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Debt Settlement By State

Debt Settlement By State

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Published by Michelle Albers
How To Settle Your Debt For A Fraction Of What You Owe.
Click Here To Find Out How:
How To Settle Your Debt For A Fraction Of What You Owe.
Click Here To Find Out How:

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Published by: Michelle Albers on Feb 21, 2012
Copyright:Attribution Non-commercial


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 ==== ====How To Settle Your Debt For A Fraction Of What You Owe. Click Here To Find Out How:http://www.dynamicsolutionsintl.com/malbers ==== ====Working with consumers in Arizona, both directly in the greater Phoenix area and with borrowersfrom around the state, your authors have had occasion to meet a great many families whose debtproblems have grown to such a degree that they can no longer justifiably continue to pretend thatthe bills are within their control. These are good and honest men and women who desire nothingmore than to satisfy past obligations through traditional measures. They're not looking for someend around their responsibilities. Nevertheless, for one reason or another, their debt balanceshave grown so large - or, given what's happening to the national economy, their incomes havefallen so low - that external assistance is necessary. For many ordinary Arizonans who've neverpreviously considered any form of debt relief, Chapter 7 bankruptcy declaration might seem likethe natural next step, but recent congressional modifications in the United States bankruptcy codehave made that option less than palatable for most debtors. As happens, there are a number ofnew alternatives specifically designed to aid consumers that have fallen behind in their bills but donot want to permanently ruin their credit rating. Among Arizona borrowers, the debt settlementapproach above all others has shown itself to be uniquely beneficial to those debtors who willqualify for the program. In this article, we'd like to outline the fundamental principles behind debtsettlement and similar debt relief strategies to better prepare consumers for their struggles againstoutsized financial obligations. As long as an Arizona consumer's debts are not attached to a form of collateral - like homemortgages or automobile loans - there should be a potential for settlement. With secured loans,though payment schedules can sometimes be changed and elongated to fit the borrowers' needs,the settlement company won't have the proper leverage for negotiation seeing as how the lenderhas every right (and, theoretically, a financial advantage) in the state of Arizona to take the stepsnecessary to force repossessions or foreclosures. Now, if overdue bills had been left to festersufficiently long that the creditor did take back the collateral through foreclosure or repo as allowedunder Arizona law, the remaining funds owed would be considered unsecured and therefore opento the debt settlement method. With unsecured loans, the legal actions required to recoup lossesare far more difficult and more expensive to undertake. In order for lenders to successfully attachtheir clients' bank accounts or garnish their wages, they must jump through all number of legalhoops with the expense of attorney fees probably more than the actual balances they are owed.The difficulties involved with collection as well as the lingering threat of Chapter 7 bankruptcyelimination allows debt settlement specialists in Arizona to negotiate the overall reduction of thevarious balances from lenders otherwise concerned that they may never recoup their losses. However, just because a loan does not have collateral attached, you should not assume that thedebt will automatically be available for settlement. Arizona medical bills, for example, or debtsresulting from hospitalization - even though they are unsecured - tend to have incredibly lowinterest rates and payment schedules explicitly designed to not overly distress former and currentpatients. For this reason, there's generally no need to confront the lenders (the hospital itself,
generally) about debt settlement. In a different way, student loans - though, by and large, they alsofeature lower rates and tend to be responsive to borrower difficulties - are avoided in the debtsettlement process because, for more than a decade now, they are unable to be touched during aChapter 7 debt elimination bankruptcy. Essentially, with very few exceptions, debt settlement inArizona only touches upon the credit card debts and department store accounts (and thoserevolving unsecured debts that have already gone to bill collections) which the negotiators canclaim to be unreasonably harsh or potentially subject to bankruptcy proceedings. Because of this,tax liens and governmentally issued (whether federal or from Arizona) obligations such as childsupport or alimony or fines levied from criminal trials should also be ignored when consideringdebt settlement as a potential solution, and past due amounts beholden to utility companies arealso unlikely to be settled. Even within the realm of unsecured consumer debts, there's noguarantee of successful negotiations. Some lenders yet refuse to find any middle ground when itcomes to conceding old debt balances, after all - though most of them will, if correctly approached,readily trade some reduction of moneys owed in exchange for the reassurance that they willeventually be paid some part of the original accounts and won't be forced to send the problemclients to external collection agencies. Following that mindset, much as it may seem counter intuitive (and go against a lifetime's attemptstoward responsible borrowing), creditors are far more likely to enter into successful negotiationsfor debt settlement when the borrowers miss a payment or two prior to the debt settlementattempt. Sad as it may seem, if your account is current and you've shown yourself to be a goodcredit risk, the lenders may think any threats of delinquency or bankruptcy could be empty. It'smore than reasonable to have moral qualms in this instance, nobody wants to think of themselvesas a scofflaw or welcher, but, unfortunately, many of the credit card companies have specificguidelines set in stone that their representatives have no power to go beyond. Certainly, it wouldseem to make more sense for the settlement negotiator to inform the lender reps of the debtor'sdemonstrable inability to satisfy obligations as currently set and discuss terms from that pointwithout the charade of missed payments (and subsequent black mark on credit reports andaccompanying drop in FICO scores). This shouldn't certainly be understood as an instruction tohalt all bill payments. As with so many elements of the debt settlement negotiation process, theactual practicalities of your situation will best be determined by the professional counselor withwhom you have chosen to work, and, for many borrowers, the potential negative consequenceswould outweigh the possible leverage gained by such a maneuver. Before making any decisionthat could affect your credit, be sure and consult with a specialist (ideally, more than one) familiarwith Arizona financial statutes who has had the chance to examine your credit report andinvestigate the options available for you. Once again, we are going to assume that you never intended to get so far behind in your bills thatyou'd ever need look into debt settlement strategies. It's the nature of Arizonans and the spirit theAmerican west. We always assume that a solution to problems are just around the corner, but,given the perilous state of the United States economy and dim prospects for recovery in the nearfuture, it's time to face facts. Odds are, despite the foolish purchase almost all of us make onetime or another, there was probably some heretofore unexpected calamity behind the depths ofyour debt problem, and, whether the trouble lies in familial disputes (a startling percentage ofArizona Chapter 7 bankruptcies and debt settlement programs are started at least partially as aresult of divorce) or sudden hospitalization or lingering unemployment, solutions ARE available foreven the most desperate households. As we have written, every debt scenario requires a slightlydifferent tactic, and, while we would hesitate to say whether or not any one approach is right or
wrong for a consumer without studying their finances and overall household plans - even if, as youmay have noticed, we certainly urge every Arizona borrower to at least consider the debtsettlement strategy - there are some programs we would have to warn against. Unfortunately, the most ineffective and potentially ruinous alternative to debt settlement has, forvarious reasons, become the most popular for Arizonans avoiding bankruptcy and attempting todeal with overwhelming debt loads. A slippery slope of buzz borne upon ridiculously prominentadvertisements has landed Consumer Credit Counseling a thoroughly undeserved prominenceand reputation for aiding borrowers when the actual realities of Consumer Credit Counseling tell afar different story. Talk with someone who's made the mistake of trusting a Consumer CreditCounseling company with their household's financial security, and they'll bitterly describe themistakes that were made. To be fair, the CCC programs almost always do lower interest rates, atleast temporarily, but that comes at a great cost to the borrowers both in theoretical (credit reportsand FICO scores shall be savaged once you enter such a program) and practical terms (read thefine print of the Consumer Credit Counseling agreement; many of the firms charge thousands ofdollars for their consolidation service plus absolutely purposeless monthly and annualadministrative expenses). Even given all of the money added on to the loan balances, borrowerswill also probably see their loan payments go down because the nature of Consumer CreditCounseling consolidations often allow such overly extended terms that the monthly minimums arereduced. Of course, lowering the money borrowers are supposed to pay out every month meansthat even less of the principal will be touched, and, through the steady accumulation of compoundinterest, they can end up owing even more over the course of the consolidation than if they hadstuck with the original credit card accounts regardless of their rates. Bad as that may be - and families can find themselves crippled by the resulting debt loads fordecades without hope of legal recourse - many of the Consumer Credit Counseling companiesforce through household budgets and payment schedules that are neither realistic nor effective.Unlike the debt settlement companies, whose most respectable professionals are certified by anational board which ensures a level of training and experience and responsiveness, ConsumerCredit Counseling specialists have no singular responsibility to their clients, and, as it's becomingincreasingly known, they derive most of their income from the credit card companies who paythrough the nose to ensure that borrowers refrain from attempting a successful form of debt relief.While debt settlement companies should bend over backwards to calculate a budget for theirclients which will take into account potential bumps in the road and, even as they try to eliminatedebts as quickly as possible, design a payment schedule comfortable for the family's actual day today needs whatever should happen, the Consumer Credit Counseling assembly lines merely wishto draw as much money as possible without irritating their lender overlords. The grand majority ofConsumer Credit Counseling firms in Arizona are NOT non profit organizations nor governmentallyauthorized whatever their commercials or promotional materials may imply. Indeed, it's best to think of the Consumer Credit Counseling professionals as more similar tosalesmen who rarely have the customer's best interests at heart. If you remain curious, wesuppose it wouldn't hurt to talk to one of the CCC companies, but be aware of their motive and donot forget to ask pointed questions about the consequences of their approach (and get a writtenestimate of their total costs) before allowing yourself to be cowed by their well practiced pitches.Ask if they have any financial involvement with the credit card companies they are supposed to beworking against. The National Foundation for Credit Counselors admits that between ten andtwenty percent of the money paid to Consumer Credit Counseling firms themselves as a de facto

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