Definitely, the future will look a whole lot better now. That is for certain. The elimination of debt is one thing that you will really enjoy. But before you can wallow in that relief, the work is not yet over.

Before you go out and celebrate, you need to make sure you have in your hands the black and white copy from the creditor that certifies your debt had been written off. Get a written and authenticated copy that certifies your debts had been forgiven and you should no longer be bothered by your creditor for it. Some people receive collection notices even after a debt had been settled. This is the proof that you will show them so they will no longer communicate with you about this particular debt.

Debt settlement also damages your credit history. Since it requires you to miss payments deliberately, your credit score will definitely take a hit. Not only that, even after you have paid off your debts, it will be labeled as “settled” and not paid off. While that is not as damaging as a bankruptcy taint on your credit history, it still sends a message to future lenders that at one point, you had to settle your debts. It shows your credibility as a borrower.

There is nothing that you can do about that but after the settlement, it is a must that you work on your credit score to increase it. Next to bankruptcy, this is the debt relief program that has the most impact on your score. To help increase this rating, you need to keep some accounts open. Of course, this does not include the accounts that you enrolled in a debt settlement program. That will certainly be closed. But if you have other credit accounts, keep them open. Use the open credit card accounts occasionally but make sure that you have the cash on hand to pay for it in full once the billing statement arrives.

If you have current debts that has yet to be settled, like your mortgage, medical bill or student loan, you should try to pay for them regularly. Since you have had a few debts written off through debt settlement, you should be able to finance the remaining with more funds. You may have had to miss payments as you were going through the debt settlement program for the other credits that you owe. Now is the time to get yourself back on track.

It will also help your case to open a savings account. Since your credit score basically shouts how lousy you are with money, it is time to reverse that by proving that you have mended your ways. And what is the best way to show people you are financially capable and responsible now? By building up your savings. When you have a sizable amount on your savings account, your credit score will reflect that as well.

Long-standing debt is a nuisance for both creditor and debtor. It can damage their professional relationship and trust especially when the one who owes the money is not cooperating or communicating at all. Sending out a letter to the debtor is one way to call his attention and this can be done even before the assistance of a collections agency.

Mindful creditors are smart when it comes to letters requiring action and response from their debtors. One good example is a prepared reminder from a credit card company or a service provider clearly stating their intentions of hiring a collections agency if due payments are not forwarded within a specific period. Some creditors give at least thirty days for their delinquent clients to pay off their dues in full; while others may have a leeway of up to ninety days.

In a perfect word, no one wants to hire a collections agency to do the cold calling and drafting of debt collection letters. But these agencies can also be the last resort if all attempts to communicate with your debtor fail. And of course, a professional collections company will abide by the guidelines that protect customers – ensuring no one is abused or taken advantage during the process.

For business owners and creditors, it is important to lay out your conditions based on the guidelines and rights that protect your debtors. Make sure to draft a clear and concise letter stating the urgency of the problem and the possible solutions and options, so your client can pay off whatever is due. List down the exact amounts of payments that are due – ensuring the descriptions are there as well, to remind your debtors what those payments are for.

Remember that your goal is to communicate with your debtors in order for them to cooperate with you. If they need time or if they set certain conditions that will allow them to pay off without additional problems, it is best to discuss it with them instead of bombarding right away with a letter from a credit and collections company.

There are reports showing that an estimate of 10% of those enrolling in a debt settlement program actually achieve what they set out to do – get a significant reduction in their debts, pay it off completely and have the rest forgiven. The other 90% either went out to complete payments on their own or give up entirely and file for bankruptcy. Some of them got themselves even further into debt than when they started.

Most of you reading this may be slightly discouraged at the figures and while it is a normal reaction, you need to know a few things. The first is debt settlement does work. We have the 10% to prove that. It may be a small statistic but it goes to show that there is nothing wrong with the concept.

So what happened to the 90%? Or probably the right question is, what did the 10% do to make this debt relief work for them?

Most of the people who think so negatively of debt settlement are usually those who did not succeed at it. For one, most of them complain of the service fee that debt relief companies charge.

First and foremost, they should have read the laws stated under the Telemarketing Sales Rule or TSR. It is stated there that no debt relief company is allowed to charge an upfront fee. Secondly, they are not allowed to ask for fees unless there is proof that they have successfully negotiated for a reduced debt with your creditor or collector. If you the company you are talking to now are asking for fees before results are shown, you should switch companies.

If the service fee is bothering you, remember that debt settlement is something that you can do on your own. While it can be stressful on your part, that is the price you pay for skipping on the professional fee.

Another complaint that we receive is the fact that people find themselves deep in debt once more. If you want to make sure that debt settlement will work for you, go to the root cause of the problem. This is actually a must for any type of debt relief that you will take on. Don’t concentrate on just paying off your debt. You need to create a budget and spending plan to make sure that you will not land in the same position again.

Debt settlement can provide real savings and benefits to debtors. However, it is not the only solution. Another problem that we can identify as to why people cannot find debt relief through this program is because of their attitude towards it. There is no magic solution wherein you do not pay for your debts at all – except for bankruptcy of course but you will find that the repercussions will echo for the next 10 years.

Any form of debt relief has pros and cons and the same is true for debt settlement. While there are creditors who accept debt reduction, it is not a guarantee. That is why the law states that the debt relief company should never ask for fees unless the debtor is shown proof of a successful settlement. You need to be patient if you get “NO” for an answer.

What we can assure you is this: debt settlement is a legal way of achieving debt relief but only for those who are in a real financial crisis and who are willing to address the root cause of their debts. Ultimately, your success will lie in how much you know about it. This may be a disconcerting and frustrating time in your life but you need to take a grip of yourself and get your wits together. Research and approach the right people/company who can truly help you.

The debt cycle begins with word play. If lenders offered customers the opportunity to owe them money, most would decline and run for the hills. Instead, the word credit is used to trick the mind into believing your not entering into an employment agreement. The term debt free bread means money owned not owed which everyone should want. When you acquire credit you begin to work for someone else instead of yourself. For example, most people aspire to obtain a mortgage which usually carries a 30 year sentence. Luckily, my family’s attempt to do the same changed our relationship with money forever.

After applying for a mortgage with Wells Fargo, we discovered we couldn’t get pre-approved without extra measures like a manual underwriting complete with letters of explanation. The feeling of being rejected was a much needed wake-up call. We realized our finances weren’t healthy, managing debt is idiotic, and paying minimum payments on time wasn’t enough. That day changed my life because it began my quest to learn more about money, credit, and buying a house.

As a result, we’re now on a debt free journey and never want to acquire credit i.e. debt ever again. So far, my husband and I have managed to payoff $9318.00 of student loan debt in just 7 months. We didn’t receive a windfall of money. Nor are we a family with two incomes or no children. In fact, my husband is a hardworking blue collar man averaging between $45,000 and $65,000 a year. Meanwhile, I stay at home with our two beautiful boys with special needs. I’d like to share the principals that allowed us to change our relationship with money. Below I’ve listed some questions to ask yourself to stop the cycle of unconscious spending.

Imagining leads to action which creates a readiness and desire to do something today. Whereas, dreaming exist in the walls of your mind, only coming to fruition at an unknown day and hour. Are you dreaming or imagining a debt free life? Your answer makes all the difference. Its well understood that all actions begin with a thought. So, decide to imagine a debt free future, then begin to build.

First, you need to understand why being debt free is important to you. If your reasons aren’t clear or easily forgotten when temptation arises, your debt free journey will come to a screeching halt. In order to increase your chances of success you need to remember why your relationship with money must change.

Start by getting small pieces of paper and a pen. If you have a significant other, they should do the same. Begin to write down all the reasons you need and want to become debt free. Then place the notes in a clear jar labeled, “Debt Free Dreams.” Everyday remind yourself why you’ve chosen a road rarely traveled by pulling out a note as soon as you wake-up.

This step is important because most of us are in debt due to unconscious spending. Allow your own thoughts cemented on paper to remind you of your financial goals. When you’re tempted to cheat yourself (and you will be tempted) the jar will allow you to draw strength from your own words. You can write similar thoughts in a small memo pad that can be carried in your purse or pocket while on the go.

Bankruptcy is the dreaded direction when you cannot pay your debts anymore. It is not a debt free settlement scheme. It will freeze your debt accounts and in what price do you have to pay? Negative credit score, meaning, you will not have the chance anymore to get credit or loans from all financial companies which can last from 10 to 20 years depending on the severity of your problem.

So if you can still prevent falling totally into bankruptcy, be informed of your financial status right away. Do not let financial crisis ruin your life by paying attention to these warning signs when you can still do something about it before the problem gets worse. When you are not able to pay for the principal amount or full balance of your credit card, there may be something wrong with your finances. If you happen to spend your payment to cover other priorities, you need to catch up and pay bigger amount for the next month so interest charges on your credit card will not pile up.

Getting more debts to pay the other may be your way to survive the pressures and strains of your debt problems but it is not actually a good idea. The amount you owe from another source also accumulates bigger interests which contribute badly to the debt cycle. It is advisable to stop getting loans until you have paid the first creditor. If you start getting more cash advances from your cards for non-emergency reasons like paying off your other debts, it is a warning sign that you cannot afford to pay your debts. With the high interest rate that comes with it, you are only putting yourself in a very tight situation.

Your answering machine may have been bombarded with loan offerings from various lenders but suddenly became flooded with creditors’ warnings and aggressive collection. You need to open your doors for more breathing spaces and income generating ideas because you may soon become a possible candidate for bankruptcy.

If you are experiencing one of the mentioned scenarios, it is time to take wise actions to clear your way for a more responsible financial management and get over your worries about your debts. Debt management and consolidating companies are your perfect partners for debt assist online. With their years of experience in the industry helping a lot of people with different situations, you can be assured your own case will find its matching solution. Deal with a reputed and excellent company with a solid name to boast in the industry.

• Write down all your debts. Sometimes, writing things down keeps everything in perspective and you get to see which debt should be prioritized.

• Set up a realistic monthly budget and stick with it. This way, you know just how much should be spent for your daily needs and the amount that should be paid to your creditors.

• Do not be content with the minimum. If you can afford it, you need to pay for more than the minimum payment requirement. Otherwise, you may end up paying for your debts forever.

• Limit your spending what you can afford to pay in cash. If you cannot pay cash for something, best not to buy it.

• Maintain only one credit card. If you have more than one credit card, keep the rest and bring out the one with the lowest interest rate. And if you have to use it, make sure you can pay for the debt within the first billing statement.

• Build up your emergency fund. This does not really need much explanation. Just make sure you do not spend this fund unless you really have to.

• Keep your entertainment activities economical. There are several entertainment options where you do not have to spend a dime. Instead of going out on movies, you can rent out and watch at home. Or you can cook a romantic dinner for two. Even if you have debts, it does not mean you can’t enjoy the simple pleasures in life. You just need to find cheaper alternatives.

• Learn how to bargain. If you have to purchase something, learn how to find them at bargain prices. Or you can time your purchase during sales and discount promotions. By lowering the costs spent on expenses, you can increase the amount allotted for your debt payments and thus achieve financial freedom earlier.

• Utilize government sponsored benefits. These include medical facilities, community centers and other establishments that can be availed for free or at a low price.

A consulting company with the client’s best interest in mind will always take the time to inform about the exact services offered and the steps they will take to get a client to a beneficial settlement. There is no quick fix, and the debt settlement process will take some time in order to be debt free.

Stay away from companies that promise their debt settlement process will not affect credit rating or who promise debt problems can be fixed quickly. Going through a debt relief program means a credit score will go down before it goes up. This is one of the consequences faced when debt gets out of control to the point where it cannot be paid off.

Using a debt settlement plan is still a great financial choice, even if the credit score will go down. Choosing debt settlement means a business does not have to file for bankruptcy. To get a stable credit rating, business owners need to pay bills on time, or the score will drop significantly.

However, if an SBA own was used, then credit should not be affected too terribly. In an SBA loan, the borrower is the business entity. The business owner did not borrow; instead they are a guarantor in the event a business fails. A default on an SBA loan does not affect personal credit. Usually, a loan workout can be completed without damage to personal credit.

If a bank decides to sue personally since the owner was the guarantor of the loan and the bank has judgment against the owner, then the credit report will receive a negative mark. Engaging in settlement discussions with creditors on the personal guarantee, then a lawsuit or judgment can be avoided to save credit.

Seeing as the business is already in debt, it is a good idea to consider how much a consultant will charge and appropriately budget for their services. Choose a company that is affordable, not just overall, but for a client’s personal budget. Picking a company out of budget will only escalate debt problems.

However, choosing the cheapest debt settlement company will not be beneficial. A consultant company should fit in a client’s budget and offer services that the client specifically needs. A consulting company should gel well with a client’s way of thinking and financial goals. This takes some research and conversations with the company.

Being able to afford the monthly payments for the debt settlement company is the best answer to settlement solutions. This is the best way to handle credit card and other kinds of business debt without having to file for bankruptcy.

A debt settlement company should have top notch debt negotiators. Debt negotiators have a solid understanding of laws governing the debt settlement industry. They will fully understand each client’s financial situation and the best settlement possible for that business.

Make sure the consulting company offers bankruptcy assistance if debt settlement is not beneficial or achievable for a client. A company that offers bankruptcy solutions when a debt settlement has failed means they actually care about a client’s business and their debt and wish to provide the most comprehensive and beneficial solution.

A consulting company should offer many services to find the best solution for financial needs. Consultant companies should offer solutions to debt, equipment leases, offer in compromise, SBA loan, secured bank debt workout, unsecured vendor or supplier debt workout, IRS obligation and state tax debt, seller financing notes, secured mortgages, and debt management.

The consulting company should be experts at business debt relief with the ability to remove or reduce business debt that was incurred. A debt workout system should be provided to help businesses navigate around economy issues and toward financial freedom.

It is a bad idea to try to tackle debt negotiation individually. A debt problem is threatening and lonely. Having a good support system of friends and family will help relieve the stress of business debt. To actually help get rid of debt, seek out a debt consulting company to help organize, manage, and communicate with lenders to get a beneficial debt settlement.

Time can be a business’ enemy or friend, depending on how soon the debt is acted upon. Immediately contact creditors and explain the current debt situation. Ignoring lenders will make the situation worse. Tackling a debt problem in the early stages will make the process easier to resolve.

It is in everyone’s best interest to find a solution, so lenders should work with businesses to lower interest rates, increase the credit line, and restructure repayment options. Dealing with multiple creditors or collection agencies can take away from running the business. Reputable debt consultants can negotiate with creditors to settle debts for less than what is owed.

Creditors are terrified of losing the money they loaned out and need to remove the debt from their books. They will respond positively to efforts in starting the negotiation process of debt collection. Debt negotiation means creditors have the chance to recover some or all of its loaned assets.

Be prepared to put down some money. Lenders may want at least half of the loan up front. Creditors may not even negotiate until some money is given over. This is where a consulting company is useful – they could get businesses a lower upfront fee to begin negotiation.

When a payment is made to the creditors with a credit card or bank account, the creditor then has all of the owner’s banking information. If an owner gets sued during the process, the creditor has this information and can get at an owner’s funds easily. Instead of these payment methods, pay debt with a money order so information is secure.

Creditors are willing to settle for less in order to guarantee they get something back. Many business owners should expect to pay less for a lump-sum payment. Owners need to demand the debt be shown as paid in full on the credit report. Fully paid or debt satisfied is the kind of language owners want to see on a report. Debt still active is not want owners want.

Do not back down and accept a repayment deal that is too much for an owner to pay. Do not agree to any debt payment plan that cannot be afforded. Owners need to tell creditors what they are willing to pay. Let them know if they demand more, the owner will be forced into bankruptcy where creditors receive no payment whatsoever.

Find out how far a creditor is willing to go. If they offer three months at no interest, try to get six months. Always aim for a higher deal and understand how much negotiating room there is to work with a personal budget.

A lawyer may have to get involved if there is a substantial amount of debt. Most creditors have agents or customer service reps to handle debt negotiations. A lawyer can also be helpful if negotiations are going nowhere, or if a creditor does not fulfill their end of a settlement. Having a lawyer early on means a written settlement contract and smooth negotiations.

In order to solve your debt problem, you must keep a proper record of your financial situation. You should be able to have figures on your revenue and expenditure so that you will be able to plan effectively. Book keeping is not reserved for companies or organizations alone, it is a tool that you can use to organize your finances and get out of debt.

Moreover, you can negotiate a lower interest rate or principal balance with your creditors, even if you have not missed payments or aroused their anger. By negotiating a lower interest rate, you will be able to prevent the debt from increasing. There is nothing bad in calling your creditors and ask if they could offer you either of these benefits so as to have the opportunity of reducing the burden of that debt significantly.

Since the quickest way to solve a debt problem is to have enough money to pay it off, if you have other sources of income, you can use them to settle your debt. You can make use of your investments or savings to pay part or the whole debt. This option is ideal in a situation whereby you are paying a high interest rate, as early settlement will ensure that you will pay less interest. It is better to pay off early with a low interest rate than delay the payment which can lead to the payment of a high interest rate.

It is very important for you to be financially disciplined so that you don’t get yourself into debt over and over again. You should live on less income than you earn because buying on credit encourages you to spend more than you earn. You should try as much as possible to avoid spending money that is not really yours, while you should see your credit card as a loan and not money in the bank. As a result of this, you should only use it on emergency situations and not to purchase things that you are not able to pay for.

Debt can be owed to many different companies. It can come from utilities, service providers, landlords, suppliers, and banks or private lenders. First, it is important that business owners alert the creditors that the business is being closed. This could reduce the amount of liability owners carry.

After notifying creditors, owners should make plans to get rid of these debts. Options include paying the bills in full, settle the bills for less than the full payment, or file for bankruptcy. No matter what, owners should not ignore their debt and hope that creditors will ignore it as well. Collection agencies, repo men, lawyers, and lawsuits will haunt owners for several years.

Most likely, business owners will not be able to choose the first option to pay all the bills in full. This means owners need to negotiate their business debt to get a settlement. This depends on the type of creditor, the legal portion of the debts, and how severe the creditor acts.

If the business is an LLC or corporation without any debts personally guaranteed, then the creditor cannot collect from the business owner personally. This means creditors will be able to accept a small portion of what the business owes as the full payment. If the business owner owes debt personally, or if a friend cosigned for it, the creditors have more leverage.

When business owners can pay 30% to 70% in cash on the barrelhead, it is worthwhile to try to settle the debt. Creditors understand that they have a hard time collecting their money once the business has been closed. Therefore, they will agree to settle debt for 50, 60, or 70 cents on the dollar. Sometimes business owners can settle for less when hiring a consultation company.

It could make very little difference if business owners settle a couple of small debts while leaving the larger ones unsettled. Owners should make sure to tell all the creditors that the offers are contingent upon all creditors agreeing to settle debts.

Business owners need to prioritize their debts. If there are any loans that were personally guaranteed, these should be settled first. After paying loans that owners are personally liable for, any wages and benefits owed to employees should be paid. Any money left over should be paid to suppliers, credit companies, lease deficiencies, and bills from random expenses.

There are a few steps to take when settling debt. Owners should explain the business cannot pay the debts and they can offer partial payments. If creditors agree, then owners should get them to sign a release for the entire amount in exchange for the partial payment. Without a release, there is no proof that the debt has been settled. Creditors could sue for the remainder of the debt.

The last option for debt negotiation is filing for bankruptcy. This allows owners to wipe out debts there is no hope in paying. If a business owes a lot of debt that is unable to paid, bankruptcy is a fresh start. When owners feel like this is their only option, he or she should debate if bankruptcy or liquidating the business assets is a better decision.

Business debt can ruin an owner’s finances very easily. Understanding the ways to negotiate and resolve the debt will help owners save themselves from ruin. If debt is settled generously, business owners can actually have a second chance at success with a future business.