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      February 22, 2019

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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.

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Published:  Wed, 20 Feb 2019 09:53:00 GMT



Student debt relief is union work

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Published:  Fri, 15 Feb 2019 13:38:00 GMT



Michael Torpey Discusses the Student Debt Crisis on One-on-One with Steve Adubato

NEW JERSEY -- A new game show on truTV called "Paid Off with Michael Torpey" offers relief from student debt to its winners. Actor and Host, Michael Torpey, appeared on One-on-One with Steve Adubato t...

Published:  Wed, 20 Feb 2019 17:06:00 GMT



Take It to the Limit: Increase in Chapter 13 Debt Limits

Often, debtors with regular income but high student loan debts fail the Chapter 7 means test requirements while simultaneously exceeding the Chapter 13 debt limits. For such debtors, Chapter 11 may be ...

Published:  Thu, 21 Feb 2019 14:22:00 GMT



Millions of Americans have been carrying credit card debt for years

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Published:  Wed, 20 Feb 2019 21:39:00 GMT



Tips To Strengthen Finances Before Another Recession Shared By National Debt Relief

The last Recession in 2008 affected a lot of people that is why National Debt Relief shares this article to help people prepare for another recession. The article titled "How To Strengthen Your Financ...

Published:  Thu, 14 Feb 2019 08:40:00 GMT



How to tell your S.O. you have debt-and navigate other tricky money chats

"Otherwise, it becomes this big secret." Plus, disclosing debt to a partner typically comes with a sense of relief. McLay says partners tend to be supportive of the information, and often even feel ha...

Published:  Thu, 21 Feb 2019 05:12:00 GMT



As student loan bills balloon, Madison-area companies offer debt relief as a perk

Forget the free snacks. Move over, gym memberships. A Madison company this month launched a new employee benefit - paying off a portion of an employee's student loan debt - in a move that ...

Published:  Mon, 11 Feb 2019 15:14:00 GMT



SENIOR LOOKOUT: Are you facing debt Here are some tips to consider

It may cause some relief to realize other older people are living with debt, as well, but don't let it lull you into the sense that it is a healthy financial situation. Debt later in life will do the ...

Published:  Thu, 21 Feb 2019 11:48:00 GMT



Minnesota farmers' debt load rises as incomes continue to lag

The current debt issues could also lead to more consolidation in the agricultural industry, but increased consolidation has been apparent throughout the 20th century, he said. "This might facilitate s...

Published:  Thu, 21 Feb 2019 08:58:00 GMT



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