Debt Solution help

FTC To Host Workshop On Debt Settlement Industry

The Federal Trade Commission staff will hold a workshop on September 25, 2008, to explore the growth of the for-profit debt settlement industry and to analyze how this model is affecting consumers and businesses. The event is free and open to the public; pre-registration is not required.

WHEN: September 25, 2008, 8:30 a.m. to 5 p.m.
WHERE: FTC’s Satellite Building Conference Center, 601 New Jersey Avenue, N.W., Washington, DC. A valid photo identification is required. A live webcast will be available at www.ftc.gov.
AGENDA: Topics will include regulation and legal developments, advertising and marketing of debt relief services, role of third-party lead generators and other service providers, the history and development of the industry, and consumer education.

The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC’s online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 1,500 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC’s Web site provides free information on a variety of consumer topics.

MEDIA CONTACT:
Office of Public Affairs
202-326-2180

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What You Need to Know About Debt Settlement Programs

Millions of Americans are currently struggling with bad debt, including credit cards and other unsecured loans. The climate calls for unique debt solutions that can help indebted individuals climb out of sink holes of bad debt quickly and efficiently. One such solution is offered by debt settlement companies. They offer debt relief programs that can reduce your total debt by up to 50% and help you get back on track with your payments if you have fallen behind.

Okay, So How Does it Work Exactly?

Step 1. You will fill out an online debt consolidation questionnaire that gives the debt relief company the information they need to determine how to proceed with your debt negotiation process. The online process saves you the embarrassment and time of having to go back and forth with a human counselor over the phone with a detailed history of your debts and obligations.

Step 2. The debt relief company will then set up a trust account, similar to an escrow account, in your name with a reputable debt relief attorney in your area. From that point forward, you will make your regular debt payments to this trust account.

Step 3. Meanwhile, skilled debt negotiation attorneys will be working on your behalf to come to an agreement with your creditors. Debt settlement companies can reduce your debt by up to 50% off the bat. They will prioritize your debts based on the interest rate (highest first) and whether it is a revolving or installment account.

Step 4. Once your trust account reaches a certain level, the debt relief attorney who is working on your behalf will settle with your first creditor and scratch that debt off of your list. You will continue to pay into your trust account until all of your debts are settled.

Your Requirements and Responsibilities

- You have to stop using your credit card accounts. Your credit card debts will never go away if you continue to use them. You simply cannot succeed with a debt relief program if you plan to keep making charges on those accounts.

- The interest rates on your unsecured debts generally have to be over 10% to qualify for debt settlement programs.

- Continue making your agreed upon monthly payment to your trust account each month in full. The quicker your trust account reaches the balance where a creditor can be paid off, the quicker you will be out of debt.

Important Considerations

Ask Yourself These Questions. When you are looking into debt settlement programs, you have to first ask yourself exactly what you are trying to accomplish.

- Are you looking to reduce your monthly payments?

- Are you trying to get rid of your debt more quickly?

- Are you looking for a debt solution because you have fallen behind and are tired of creditor calls?

It may be a combination of all three, but one of these questions applies to your situation more than the others. When you are truthful with yourself and figure out what your main motivation is for seeking debt reduction strategies, debt settlement companies can design a solution for you that is tailored for your exact situation.

Fees. All of the fees for your participation in a debt relief program are already built into the agreed upon low monthly payment that you and your debt negotiation attorney have decided on. There are no additional costs.

Your Credit Rating. A common question from those who are looking into debt relief programs is “What will happen to my credit report?” When you stop paying your debt payments to your creditors and begin to make your payments to a trust account instead, of course this is going to cause your creditors to raise an eyebrow. You may experience a temporary increase in creditor calls. You will inform them that you are now working with a debt settlement law firm and direct them to the attorney’s office. After your creditors have been duly notified that you are on a debt relief program, most consumer protection laws state that they should no longer be harassing you. Your credit accounts will show as “not current” on your credit report until the accounts are settled in full. The good news is that after a while your credit rating may actually go up after your debts are paid off since your debt percentages will be reduced. Compared to the crippling effect of a bankruptcy on the average consumer’s credit score (10 years of bad credit), working with debt settlement companies is a mostly preferred alternative.

How would it feel to have zero debt again? You may have forgotten what that is like after years, even decades of debt payments. Once you have made the conscious decision that you are no longer going to be enslaved by outrageous balances of unsecured debt, your debt solution is waiting.

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