- Unsecured Debt
- Credit Card Debit
- Gas Cards
- Credit Union credit cards
- Medical Bills; Smaller amounts ok if with smaller billing company
- Repossessed Car Loans: Deficiency balance required
- Utility Bills: Outside collection only
- Cell Phone: In-house and outside collection ok
- Business Credit Cards: Need business waiver signed
- Time Shares: (Mortgage late charges still accrue)
- Minimum of $10,000 in total debt per enrollment
- Student loans (Private)
- Any total debt under $10,000
- Utility Bills-not held with an outside collection agency
- Jewelry & furniture (see above disclosure)
- Secured Loans, i.e. car, home equity line, boats, ATV, motorcycles, etc.
- Active military personnel
- Government Loans, i.e. federally tied personal or student loans
- U.S. Military loans/credit linked to military (i.e. Military Star, Navy FCU) possibly linked to pensions, and/or retirement
- Operating business loans-needs waiver
- Student loans (Federal)
DO NOTHING (pay the minimum payment):
- Interest rates can range from as low as 0% to as high as 30%, and creditors can raise rates at any time.
- You’ll pay nearly 50% of your original balance in interest alone over the first 3 years.
YOU ARE NOT MAKING A DENT ON YOUR PRINCIPAL BALANCE
- If your rates are 25% or higher, it is practically impossible to pay off your debt by making minimum payments unless you pay at least 3% of the balance in minimum payments with little room for obtaining additional credit.
- If you have already stopped making payments, you are destroying your credit while not resolving any of your debt in the process.
- Both Chapter 7 and Chapter 13 represent a severe negative impact on your credit for 7-10 years and can cost up to $2500 to file.
- May have a negative impact on your employment status or future employment.
- In a Chapter 13 filing, you may end up paying 75-100% of your debt back with little payment relief, Completion rates for this option are low for this reason.
- Chapter 7 is more difficult to qualify for under the new bankruptcy laws.
- Carries a negative stigma, mental stress, and other burdens.
- Bankruptcy should be a last resort.
CONSUMER CREDIT COUNSELING:
- Programs are generally funded by the credit card companies themselves as the intent is to help you pay back your debt in full.
- You will pay back 100% of your balances with some interest.
- Negative impact on credit.
- This is often viewed by some lending institutions as similar to Chapter 13 bankruptcy.
- Very little payment relief, if any at all.
- Program lengths can be up to 7 years.
DEBT CONSOLIDATION LOANS:
- You must qualify.
- Typically requires ownership of Real Estate property.
- Home Equity loan reduces future equity available in your property.
- Missing payments can cause you to lose your home.
- Payback period can be 10-30 years depending on debt balance and ability to pay back the loan.
- You will pay back the full amount of credit card balance plus interest.
- You are exchanging your unsecured debt for secured debt – this creates a big risk and does not resolve your debt.
A consumer-driven program not affiliated with your creditors. Results are focused in the consumer’s best interest.
- Fees are spread out over the length of the program.
- Client debt is paid off typically between 24-48 months but for larger balances can be spread out over 60 to 72 months.
- As each account is settled your credit score grows.
- Typically pay back between 40-60% of your outstanding debt.