ultimately up to you to determine whether the companies that we may introduce you to are appropriate for your situation. For debt consolidation programs, where permissible by law, companies may charge a one-time enrollment fee typically from $25 up to $75 for account establishment and for debt relief proposals submitted on your behalf to each of your creditors. Monthly program administration fees will vary from $5 but no greater than $75 depending on your state of residence and/or the number of creditors who agree to accept proposals and become enrolled in the program. Fees subject to change if permissible by law. For debt settlement programs, by law, you may not be charged any fee until a debt settlement is arranged on your behalf, you approve the settlement, and at least one payment is made towards the settlement. Each program offered by independent financial service providers is unique so ask them for their complete details of the program and fees.
Dealing with the IRS can be a very daunting task to take on alone. Fortunately, tax specialists exist to help guide you through the process of eliminating tax debt. By using DebtHelp.com, you will be able to connect with top tax experts in the US and regain control over your taxes, rather than having your taxes control you. Browse our quick guide to tax debt, our large archive of tax articles, and then use our solution finder to contact a tax specialist.
Are you tired of paying a high interest rate on your student loan debt? You may be looking for ways to refinance your student loans at a lower interest rate, but don’t know where to turn. We have created the most complete list of lenders currently willing to refinance student loan debt. We recommend you start here and check rates from the top 7 national lenders offering the best student loan refinance products. All of these lenders (except Discover) also allow you to check your rate without impacting your score (using a soft credit pull), and offer the best rates of 2018:
Tally will ensure that you never miss a payment or receive late fees again – as long as you pay Tally on time, then Tally will pay down your credit card balances on time each month. Service is currently available in Arkansas, California, Colorado, Connecticut, DC, Florida, Illinois, Louisiana, Massachusetts, Michigan, Minnesota, New Jersey, New York, Ohio, Texas, Utah, Washington, and Wisconsin. The Tally line of credit is required to use the app. Interest rates are between 7.9% and 19.9% per year depending on your credit history (varies based on the Prime Rate). This information is accurate as of November 2018.
I am 27 and looking to buy a house but I am 50 points shy of getting a good loan and my debt to income ratio is over 50%. I’ve been googling a bunch of information but can’t tell who is reliable how being with a credit counseling would help or even a legal services that are being advertise to pay off short term debts. I just want to know my best opitions to help repair my credit score (as quickly as I can) in addition to it not affecting my taxes.
Great article. We are in the process of paying down debt, and the freedom we feel in watching that number decrease is a beautiful thing! Doing something RIGHT AWAY is key because, as your chart above shows, the greater the amount of money going into paying debt, the less you have to spend (even on the things you truly need!), so the debt pile increases and you never get out from under it. Everyone can do something NOW to see a shift in that picture. It all starts with an earnest desire to confront and change. Thanks for sharing.
A debt collector generally is a person or company that regularly collects debts owed to others, usually when those debts are past-due. This includes collection agencies, lawyers who collect debts as part of their business, and companies that buy delinquent debts and then try to collect them. The Fair Debt Collection Practices Act (FDCPA) prohibits debt collectors from using abusive, unfair, or deceptive practices to collect from you.
Bankruptcy. Declaring bankruptcy has serious consequences, including lowering your credit score, but credit counselors and other experts say that in some cases, it may make the most sense. Filing for bankruptcy under Chapter 13 allows people with a steady income to keep property, like a mortgaged house or a car, that they might otherwise lose through the Chapter 7 bankruptcy process. In Chapter 13, the court approves a repayment plan that allows you to pay off your debts over a three to five year period, without surrendering any property. After you have made all the payments under the plan, your debts are discharged. As part of the Chapter 13 process, you will have to pay a lawyer, and you must get credit counseling from a government-approved organization within six months before you file for any bankruptcy relief.
Often, one of the first things that people ask when they come to us is "what are my credit card debt options?" Typically, consumers want help consolidating debt, which means taking out a new loan to pay off a number of other debts. The hope is that with a lower interest rate on a new loan they'll save money, and with just one loan payment to make, they'll stay current with their creditors more easily.
On the plus side, if you pay off a card balance that’s close to the credit limit, you may improve your “utilization ratio”—the ratio that compares your credit limits with the balances you currently have—provided you leave the card open after paying it off. But simply moving balances from one card to another is unlikely to do a whole lot for your scores.
Choose your lender. With debt consolidation, you can choose the lender you work with. And you have plenty of options to choose from. You can compare lenders here at our debt consolidation loan marketplace. You may get to explore loan offers after inputting some basic information. You can also use our widget below and compare offers from up to five different lenders on LendingTree.
Having said that, the fees for our services vary by state and the amount of your debt. The fee varies between 18-25% of your enrolled debt. Compared to the $1000s in interest you will pay on your credit cards while you struggle to pay them off, you can see that this fee is quite reasonable. Especially when you take into account the fact that you can become debt free in 24-48 months with our debt consolidation program.
Without a proven track record of success, we simply wouldn't be in business. In fact, National Debt Relief only enrolls clients who have a strong chance of benefiting from our debt settlement program. We predicate our reputation on our ability to help consumers move past their debts and begin rebuilding their financial lives - not on our ability to enroll as many clients as possible or charge unnecessary fees.
Make sure you are working with an NFCC-member nonprofit credit counseling agency like InCharge Debt Solutions. Nonprofit credit counselors provide impartial financial advice that has your best interest in mind. A nonprofit debt management program will have low fees and work to secure interest rate reductions on your credit card debt, so that you are able to pay off your debt by making consistent affordable payments.
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