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Credit Cards - The Inventor Of Debt Consolidation Companies
Like with everything good comes something so overly abused, that
turns bad. Credit Cards were invented to help others get by
without using cash and being able to purchase goods when you
can't find an ATM machine to get money from.
But, that...
Effectively Managing Your Credit Card Debt
Credit cards can be a plus in emergencies and great to use to
build your credit but when using them gets out of hand you could
find yourself dodging collections agencies and even going to
court to settle your debts. One way to avoid all this...
Is A Debt Consolidation Loan Your Best Option?
For many people the lure of easy credit has taken them into the forbidden zone of debt. Between debt on regular credit cards, shopping store credit cards, home equity lines of credit, mortgages and car payments it's no wonder consumers are finding...
Mortgage Debt Elimination, 7 Things You Must Know!
The prospect of mortgage debt elimination is something that many Americans are dealing with today. If you are concerned about your current debt situation, constantly trying to eliminate debt from your life, you are not alone.
In fact, over...
Online Gambling Causing Credit Card Debt
It is the latest craze at the moment and everyone seems to be enjoying gambling at home with the increase of poker sites on the internet, but its not good news if you are running up debts on your credit card. I don't know about you but it seems that...
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Credit Card Debt Settlement
Have you started receiving credit card debt settlement notices
in the mail? Have you been receiving collection calls? If this
is the case, you have probably been in debt and been dealing
with financial difficulties for quite some time.
Creditors are sometimes willing to settle the account for a
lesser amount if the credit card account is seriously delinquent
or has been written off. This creditor will usually accept the
settled amount in one payment and the payment has to be made
within a short period of time.
Now you may wonder why a creditor would settle for less than
what is owed. Your credit card issuer is trying to reduce their
losses and they have concerns about you paying this debt. Your
credit issuer feels that recovering some of their money is
better than not getting any of it back. Keep in mind that
accepting a settlement may affect your borrowing ability in the
future with this creditor, but it is a better option than
bankruptcy or doing nothing at all.
A creditor will not usually settle on an account that is
current. Normally, the account has to be at least 90 days
delinquent before they will talk settlement and many credit card
companies will wait longer than that. Here are a few things you
should be aware of before agreeing to a settlement.
1. Your settlement payment may not completely satisfy the debt.
There is a possibility that the uncollected portion of the debt
could be turned over to another collection agency for further
collection activity, but this is not the norm.
2. The IRS considers the amount of the debt that has not
been
satisfied as income. Any amount that exceeds $600 will be report
on a 1099, to the IRS, by your creditors. You will be required
to pay taxes on this amount.
3. Know what's on your credit report. If the debt is not on
their at all, it is not recommended that you do anything with
this debt. If it is showing as being "charged off," this is
negative note on your credit report. If you settle, it will be
noted as "settled for a lesser amount" which as also somewhat
negative, but not as bad as doing nothing about it at all.
The best thing to do is to try to deal with the original
creditor. Communicate with them in writing. If they will not
deal with you, contact the collection agency in writing. If at
all possible, try to negotiate a repayment plan on the balance.
If you decide to settle the debt, get the terms of the
settlement in writing to avoid problems on down the road. Once
you have paid the debt, ask for a "release of debt" as proof
that the company has agreed that the debt has been satisfied.
The best thing that you can do for yourself is to examine the
curcumstances that caused your debt to get to this point and to
put a plan in place that will prevent you from ending up there
again.
About the author:
Marjorie Salada is the owner of debtmanagement1.com, a website that contains
information on getting and staying out of debt. If you are
looking for information on debt consolidation, debt settlement,
debt counseling or how to manage credit card debt this site is
an excellent resource.
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