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Many Americans are experiencing the financial burden of unsecured loan and credit card debt, but more and more are finding debt relief through debt resolution. Debt resolution, also known as debt negotiation, is a legal process whereby a consumer retains the services of an attorney or law firm to represent them in debt negotiation or settlement services with that individual’s creditors. This flexible debt relief option leverages the client’s income, existing debt, and financial hardships to assist the client to get out of debt in the shortest amount of time, and for the least amount of money without filing for bankruptcy. Debt resolution is an ambitious approach to debt reduction for clients experiencing the strains of too much debt and considering bankruptcy as an option.
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Debt resolution can provide immediate cash constraint relief and allows the client to save money over the long term by settling the debts for less than the full amount which always includes late charges, over limit fees, and excessive interest charges.
Hypothetical Example of a Debt Negotiation Services:
PCADebtSolutions.com can help clients negotiate down credit card debt and resolve financial problems that result from hardships such as unemployment, medical problems, a death in the family, or a divorce. If you have more than $10,000 in total unsecured debt (each account must be at least $750) (credit card debt, medical debt, or personal loans) and are having trouble keeping up with your minimum payments, you may qualify for our debt resolution program.
By retaining the services of PCADebtSolutions.com, our attorneys, as well as our professional debt negotiators, will facilitate debt negotiation. Our clients receive proper legal protection against the often predatory practices of debt collectors.
Why creditors settle:
Creditors are usually willing to settle the balance of debt owed if the debtor is experiencing extreme financial hardship and is seriously considering filing for bankruptcy. If the debtor chooses to file for bankruptcy, then usually the creditor would receive a severely reduced amount of the balanced owed or possibly nothing – determined by the BK Trustee – therefore, it is in the creditors benefit to find an agreement that works for both parties.
As a concept, lenders have been practicing debt resolution for thousands of years. However, the business of debt resolution became prominent in America during the late 1980s and early 1990s when bank deregulation loosened lending practices, but was followed by an economic recession which placed consumers in financial hardships.
With consumer debts increasing, banks established debt resolution departments staffed with personnel authorized to negotiate with defaulted cardholders to reduce the outstanding balances in hopes to recover funds that would otherwise be lost if the cardholder filed for Chapter 7 bankruptcy. Typical settlements ranged between 25% and 65% of the outstanding balance.
Alongside the unprecedented spike in personal debt loads, there was another rather significant and extremely under reported change – the 2005 passage of legislation that dramatically worsened the chances for average Americans to claim Chapter 7 bankruptcy protection. As things stand, anyone filing for bankruptcy that fails to meet the Internal Revenue Service regulated means test would be forced into the Chapter 13 debt restructuring plan. Essentially, Chapter 13 bankruptcy tells borrowers that they must pay back some or all of their debts to unsecured lenders. Repayments under Chapter 13 can range from 1% to 100% of the amounts owed to unsecured creditors, based on the debtor’s ability to pay. Repayment periods range from 3-5 years under court mandated budgets that follow IRS guidelines, and the penalties for failure to pay are more severe.
What our Program entails:
Our debt resolution program involves negotiating an agreement between you and your creditors to settle your debts for less than what you owe. You maintain control of your finances throughout the debt resolution and debt negotiation process and we will be here to answer your questions along the way. Our debt help specialists will work with your creditors to settle your debt for the smallest amount possible and restore your peace of mind by:
Our program benefits everyone involved:
Understanding Your Debt Reduction Options:
Debt resolution is one of the fastest growing debt relief options because it works. With our debt resolution services, we work to be able to bring you debt relief in as little as 2 to 3 years. Compare that to debt consolidation or debt counseling which can only reduce your interest rate usually on a five to nine year plan. Alternatively, if you continue to pay only the monthly minimum on your credit card debt, you could double your debt in finance charges and in some cases expect to be in debt for up to 30 years!
Debt resolution is a completely legal, logical, and ethical way to get out of debt. Once you are in the “debt spiral” it becomes more and more difficult to get out. Eventually your minimum monthly payments will likely be going almost entirely towards interest. At this rate, you would finally pay the account off in about 30 years having spent ten times or more what you initially borrowed. We understand your predicament and the credit card companies have been counting on and profiting from it for years. Debt resolution can end the 30 year cycle and potentially cut it down to 3 years or less.
There are some drawbacks though. The IRS considers a forgiven debt as taxable income, so at the end of the year, they will expect you to pay taxes on the settlement. The IRS, however, has a form (#982) available for special hardships. Debt resolution can also be harmful to a debtor’s credit-rating while they are in the process of settling their debts because creditors won’t agree to settle on an account that remains current. The debtor’s credit report will reflect that they are behind in payments until the debts are settled.
There is life after debt resolution:
After the debt is settled, the creditor will send a letter stating that you have fulfilled your debt obligation and will report to the credit bureaus that the debt has been “Settled for less than full amount”, “Paid” or “Settled”.
With Debt resolution, you get to move on with your life and rebuild. You don’t have the stress associated with rude collectors threatening you. You’ll immediately have peace of mind to start living vs. worrying and losing sleep! PCADebtSolutions.com’s debt resolution program can help eliminate your credit card debt faster and for less money. You can explore whether debt resolution is the right debt relief option for you with no obligation.
If you are ready to pursue the debt relief you deserve and learn more about what debt resolution can do for you, call 1-866-PCA-9651 and a PCADebtSolutions.com debt consultant will contact you to review your situation, explain our debt resolution program and answer your questions. The consultation is free and there is no obligation. You may be able to improve your monthly cash flow and negotiate down your credit card debt once and for all through debt resolution. Call today for more information!
5 Ways to pay off debt
There are 5 ways to get rid of debt and lead a stress-free life. But what’s important is that you choose the one that works for you.
1. Interest rate arbitration: This is where you choose an independent third party to negotiate low interest rates with your creditors. So, you can consolidate multiple bills with one low monthly payment. This is also known as loan consolidation.
The benefits are:
2. Debt management: This is where you work with a debt solutions company to help you pay off your debts and create a budget.
The benefits are:
3. Debt settlement: This is where you have a settlement company/law firm working with your creditors to lower your payoff amount by 40-60%. With settlement, you have 2 major benefits:
4. Chapter 13 bankruptcy: Chapter 13 is a court monitored debt repayment plan.
The benefits are:
5. Chapter 7 bankruptcy: This is where you hand over your assets to a court-appointed trustee who sells them off and uses the sale proceeds to pay off your debts. With Chapter 7 bankruptcy, you get the following benefits:
However, your credit score takes a hit and it’ll take quite a few years till you actually rebuild your score.