I LOVE LOVE LOVE this article – I’m planning to share it with my husband tonight. Your approach and honestly in the article is so freshing since I myself was in a crazy amount of debt as of last year ($22K at the peak). Essentially, I followed all the steps you mentioned (took a hard look at my total debt, got a higher ($7K more) paying job, transferred balances to a 0% card and paid off a load of consumer debt. I’m scheduled to pay off all my consumer debt by April 2011.

If you cash in your IRA early, you will not only pay taxes on it (unless it is a ROTH), you also pay a 10% early withdrawal penalty. That means that money is not going to go very far. Before you use your retirement money to pay off consumer debt, I would suggest you at least talk with a reputable credit counseling agency to see if there’s a way to get out of debt without using this money that you will no doubt need when you do retire.

Tip: Before you do business with any debt settlement company, contact your state Attorney General and local consumer protection agency . They can tell you if any consumer complaints are on file about the firm you're considering doing business with. Some states require debt settlement companies to be licensed. You can check with your state regulator or ask your state Attorney General if the company is required to be licensed to work in your state and, if so, whether it is. You can also view the Federal Trade Commission's page on "Coping with Debt " for more information.
Reduce interest rates on credit cards and other debts. You can save money by reducing the interest rates you pay on your credit cards, loans and other debts. Depending on exactly your current terms and how much you owe, you can save hundreds or thousands of dollars in total interest expenses. It is generally free to try this. There is a 50-60% success rate of receiving a lower interest rate when you try on your own to gain better control over your financial obligations. Learn more on reducing credit card interest rates.

Warning: Debt settlement may well leave you deeper in debt than you were when you started. Most debt settlement companies will ask you to stop paying your debts in order to get creditors to negotiate and to collect the funds required for a settlement. This can have a negative effect on your credit score and may result in the creditor or debt collector filing a lawsuit while you are collecting settlement funds. And if you stop making payments on a credit card, late fees and interest will be added to the debt each month. If you exceed your credit limit, additional fees and charges may apply. This can cause your original debt to increase.


And you’re not alone. The average family who carries a debt has more than $16,000 in credit card debt. We have free advice and offer professional solutions, so you can find the best way to pay off or settle your credit card debt. Available programs include debt management, debt settlement, debt consolidation loans and even do-it-yourself solutions where you can learn the best way to pay off your debt.
How Long Will It Take To Get Out Of Debt? It depends on how quickly you can build up your settlement funds and save for the settlement offers. The program length varies between 24-48 months, the faster you can save, the quicker you can get out of debt. If you only make the minimum payments on your credit cards, you could be in debt for the next 10-20 years and pay back 2x, 3x, or even 4 times as much as you originally borrowed.

The good news is that, by choosing a nonprofit credit counseling agency, you can end up with an affordable option that will leave you better off. Despite the monthly fees these plans charge, debt management can help you save thousands of dollars through reduced interest rates and creditor concessions. Plus, you get valuable advice and financial guidance all along the way when you choose to work with a nonprofit credit counseling agency versus a for-profit agency who is “not directed to provide coaching or advice,” said McClary.
Credit card debt is not the only type of debt that you can include in a debt management program. You can consolidate almost any type of unsecured debt, not including student loans. This includes debt consolidation loans, unpaid medical bills that have gone to collections, and even some payday loans. If you’re struggling with student loans, then you will need a specialized type of debt relief.
A Credit Counseling Session is an overview of your total financial situation, which will uncover ways to provide you with debt relief. It can be done on the telephone, online utilizing our industry-leading tool, or in-person. A certified credit counselor will review all of your income, expenses, and debts. Your counselor will then make recommendations to help you get back on track financially (one of which may be a debt management program). For additional information about our credit counseling program, click here.
If your credit card interest rates are so high it feels almost impossible to make headway on your balances, it’s worth calling your card issuer to negotiate. Believe it or not, asking for lower interest rates is actually quite commonplace. And if you have a solid history of paying your bills on time, there’s a good possibility of getting a lower interest rate.
As a debt junkie for almost ten years, I ran up credit card after credit card living like my salary was about four times its actual size. Stupid things I bought on credit included flying lessons, weekends in Las Vegas, and a brand new pickup truck. Hey, I never said I wasn’t having fun. (Remember, I’m on the other side of 25 now, so I started college pre-recession… during the dot-com boom. Back then, I actually thought I could graduate with a sociology major and find a $75k a year job—because I knew people who did!)
Start paying into your settlement fund. National Debt Relief asks you to make monthly payments into an escrow account that it can eventually use to pay your debt settlement costs. This monthly payment is typically lower than monthly payments on your debt. While you can stop making payments on your debt if it’s unaffordable, you’ll end up paying more in the end.
This is a very important first step before trying to start retiring debt. Having an emergency fund will help keep you from getting deeper into debt when unexpected events happen. If, for example, you have $1,000 in cash set aside and your car or house needs a sudden repair, you do not have to put that repair on a credit card. Ideally, you will want to get to the point where you have an emergency fund worth three to six months of expenses so you can support yourself temporarily if you suddenly lose your job, but the $1,000 is a great start.
A DMP is a payment plan that helps you repay your debts. By using a non-profit credit counseling agency to pay down and off your debt, creditors may also offer to reduce or waive fees, finance charges, or interest rates to ensure success on the plan. Simply, under the plan, you deposit a consolidated payment with us each month, which we in turn disburse to all of your creditors. We also handle calls from your creditors directly. The vast majority of our payment processing is electronic, so funds are transferred directly to the creditors without delay.
Always keep in mind when dealing with services like debt relief that many customer view it as a magic pill to solve all their debt problems and make them financially stable, which is not the case. There are no guarantees when it comes to debt relief. These companies try to work with customers to lower their debt burden, but they aren’t going to work miracles.

I have been debating about Freedom Debt Relief, they seem like very good people but my question comes from that I am worried about my Credit Score. Here goes I have about 7-8,000 in credit card debt eventhough its not that much I have been laid off and have been looking for work for the past year trying to have been using my savings to pay off my credit. I am finding myself not struggling to do this longer but am in a delima that I have to get a place in the future and will not qualify to Rent. How long does it stay on your credit do agencies like Lexington Law Firm are good option in rebuilding it faster?
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2 years ago my husband & I cut up all of our credit cards and contacted each Credit Card company to come up with a reasonable monthly pay plan and close out the account. We have been doing this fine ever since as it comes directly out of our checking account. However, we have recently come into enough money to settle all of our debt for probably 50%-75% of the amount originally owed. Because we are already in “payment mode” with these companies, it cannot hurt our credit anymore to go with a settlement offer, correct? Our goal is to pay off as many as possible with the money we have.
Starting your own business has never been easier! Do you have a knack for making things? Sell your products online! Are you an animal lover? Take up dog walking or pet sitting. Do you have a good eye and a nice camera? Start taking on clients for photo sessions. Christy Wright’s Business Boutique is a great resource to walk you through the process!
Whenever you are dealing with a company that deals with debt or even money, people tend to have strong opinions. When you are dealing with risky procedures like debt settlement and bankruptcy, those opinions get even stronger. Generally, National Debt Relief reviews are good among debt relief services and it is one of the most trusted of the debt relief program services out there. On the flip side, there are a lot of people out there who feel scammed by National Debt Relief. Part of that is people who didn’t understand the risks involved. Part of it is people who didn’t get the results they were looking for. And part of it is probably National Debt Relief’s fault.
Debt settlement: This is what National Debt Relief is best at. National Debt Relief has been doing debt settlements for years and knows the ins and outs of the laws around debt settlements. While debt settlement is a good option for people who are drowning in debt, it does have some downsides, including wrecking your credit score. Be sure to know the risks surrounding debt settlement before you start the process. National Debt Relief has all the information you need to know about debt settlement on its website.
Tip: If you are having trouble making payments on your debts, a credit counselor may be able to help you with advice or by organizing a “debt management plan” for all your debts. Typically, under a debt management plan you make a single payment to the credit counseling organization each month or pay period and the credit counseling organization makes monthly payments to each of your creditors. Under debt management plans, credit counselors usually do not negotiate any reduction in the amounts you owe–instead, they can lower your overall monthly payment. They do so by negotiating extensions of the periods over which you can repay a loan and by asking creditors to lower the interest rates  and waive certain fees.
I have documentation that states when my refund of $2439.40 will come to my bank which is 9/13/2018. As of today I have not received my refund and the company is holding it so that I am charged more fees. Please help, I have already paid late fees and penalties because of this. I am speaking with an attorney now so that I can recover damages caused by the not returning my funds in the mannar promised.

I started today while reading this article by putting 5 dollars into my savings account. I feel like I’m drowning in debt and living from emergency to emergency. I know they key for me to getting out is establishing savings…and I’ve procrastinated. No more! Today I started, next pay check I’ll put in 50, next 100, maybe I’ll get to 200 in a few months. I want to see $2000 in there so I can afford things like car maintenance and medical co-pays!

Find out how your personal information will be protected. When you enter a debt management program, you have to share some of your most sensitive financial information with the counseling agency. You'd better make sure they won't sell it to others or disclose the information to anyone except the creditors you've agreed to include in the plan. Get a written privacy policy from them, and ask what safeguards they have in place to protect your information.
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Call a center in Texas near you to learn about state of Texas and federal government mortgage program. There is free housing counseling offered at the same time as enrollment into debt management plans. The bottom line is that people who need help paying their bills can contact a non-profit credit counseling agency in Texas for low cost, or sometimes even free advice. The phone numbers to call to apply or enroll for assistance are listed below.
This only happens in the first month of the program. After that, your payments are made on time according to the new schedule. As a result, most people see their scores improve because they have low credit scores starting out. That one month of “missed” payments is usually a drop in the bucket compared to all the other payments that might have been late or missed while you were struggling.
Credit counseling works because it provides people with the time and tools to focus on their financial situation. The nonprofit version of this service provides a holistic, high-level view of an individual or family’s debts, assets, income and expenses before recommending a debt relief strategy. These services work because the solutions provided are personalized and specific, and because counselors are well-trained and non-biased.
However, carrying a large amount of debt that is difficult to repay also negatively impacts your credit score. For example, debt from student loans can accumulate and increase over many years of nonpayment. So, you have two choices in such desperate situations: pay off your debt from student loans slowly, missing minimum payments and taking damage to your credit score or hire a debt relief company, settling the debt from your student loans faster while taking a hit to your credit score.
Find out how your personal information will be protected. When you enter a debt management program, you have to share some of your most sensitive financial information with the counseling agency. You'd better make sure they won't sell it to others or disclose the information to anyone except the creditors you've agreed to include in the plan. Get a written privacy policy from them, and ask what safeguards they have in place to protect your information.
If debt management doesn’t seem quite right for your situation, there are several other debt relief options. I start with the least drastic option, credit counseling, and end with what most may agree is the most drastic: bankruptcy. Of course, all of these methods have their own pros and cons, and only you can decide whether they are better or worse for your situation.
Since debt management plans are individually tailored to each consumer, one plan can be wildly different than the next. McClary said your plan can vary depending on how much debt you owe, your current interest rates and payments and how your interest rates and fees are negotiated down. This is a huge benefit for consumers since debt management plans come with specific advice instead of blanket solutions that may or may not work.
If you enroll with National Debt Relief they state that you can expect to save potentially 30% on average and that does not include paying taxes on debt forgiven over $600.  Additionally what they don’t mention is that to obtain a favorable settlement you will need to stop making payments on your debts which will increase you total debt in the short term, hurt your credit, and open you up to potential lawsuits and debt collection phone calls due to non payment.
Negative reviews: Common complaints include unprofessional behavior, being passed off between employees and being treated great during enrollment then the quality dropping once the process actually starts. The company provides an online dashboard to help clients keep track of their debt management program, but customers have still said they feel disconnected from the debt settlement process. Average user score is 2.4/10.
We write about a range of topics like reducing debt, finding student loans, getting the best strategy to pay off student loans, understanding credit cards and planning for retirement. In addition to our comprehensive site, we have relationships with a variety of trustworthy debt service providers who can ensure that readers’ financial needs are met.

Credit counseling is done largely over-the-phone or online, but can be done in-person at a home or office. Counselors conduct 30–40 minute interviews to gather information about your financial situation. They will ask questions about income, expenses, budgets and assets. It is best to have this information documented and available when you begin the process.
National Debt Relief is a debt settlement service. For a fee, it will negotiate with your creditors to reduce the amount of debt you owe. It’s among the most recognized debt settlement services in the country, with high rankings from the BBB and Trustpilot reviewers. It’s also accredited with top industry associations, including the American Fair Credit Council (AFCC).
Credit counseling provides guidance and support on consumer credit, money and debt management, and budgeting. The objective of most credit counseling is to help a debtor avoid bankruptcy and to provide primary financial education on managing money. Borrowers with an understanding of money management are assets for lenders as well. Many counseling services also negotiate with creditors on behalf of the borrower to reduce interest rates and late fees.
Credit Limitation: This option only works if you have good credit; excellent credit is better. Balance transfer credit cards offer 0% APR on balance transfers when you open the account. An excellent credit score means you qualify for the longest 0% APR introductory period possible. Some cards have promotions that run up to 18 or 24 months. That gives you up to two years to pay off your debt interest-free.
Many times, a credit counselor can offer insights into your financial situation that you may not see on your own. They may see obvious ways you can cut your spending that you may have overlooked, for example. Their extensive knowledge of debt relief options also makes them ideal mentors for consumers who need professional help when it comes to assessing their debts and figuring out a plan that will work.
After that first initial call with him I was contacted by a company called Clear One Advantage they were very pleasant in the beginning took all of my information and began debiting my account on a monthly basis in July of 2017 by September of 2017 not one of the accounts have been settled my phone was ringing off the hook my creditors emailing me as well, telling me that they’re willing to work with me, I just needed to contact them and they would see what they could do.
As a debt junkie for almost ten years, I ran up credit card after credit card living like my salary was about four times its actual size. Stupid things I bought on credit included flying lessons, weekends in Las Vegas, and a brand new pickup truck. Hey, I never said I wasn’t having fun. (Remember, I’m on the other side of 25 now, so I started college pre-recession… during the dot-com boom. Back then, I actually thought I could graduate with a sociology major and find a $75k a year job—because I knew people who did!)
Not all consumers are able to complete debt relief programs for various reasons, including their ability to save sufficient funds. The use of debt resolution services could negatively impact your credit and may result in legal action on the part of creditors or collectors for unpaid balances. Consumers enrolled in debt consolidation programs who fail to adhere to the terms of their debt management plan (DMP) may forfeit the benefits of debt relief and revert to the terms of their original creditor agreements. Read and understand all program materials prior to enrollment. Please contact a debt relief specialist for complete program details.
High-interest credit card debt: Credit card debt is revolving debt; you charge as much as you want up to your credit limits and make monthly payments. The average interest rate on credit cards was close to 17% as of July 2018. Because credit card debt provides no benefit and rates are substantially higher than investments typically produce, aggressive early payoff is smart. 
One of the most effective ways to budget to eliminate debt is using the cash envelope system. This is where you place a predetermined amount of money in different envelopes labeled with different spending categories. Anytime you spend within a category, the money must come from the corresponding envelope. When the money is out, it’s all out, and you can’t overspend.
When it comes to paying off credit card debt, many consumers take the path of least resistance: the so-called "minimum payment plan." By law, credit card issuers are required to set a minimum monthly payment amount for each cardholder. These payments are calculated on the basis of the cardholder's total balance, interest rate and certain other factors.

Guy who signed me up was professional BUT dealing with the company afterwards was a complete run-around. Transferred 5 times and not given an honest answer. Had to call back and confirm my exit from the program. Then asked personal questions in a resell attempt. Mailing address given to submit cancellation request to is NOT a valid mailing address. Percentage higher than advertised – 23%. Customer service transfers you immediately somewhere else – couldn’t even finish my sentence. Very shady.

With debt settlement, your attorney will ask you to stop making payments to your creditors and instead, contribute money on a regular basis to a fund. When the fund reaches a certain level, the attorney will approach creditors and seek an agreement to settle for that amount. If the creditor accepts the agreement, the debt is considered settled. Read more about debt management vs. debt settlement.
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