You may hold several credit cards and have dues on these cards. If you are delinquent on making credit card bills, you receive harassing collection calls from your creditors or the collection agency. In order to avoid this harassment and more importantly to get rid of your unsecured debts, you can enroll into credit card consolidation program. In this popular financial program, arrangements are made in such a way that you become free of debts my making single monthly payment for a certain period of time. In other words, through this financial arrangement, all your unsecured debts are clubbed into a single big debt and you have to make single monthly payment to your consolidation company so as to get rid of all your unsecured debts. If you follow this program then you would not have to make multiple payments to all your creditors. Moreover, you do not receive harassing collection calls anymore. Importantly, your monthly payment amount is also lowered down. This eases the pressure of paying the debts.

One important characteristic of credit card consolidation program is that it does not affect your credit score at all. Instead, if you can follow this program properly, your credit score actually receives a boost. Better credit score, in turn, raises your chances of obtaining a new credit with favorable terms and conditions. Again, credit card consolidation program is considered as a far better option than filing for bankruptcy. This is so because, if you file for bankruptcy, your credit score is very badly hit. Moreover, that negative impact remains on your credit report for a considerable period of time. Your creditors are also worse off, in case you file for bankruptcy. That is why it makes good sense to opt for credit card consolidation.

In this program, first of all, you have to select a consolidation company. While selecting that company however you must be very serious so that the company is a genuine one. You must check whether or not the company has necessary license or accreditation. You should also check its status with Better Business Bureau (BBB). The debt consolidation company then decides your fixed monthly payment amount. By paying that amount for a certain period of time, you finally become free of debts.

Thanks to Sidney Terrell for this informative article. Sidney loves to write financial articles and she is a contributory writer associated with Oak View Law Group and has written several articles on debt consolidation, debt settlement, bill consolidation and get out of debt for various financial websites. She holds her expertise in the Debt industry and has made significant contribution through her various articles, like this one on consolidate to get rid of credit card debts.

But too many people live on the edge, and when any little extra expense comes along they are forced to let big bills pile up, or make the minimum payment on big credit card bills, creating a debt mountain that can turn into a personal debt landslide.

The fact is that almost 70% of Americans live from paycheck to paycheck. They have no savings for their kids’ college, their retirement, medical bills, or whatever that proverbial rainy day will bring. That scenario is outright frightening, as many people do not have a clue how they would survive if they lost their job or an unforeseen big expenditure came along. For these people these solutions to get out of debt may be all they need:

• Making a budget.
• Cutting back on spending.
• Making more money.
• An overall plan to get out of debt.
• Good old fashioned discipline to do all the above.

But what if you are the victim of what I call The Double Whammy? That is when you have lost your job or have had to take one with drastically reduced hours or pay, combined with an unexpected expenditure. That’s a combination that will lead to you treading in dangerous financial water.

Letting the bills mount up and hoping for things to turn around is not the answer. Because unpaid debt will wear you down. The constant aggravating stress of living with the burden of these kind of unpaid bills can wreck the strongest of individuals and ruin marriages.

But here is a secret: no matter how bad the circumstances, almost any one can get out of debt. No matter how large it may be, your debt can be eliminated if you tackle the process with some intelligence, some ingenuity, and most of all, some help. But it may take drastic measures.

For instance you might need to consider debt consolidation. This is a way of paying out a lot of small loans or credit card debts with one large loan. It can work out cheaper per month, especially if your debts are mainly on high interest store accounts or credit cards. It can also be very good for people who have problems managing money and keeping track of all their debts.

You might be able to renegotiate your loans. Most loans (including credit card debts) can be renegotiated to give you longer to pay. This will mean smaller monthly payments, and you might be able to negotiate a one time payment holiday if you simply cannot make your payment this month.

Finally there is bankruptcy. Consider this a last resort. Briefly, you have a court declare that you cannot pay your debts and will not be able to do so in the foreseeable future.

In a bankruptcy, your creditors will have to accept whatever they are awarded. Bankruptcy can be voluntary or forced. There are several plans, and some of your assets may be able to be left outside the proceeding. You will need an attorney for this.

Whatever you decide to do, you will need to tackle your debt problem head-on and use one, some, or all of the methods here to get out of debt once and for all.

The Chapter 13 Bankruptcy plan or sometimes referred to as the proposed plan, repayment plan or reorganization plan is the fundamental basis behind a Chapter 13 Bankruptcy. Unlike a chapter 7 bankruptcy, if you are filing bankruptcy under this chapter the intention is to be able to pay your creditors some or all of what you owe them over time. Filing for bankruptcy using this chapter usually gives the debtor a three to five year period in which to make payments to the creditors.

The bankruptcy attorney and debtor, before they proceed to file for bankruptcy, will generally determine what the debtor’s disposable income is. Disposable income is the amount of income the debtor has left over after allocating for his or her living expenses.

This is where bankruptcy questions can arise. The bankruptcy lawyer, trustee and creditors may not agree as to what is considered reasonable living expenses. Even though bankruptcy law provides us with the means test and we have an IRS standard, bankruptcy attorneys, trustees and creditors still may disagree over this issue. Under this chapter of the bankruptcy law, the debtor needs to apply all or almost all of his or disposable income to the creditors according to the bankruptcy proposed plan.   

Similar to a chapter 7 bankruptcy, when filing for bankruptcy under this chapter, the bankruptcy law classifies creditors under two sections. There are the secured creditors and the unsecured creditors. As the bankruptcy attorney will explain to the debtor, secured creditors are essentially credit that was collateralized with something such as a mortgage, car loan, boat loan or a recreational vehicle. Bankruptcy unsecured creditors are generally credit cards or personal loans. This classification is important when filing bankruptcy under a chapter 13 because the plan determines how the two groups are paid.

Secured creditors are usually paid in full but not always when you file for bankruptcy under this chapter. The bankruptcy unsecured creditors will receive a pre determined portion but the unsecured creditors must at least receive what they would have if the file for bankruptcy had been by a chapter 7 bankruptcy.

Although filing for bankruptcy under a chapter 13 may seem more complicated or difficult than a chapter 7, your bankruptcy attorney will be able to answer all your bankruptcy questions. With the help of bankruptcy attorneys, your filing bankruptcy by means of a chapter 13 should be a smooth transaction.

Jay King is a owner of BankruptcyIntro.com. We’ve all heard of large companies filing for bankruptcy or “going bankrupt” and most of us would think that particular company must be in trouble.

Article Source:http://www.articlesbase.com/debt-consolidation-articles/chapter-13-bankruptcy-plan-1476761.html

As always, please consult an attorney specializing in Bankruptcy to fully understand your options. This article isn’t legal advice but is only offered as general information on the Chapter 13 Bankruptcy Plan.

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Debt settlement is the simple process through which a borrower and a lender come to a mutual agreement. Usually the borrower gets to pay a reduced balance, which the lender agrees to accept as payment in full.

A borrower can either negotiate directly with creditors or hire a lawyer or  a debt settlement company. And some debt settlement companies are owned and run by attorneys. Since debt settlement is such a complicated affair, it is usually advised not to pursue this matter on your own, but to seek professional help.

On the surface. the typical debt settlement agency might sound like a scam. With advertisements that offer to reduce your debt in half for a fee, anybody who doesn’t understand how credit companies work is liable to think of these agencies as shady organizations that prey on helpless consumers.

But here’s why debt settlement remains a highly viable, perfectly legitimate and legal way to deal with your debt. When you fall behind on your bill payments and mount up huge debt, lenders suddenly become much more interested in salvaging whatever they can rather than see you file for bankruptcy and get nothing.

This is where debt settlement comes into the picture. A professional agency can usually negotiate terms in which the lender agrees to accept a onetime payment – usually between 20 to 75% of the amount owed – and forgive the rest of the money. The lender would then report to the credit bureaus that the debt has been settled, and you, the borrower, can begin your financial life anew.

A good debt settlement agency would be able to help you negotiate favorable terms with the creditor. Moreover, such an agency would have low fees. Debt settlement can be prohibitively expensive affair, with companies charging anything from 15-20% of the amount owed, to 25% of the settlement amount.

These high fees have given this industry an reputation for exploiting unwary consumers. Yet the alternative – hiring an attorney – remains an equally expensive affair. Before you settle on one company, shop around extensively to find someone who may charge you a lower rate or accept payment in installments.

Debt settlement can be a lifesaver for those with huge debt and little financial recourse. Finding the right agency can be a challenge, but if a successful debt settlement is the result, you’ll find it well worth the effort.

A debt consolidation agency will help pull all your debts together. They will also usually negotiate with your creditors to get a lower interest rate, and possibly to remove certain fees from your debt. If you have very high debt that you are unable to pay, a debt consolidation agency may even be able to reduce the amount you will owe.

As part of debt consolidation, you may be asked to take out a loan at a lower interest rate than your current debt. While taking on further debt may sound counterproductive, remember your old payments will be rolled into this one debt. So a carefully selected loan with a lower interest rate can really help in paying off outstanding debts.

Debt consolidation agencies have come in for a bit of a flak in recent years because of the unethical practices of some agencies. Typically, a debt consolidation agency makes money from the creditors. Thus, if you don’t pay back your debt, they make nothing. This has led some agencies to adopt predatory tactics that are designed to extract your money, while pushing you further into debt.

But remember there are hundreds of highly reputable debt consolidation agencies out there. These agencies are genuinely interested in helping you map out a payment plan, will negotiate with creditors for a payment suitable to your pay check, and will generally help guide you our of your debt situation.

See if you can find reviews of the different debt consolidation companies on the internet. Look for reviews from real customers to help you make up your mind about which agency to hire. Debt consolidation be extremely useful in helping you pay off your debts, but only if you take the time to research the right debt consolidation company.

With the help of a debt management plan, the burden of paying off your debt is significantly reduced. Credit counselors can often work out deals between the you and your creditors to reduce fees and/or interest rates, all in the best interest of both parties.

Lately the credit counseling industry has come in for its share of criticism.  Credit counseling agencies collect their fees from your lenders. So unless they get your debt repayments, they do not get paid. As a result credit counseling agencies have been accused of using predatory tactics and working as the collection arm of creditors.

While these claims may be justified to a certain extent, credit counselors can also be a huge help, provided you pick the right credit-counseling agency.

When you start your hunt for a suitable credit counseling agency, you can first go online to look up companies in your city or general area. Compare the services and rates they offer. The internet has made this task easy.

If a particular company has way too many complaints and grievances filed against it online, stay away from it. The BBB (Better Business Bureau) is one of your best friends in researching this.

Also, approach a credit counseling agency with realistic expectations. Credit counselors are not magicians who can wave a magic wand and make your $50,000 debt go away. They can merely negotiate a better interest rate for your debt, or help you cut down on unnecessary fees.

If you have too much “bad debt” (i.e., debt on cash advances, high interest rate credit cards,) it may be difficult to negotiate more favorable terms with those particular creditors.

If your debt is primarily “good” (i.e., mortgage or student loan debt,) you will find many more varied and beneficial options open to you.

Remember that enlisting the help of a credit counseling agency does not make them responsible for your debts. Ultimately you will still have to watch your expenses, take stock of your purchases, and keep up with your negotiated payments.

You can choose to get out of debt alone, or you can take the help of a credit counseling agency. Either way, getting rid of your debt is still entirely your responsibilty, with or without the help of a credit counseling organization.

The key thing a credit counseling agency can do is keep you on the right track and use their clout with your credotirs to get you a workable plan so you can finally get out of debt.

Since independent debt consolidation agencies became mainstream businesses, this area has attracted many scam artists. Whenever something good comes along it seems that there is always a downside. Let’s face it, desperate people often turn to people who turn out to be dishonest crooks who are only looking for the big bucks.

So how do you sniff out a debt consolidation scam? First, know that every letter or advertisement that claims to want to help get out of your debt situation does not.

Let us imagine for a moment that there is a man who has gotten a little to deep into debt. He wants to get out from under his bills, so he seeks help from one of the debt consolidation companies that calls him on the telephone. They tell him that they can get his debt settled for a fraction of what he actually owes.

So our imaginary man decides to work with them and enrolls in the debt consolidation program. According to his debt consolidation company, his creditors agreed to one-third of the price he owes, paid over a six month span.

Our imaginary man makes his payments, starting with a lump sum at the beginning. He thinks everything is fine until he starts getting calls from his credit card companies. They tell him they still want their money. Our man is confused because he’s been making payments to his agency. When he calls the toll-free number for the agency all he gets is an answering machine.

Don’t let this be you. If you need help and are serious about working to lower and eliminate your debt ask these questions of anyone you are thinking of working with on your debt consolidation:

• Tell me about your company and what you can do to help? Any company representative that is not willing to give you thorough information about what they do is a glaring red flag. A company that wants to do honest business won’t mind telling you what you want to know.
• If they imply that they can get information removed from your credit report, slam the door or hang up. It’s a lie.
• Also, anyone that guarantees a debt reduction is out for your money and should be avoided like the plague.
• Ask how much for their services? There will be a charge but not a substantial one. The initial consultation is usually free or a low fee.
• Beware of hidden fees for processing and other things that can be tacked on.
• What are their options for handling debt? Any company that only pushes debt management programs in lieu of credit counseling or payment plans might be up to something. They might be getting kickbacks to push a program. Avoid that!

You can always check with the Better Business Bureau to see if a particular company has been investigated.

Avoid debt consolidation scams. Never believe the hype. Do your homework before signing up with any debt consolidator.

• Are you are in debt and you just don’t know what to do?
• Have you stopped answering your telephone because of all the harrassing calls from creditors?
• Is your debt growing through late fees and over the limit credit card fees?

A credit counseling center will help you with your unique financial picture. Of course when you are in debt, that picture can be a tad bleak and the solution may be out of focus. Getting with a credit counseling center could be just the thing to help you get back on your budget track.

Some facts that will reassure about the people at your credit counseling center:

** They do not judge you on the bad choices you made in the past but instead want to help you to make better choices from now on. Credit counseling centers want to help you change your mindset about your present financial situation once and for all, so that you aren’t sitting in their office again in two or three years.

** A credit counselor must be trained in debt management and credit counseling by an outside organization. Check with the National Foundation for Credit Counseling to see if the company you want to work with is listed.

** Turn to friends and family members for credit counseling center recommendations. If anyone you know has needed help to manage their debts, ask them who they used as a credit counseling center.

**Your can also turn to your local church community for recommendations. There are a number of Christian credit counseling centers if you would prefer to go that route.

** Getting started shouldn’t cost you anything. Your first meeting with a credit counselor at the center is usually free of charge. This is your time to lay out your financial problems and let them tell you what they will be able to help you with.

** Pay attention to your feelings throughout your first meeting. Does what they say make sense? The steps you will have to take will most likely be difficult. So there should certainly be a lot of logical steps for you to follow.

** This person will be helping you deal with a very personal issue. It goes without saying that you need to be able to trust your counselor. This may be the time to trust your gut feeling. If the person seems like a flake or too good to be true, ask for someone else.

** Don’t forget to inquire about the fees for service. Ask if your credit counseling center gives out free budget worksheets and other materials, or if it holds free or low cost classes about getting control of and managing your debts. But if you are needing individual financial advice, you should expect to pay a reasonable fee.

A good honest relationship with your counselor will help you get positive results.  But remember, your counselor can only advise you. If you want to succeed, it is up to you to work hard and do the necessary things their way.

If you work with them, you will find that above all a credit counseling center is there to help you change your wicked spending ways and help you finally get out of debt.

With all this outgo, it is easy to see how a person could end up mired in debt in no time at all.  But there are answers and one of them is a debt consolidation loan.

 A debt consolidation loan doesn’t have to be difficult to get and in fact is easier today than it has ever been. The bottom line is that if a borrower is overextended, creditors really just want their money back and will do just about anything in order to make that happen.

If you still have reasonable income, and have assets you don’t want to lose, a debt consolidation loan may be a good idea. It will consolidate all your monthly bills into one manageable payment and make all those phone calls from your creditors go away.

Many times families find themselves buried in debt due to unforeseen or unavoidable events such as illness, military service, job loss, divorce, or the death of a spouse.

This doesn’t make a person a financial risk, however lenders may avoid loaning money when the situation is totally out of control. The key to getting a debt consolidation loan is to not wait until your financial situation is out of control.

The concept behind a debt consolidation loan is to lower your total monthly debt service by combining all of your paymentys into one loan and one bill. Since a debt consolidation loan pays off all your existing loans it can have an immediate positive impact on your credit score.

If the borrower’s financial condition allows it, a debt consolidation loan may give the borrower a lower interest rate, and if done as a lien against the borrower’s real estate, may be tax deductible as well.

If your credit is outstanding, it may be possible to consolidate your unsecured loans into another unsecured loan. However most of the time collateral will be required.

Making the loan a secured loan allows for a lower interest rate. The lower rate is because the bank or lender can sell the asset a person puts up against the loan in order to make their money back. Most often this is done with a house or some type of real property.

A debt consolidation loan is often a good tool when a person is carrying too much credit card debt. Credit cards most often have a larger interest rate than even an unsecured loan from a bank. Credit card companies justify this by saying that credit cards are akin to a high risk loan however because they are easier to use their risk is carried one step further.

Do your research and determine if a debt consolidation loan might be the right way for you to get out of debt.