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Choosing Debt Consultant Company

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.

Way to Negotiate Business Debt

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.

You Can Solve Your Debt Problems

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.

Negotiate Business Debt

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.

Debt Management Plan

This is one of the best options for people who have difficulty meeting their financial obligations. However, there are other options available and suitability will depend on your individual circumstances. A Debt Management Plan will work best for people who owe £5000 or more and can afford to pay at least £100 each month to their creditors.

Your normal household bills will have to be deducted from your monthly income first and the amount that remains is the amount available for your monthly DMP repayments. Normal household bills include, for example, your mortgage, rent, utility bills, council tax, food and groceries, travel expenses and child care. Many of these are classed as priority so they take precedence over payments to creditors.

Whatever amount is left after all these are paid will serve as the starting point for a DMP. The types of outgoings that can be included in a DMP include unsecured loans and overdraft repayments, catalogue payments, charge cards, credit card bills, payday loans and personal loans from finance companies.

Debt management companies work effectively in two ways. Firstly, they play an active role in helping you to take control of your financial commitments, which primarily deals with the repayment of arrears. These agencies focus on communicating and intervening with creditors and administering payments to them.

Secondly, debt management services involve financial counseling to help you learn how to control future spending. The work of these companies involves explaining the various options to you, including Debt Management Plans, and helping you to choose a custom-made strategy that will enable you to gradually pay off everything you owe to creditors.

The primary concern of debt management companies is to negotiate lower interest rates and easier repayments. Depending on your ability to clear outstanding balances, they can even work with creditors to allow you to pay in full at a reduced sum. These companies can often reach the most beneficial payment arrangements because they have already established good relationships with various creditors.

Should you decide to get professional assistance from an agency, you should initially choose one that will most effectively meet your particular needs. Compare companies through the Internet and read through their specific services carefully. Do they have a wide range of services and are they used to dealing with people in your situation?

Once you have found a suitable company it is easy to apply for help. Many have a simple online form that enables you to submit your details. The company will need to discuss your circumstances further to ensure that they find the right debt solution to suit you so be prepared for a call once you submit your application. To get the right level of help it is best to ensure that you state everything relating to your financial issues.

With the aid of a targeted repayment arrangement that suits your individual requirements you will be well on your way to a healthier financial future. It is important however to be aware of your future spending habits as it is easy to return to the same old practices and repeat the cycle of overspending.

Small Businesses Dealing With Debt

What You Should Do

Of course planning is one of the most important things you can do when running a business, but the problem for many self-employed entrepreneurs is that they don’t do it. In the world of finance, it’s very difficult to track what goes in and what goes out. Timing is also important because most businesses will fluctuate in the amount of business they do. This is why you can’t really plan on a month to month basis. You must look at things in three to six month blocks.

Also don’t forget to set some cash aside for tax and national insurance so that you can pay your taxes on time. This is a common problem for business owners, especially self-employed entrepreneurs. The tax bill is one of the most important bills you have to pay, but you only pay it once a year, so it’s easy to forget about it until the last minute.

Advice to Consider

For help creating a budget you can work with, try using Business Debtline’s budget sheet on their website. Having a budget will help you figure out how much income you can actually take out of the business. That will help you create a household budget and plan for other benefits or income. Once you’ve subtracted your household budget from the business budget, you can see what’s left to pay to creditors.

All business owners should prioritize their debts. For example, priority debts are those that will result in some sort of loss if you don’t pay them. For example, you can’t do business without electricity. If you need your car for your business, then you must pay your car payment. Non-priority debts are those that don’t have as much power to get their money back, like personal loans and credit cards.

If you do end up behind on your payments, then you should take steps to deal with your creditor and make arrangements. Don’t just wait until they take action against you. Most creditors are willing to work with business owners because it’s less expensive for them and they are more likely to be paid eventually.

It also helps to have someone who can give you good business advice. Having a business coach or other business service expert can help you sort through your budget, make payments where they are needed and cut items from your budget if you can afford to sacrifice them. No business owner can afford to be on their own in the world of business. There are just too many variables that you need to be aware of.

Dealing With Gambling Debt

Seek Help for the Gambling Addiction

Before you begin dealing with debt, it is imperative you get help for your addiction. It’s been proven in many cases that gambling addicts are less willing to admit their problems than someone with a substance abuse problem. Not only should you get help for yourself, but for the ones who love you; your family and your friends. Take the time to really evaluate your situation, and how it has affected you, your family and the general quality of living surrounding it all.

Cut Off Funding

It could be half to all of your paycheque, a credit card, or maybe you’ve been dipping into your savings. In either case, put a complete halt on any money put towards gambling. Cancelling a credit card is never a good idea, as it worsens your credit situation and lowers your credit score. But in the grand scheme of things, putting a stop to it now rather than racking up another large amount of money is probably for the best.

You Won’t Win Back what you Owe

Statistically speaking, the chances of you winning back what you owe are next to impossible. In fact, you’re only damaging yourself even more by putting yourself further in debt, and deluding yourself into believing something along the lines of “well I’ll win back what I owe, and then some for good measure!”

Seek Treatment

If you find doing your best and trying your hardest toward helping yourself isn’t working at all, you may need to seek a professional. In some cases, your health insurance provider may cover some or all of the treatment necessary to cure the addiction.

Personal Debt Management

For effective debt management, first you need to split your expenses into fixed costs and variable costs because you can only control (decrease/increase/cut off) these. Rents, fees, insurance premiums etc. will have to be paid the same way. After that you should prioritize your expenses. Your variable costs could be including a $4 magazine that you buy daily on your way to work. Do you honestly need to spend $80 on magazines every month when the same material is available on the T.V and the internet? Debt repayment can be a painful process when you have to cut down on expenses like these but it is worth the pain.

Another method to manage debt is to consolidate your debts. This means combine all debts and have the interest rate revised by your creditor. For example if you are paying 2% on personal loans category A and 6% on personal loans category B, both taken from the; negotiate with your creditor to combine both loans for an interest rate of 6.5 or 7% in return for a shorter payback period. The 0.5% saving could be worthwhile.

Avoid debt managers if you can because the upfront fees that they charge would only increase the costs you are already trying to cut down.

For paying off debt in an effective manner, you must have a list of all debts that you owe. Begin by paying off the debt with the highest interest rate. If you get rid of an 8.5% loan worth $100,000, you would be saving $8,500 per annum!

Out of Control Debt

  • The first thing to do is forget about feeling embarrassed. When a person becomes self-conscious about debt troubles, they usually procrastinate. Face the problem and deal with it as quickly as possible. Your stress levels, along with your debt load, will be greatly reduced. Once you’ve reduced your debt you’ll be amazed at how relieved you feel, and how much more productive you’ll be. Every client we’ve dealt with has been happy once we’ve helped them resolve their debts. It may be hard to do, but don’t let embarrassment stop you from debt freedom.
  • Get professional advice – it will save you time and money. This sounds easier than it is, for several reasons. We all have friends or family we rely on for advice. Those people always do their best to help, but sometimes they may not have the knowledge base to give you the best advice. Here is an example:
  • We had a client that had equity in their home, but weren’t willing to upwardly refinance their mortgage. They had over $70,000 in credit card debt and ran into problems when the family suffered a job loss. A close friend told them to transfer the title of their home to another family member to protect the home from creditors. That one bit of bad advice almost had our client being charged with fraud. We were able to correct the mistake and help them settle their debt for less than 50% of the principle. The moral of the story – always get professional advice!
  • Don’t put off dealing with your debt. Like we said earlier, putting off dealing with debt is one of the most common things we see. It’s also one of the most damaging things a person can do. Interest can cause a $20,000 debt to balloon to $30,000 a lot faster than you may realize.

Ways to Beat Your Debt

Review Your Financial Situation

The first step to beating your debt is to review your current financial situation. You will need to set aside some time where you can review all of your financial ingoings and outgoings along with all the money that you owe to lenders. You can use Internet banking to be able to easily view your statements and get clear picture of your circumstances. You can also review bills and other direct debits which are going out from your account. Always be honest with yourself and write everything down. It is beneficial to create a spreadsheet which contains all of the information on your present financial situation. This step alone will help you to feel clearer on your finances, and you can start to use the information it presents to create a get out of debt plan.

Cut Down on Your Spending

This step is essential if you want to beat your debt. Start looking for ways that you can save money on your current spending. Even the smallest changes can add up to big savings in the long run. Take a packed lunch or home brewed coffee to work instead of buying it out everyday. Be thrifty with your food shopping, and cut down on spending on personal luxury items that are not necessities. These will only add to your debt, and although the thrill of purchasing it may make you temporarily happy, in the long run it is only going to become an additional burden.

Get Expert Help

It is essential that you seek expert advice on your current debt situation. Professionals in the field will be able to provide you with detailed and comprehensive information on how you can best deal with your debt problem. They will be able to take a look at your current income and expenditure and provide you with some simple solutions, and explain what the advantages and disadvantages are for each solution. All financial help is completely confidential, and there will be no pressure or obligation to commit to a specific service.