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      June 18, 2018

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Benefits of Debt Settlement

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Debt Consolidation vs Debt Settlement

When it comes to debt relief, there are several different types that can provide effective results to those who need to either get rid of their debt through a structured payment program or in one lump sum payoff. Quite simply, this is the difference between debt consolidation and debt settlement. Before deciding which one is right for you, it may help to know a little more about each option and how it will affect your future ability to obtain credit.

Many people may not realize this, but there is a big difference between debt consolidation and a debt consolidation loan. The latter involves a lender granting money to be used for the purpose of paying off other debts in exchange for one single monthly payment. Debt consolidation, on the other hand, is a term used by many non-profit organizations that offer debt management services without actually issuing a loan. With debt consolidation, your bills are still combined into one lump sum payment and payable directly to the non-profit agency who then distributes individual payments to your creditors based on a customized agreement.

In most cases, a debt consolidation program will allow debtors who are seriously delinquent with their bills to regain current status with creditors. Because a debt management company works to negotiate lower interest and monthly payments with each creditor, most individuals will see their credit reports updated to "Paid as agreed" within 1-3 months of consecutive monthly payments through the new program.

Debt settlement is a fast and permanent solution to debt problems, but it often requires a lump sum payment in order to satisfy the entire debt. As the name implies, debt settlement allows you to settle a debt at a fraction of the account balance. Depending on the length of delinquency, some debts may be settled for as little as 20% or as much as 80% of the total account balance. When you enter into a debt settlement with a creditor, the account will commonly be reported as "Settled account" on your credit report. Although this is considerably less desirable than "Paid as agreed", it shows that you have made a good faith effort to repay the debt in accordance with your ability. At the same time, a notation of a settled debt is much better than continued late or missed payments or, in extreme cases, even bankruptcy.

Once a debt settlement agreement has been reached and paid in full, the lender will "forgive" the remaining balance on the account. In some instances, depending on the amount of forgiven debt, some lenders may issue an income form to both you and the IRS. This means that a portion of the debt may be considered as income and, therefore, may be taxable.

Once you begin to fall behind with debt payments, it's important to regain control over your finances as quickly as possible. Not only can a poor credit rating affect your ability to get credit, but it can also hinder the potential for future employment. Today, many employers perform a credit check on their new employees and it can make a great deal of difference whether you attempted to rectify your financial problems or just ignored them. At the end of the day, the best way to handle budget woes is to face them with the knowledge that there are options to getting out of debt.

The Macedonia effect Deal may boost Greek debt relief hopes

ATHENS (Reuters) - With a brief formulation of words, Greek Prime Minister Alexis Tsipras may have boosted his chances of persuading foreign creditors to free his nation from years of financial humiliation on better terms than a few days ago. Tsipras ...

Published:  Mon, 18 Jun 2018 09:42:00 GMT



Greek Debt Talks: the Main Relief Measures Being Considered

Greek bailout talks are reaching the final stretch and creditors are debating what relief measures they can offer Europe's most-indebted state to ease its financial burden and facilitate its exit from the latest lifeline. Negotiations over the type, size ...

Published:  Sat, 16 Jun 2018 20:00:00 GMT



Nearly 35,000 former Corinthian College students in California will see debt relief

Almost 35,000 former Corinthian College students in California will have the remainder of their private loan balances forgiven and some may receive payment refunds after an investigation by the state attorney general's office said a loan company engaged ...

Published:  Thu, 14 Jun 2018 22:30:00 GMT



FTC Settles Claims Against Student Loan Debt Relief Company for Over $2.3 Million

On June 11, the Federal Trade Commission (FTC) announced that it had settled claims against an individual and his loan debt relief companies in connection with its coordinated federal-state enforcement initiative to target deceptive student loan debt ...

Published:  Mon, 18 Jun 2018 12:19:00 GMT



Becerra announces $67m debt relief from private student loans for Corinthian tuition

California Attorney General Xavier Becerra announced in San Francisco Thursday that the state has reached a settlement of $67 million in loan forgiveness for 35,000 students who took out private loans to attend programs of the now-defunct Corinthian ...

Published:  Fri, 15 Jun 2018 07:33:00 GMT



Video: Athens Stock Exchange CEO on What's Next for Greece's Debt Woes

Socrates Lazaridis, CEO of the Athens Stock Exchange said clarity on Greece's debt relief will give relaxation to international investors investing in Greece. "In a market where 65% is owned by foreign investors, I believe we have an opportunity to attract ...

Published:  Mon, 18 Jun 2018 12:40:00 GMT



Some bankruptcy judges look for 'wiggle room' in student debt cases; law clerks prove instructive

One study using the Westlaw database found that judges issued rulings on student loan debt only 16 times last year. Judges canceled the debt in only three cases and gave partial relief in another.

Published:  Mon, 18 Jun 2018 06:01:00 GMT



My Money - What is Debt Consolidation

Q: We hear about debt consolidation a lot. What is debt consolidation A: Debt Consolidation loans are used to pay off other outstanding debts, so instead of continuing to pay multiple payments each month, you only have one. Q: What is the most common type ...

Published:  Fri, 15 Jun 2018 12:50:00 GMT



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