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Option 1 ... Do Nothing :
While doing nothing is an option, it is not a practical one. Unfortunately, a significant number of consumers do just that. If you wish to improve your financial situation, action must be taken. Did you know that if you pay the minimums on a credit card, say with a $10,000 balance, with a national average interest rate of 17%, paying only the minimum payment each month it will take you 40 years to pay off and you would have paid back $42,000 for borrowing $10,000? It is impossible to payoff your debts by making the minimum monthly payments. If your financial obligations outweigh your financial means, and you are ready to do something about it, contact our consultants at U.S. Financial Freedom. |
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Option 2 ... Debt Consolidation :
Borrowing from Peter to pay Paul? That is no way to get out of debt. It is however, the premise behind debt consolidation programs. Debt consolidation programs provide consumer loans based on items of equity. For example, a home equity loan is used to "combine" your debts into a single monthly payment, which can often take 20 to 30 years to repay, depending on your financial situation. This may seem like a viable solution in the short term, but missing payments on a secured loan could cause you to lose your home and any other collateral you pledged. Many people who decide to go the debt consolidation route find themselves worse off than they originally were. In most cases, it is not a good idea to exchange your unsecured debts for secured ones. Remember, you got into trouble in the first place by borrowing money, right? You cannot borrow your way out of a debt problem without creating another debt problem! |
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Option 3 ... Credit Counseling / Debt Management Plan :
Consumer Credit Counseling Services and Debt Management plans were originally established to help credit card companies recover revenue from clients that were falling behind on their bills. Choosing to use a Consumer Credit Counseling Service can have negative effects on your credit that last up to 10 years. These services are also considered Bankruptcy by most lending institutions, they will only consider you for home or auto loans during the program. This is sometimes an available option before debt settlement or filing for Bankruptcy if you can handle the monthly payments. Contact our Debt Consultants to find out if this is a viable solution for you.
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Option 4 ... Debt Negotiation / Debt Settlement :
With changing times comes a need for change. That is exactly what our debt settlement program creates; a change for the better. Today's consumers require the most efficient way possible to resolve financial hardships. Our Debt settlement programs provide consumers with a viable solution to an otherwise complex problem. By helping to reduce your current debt, our program provides you with a way to regain control of your finances comparably in the shortest amount of time. Our Debt settlement programs are fast becoming the only true option to financial recovery outside of bankruptcy! |
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Option 5 ...
Bankruptcy Alternative :
Note: U.S. Financial Freedom is not a law firm and cannot provide legal advice or any other type of legal advocacy. For bankruptcy related questions concerning your situation, we recommend you consult with a local attorney in your State. Thanks to the new bankruptcy law, debtors will now have a longer, more difficult time when trying to file for bankruptcy. Some of the new requirements include pre-filing consultations, with an approved credit counseling service, in an attempt to force debtors to pay their obligations outside of bankruptcy. Additionally, in order to file bankruptcy, a debtor needs certification from the credit counseling agency before they are able to move forward. The new law also includes an income-based "means-test" that determines which debtors possess the ability to re-pay their debts. Those who don't pass the means test will be left with Chapter 13 or do nothing. In addition to everything already discussed, the reform act requires the following: additional documentation from the debtor; the waiting period between Chapter 7 filings has been increased from 6 to 8 years; and a debtor's final discharge in bankruptcy is now subject to completing a course in financial management first. Additionally, even if you do qualify, a bankruptcy will remain on your credit record for 7 - 10 years and seriously affect your ability to be approved for credit. Even after a bankruptcy has been removed from your record, you are still required to disclose it on forms and applications; even applications for employment. Bankruptcy can have an adverse affect on your life and lifestyle long after the legal matters are over. This is not a decision to be taken lightly. Bankruptcy is an option that should only be explored as an absolute last resort to solving your financial problems. |
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Faq |
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Do you provide loans?
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| No, we do not provide loans. We provide a Debt Relief Services which will allow you to satisfy your current obligations without incurring more debt. (Any loan should be a real short-term solution. Most people should not acquire more debt to try and get out of debt. The last thing people with credit problems need is more debt.) |
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How do I pay for these settlements, how does it work? |
| We work out a monthly amount that each client can afford to pay. That amount is placed in their personal bank account and builds up each month. Once enough funds have been saved up (typically 50% of what is owed on one account) then our negotiators start working with your creditors. |
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Will the creditors start calling and harassing me? |
| Yes. As someone goes delinquent with their accounts, especially in the beginning, they will get creditor calls. However, we have developed steps that our clients can use that are effective in reducing and often eliminating phone calls from creditors. |
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What happens to my credit? |
| Your credit score will decline during the program itself. How much it will decline will depend on your original circumstances. Some of the accounts you place into negotiation are likely to “charge off”, which will reflect negatively on your credit. However, once a debt is settled, the settlement is reported to the credit bureaus. Settled accounts are positive compared to unresolved delinquent debts or bankruptcy. After all the debts have been settled, the credit score will begin to improve since the negative items have been resolved. In addition, your debt-to- income ratio (an important measurement made by potential lenders that is not always directly reflected in your credit “score”) will greatly improve, since you will be debt-free. Of course, credit is an important thing to have, but obviously your first priority should be to clear up your debts and get back on your feet financially. |
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How much does your program cost? |
| Each individual’s financial situation is unique and requires a unique program that is designed to meet both thier long term goals and budget. With this in mind, the cost of our program is determined by 5 main factors: |
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How much money you owe to individual companies, and in total. |
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How late you are in paying your monthly minimums. |
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Which companies you owe money to. |
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How many companies you owe money to. |
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How much you are able to save each month to pay off your debt. |
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| Once we fully understand these variables we can then give you an accurate estimate of what you will pay in our program. This is why we offer a full debt relief consultation to all prospective clients. In the consultation we assess your financial situation, your financial hardship and then create a program that fits both your goals and your budget. This consultation and analysis is free of charge and you are under no obligation to join our program. The goal of the program is to have you pay off your reduced debt for far less than what you owe today, INCLUDING ALL of our costs to provide this service. |
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Is it legal? |
| Definitely! You have the right to appoint a third party to represent you in debt matters. While we are not attorneys and we do not furnish legal advice, our negotiators have settled debts with the largest credit card banks in the nation on behalf of clients for the past 8 years. |
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What are the tax consequences? |
| Banks are supposed to report canceled debts exceeding $600 to the IRS and you are supposed to report the same as income on your annual tax return. However, the IRS permits you to write off any “income” from canceled debts up to the amount by which you were “insolvent” at the time. So unless you have a positive net worth, which is highly unlikely if you’re deep in debt, then you ordinarily won’t have to pay taxes on the forgiven amounts. You should consult your own tax advisor for advice specific to your situation. |
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What about lawsuits? |
| Lawsuits happen less frequently in debt matters than most people think. Some debtors fall behind, don’t make any payments for years, and never hear from a single attorney. Of course, creditors certainly have the right to sue you to recover their money. But the purpose of the lawsuit is to force a settlement on the matter. In other words, the creditor is just trying to get paid. Accounts that have reached this stage can still be successfully settled, provided the client has sufficient funds at the time. Otherwise, most creditors are amenable to renewed payment arrangements in such a situation. The worst-case scenario is that a client might have to pay back the balance in full on that particular debt. |
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Can my wages be garnished? |
| A common tactic used by aggressive debt collectors is the threat of wage garnishment. If you’re already struggling financially, nothing is scarier than the prospect of having money taken out of your paycheck without permission. Collectors try to make it sound like this will happen on your very next payday if you don’t send a check immediately. This, quite simply, is false. The creditor first has to sue you, obtain a judgment, and then file for a garnishment action. See Question No. 5 above. If you’re willing to work with your creditors, wage garnishment can normally be avoided. |
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Can I do it myself? |
| Yes, however it takes a skilled negotiator with years of experience to get the best reduction on your debt. You also lack leverage with your creditors. If you owe just $20,000 to a creditor why would they just allow you to only pay half? If you file for bankruptcy they loose the $20,000. This is a very small amount of money to them. For our company we have a great deal of leverage because we can offer many debts to them at one time. So for example we could bring 10 debts equal to $200,000 to them. If all of these people were to file for bankruptcy the creditor would be out $200,000. On the other hand if they negotiate with us they will be able to recoup at least a portion of the money due to them. Again, this is just an example, but it demonstrates why we can be far more effective compared to a do-it-yourself'er or even a small debt negotiation company. |
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| DID YOU KNOW, "U.S. Financial Freedom" IS DIFFERENT FROM DEBT CONSOLIDATION? |
| By consolidating your unsecured debt with a home equity loan, you run the risk of losing your hard earned assets if you default on your payments. You will still pay the full balances on your unsecured debt and must have a low debt-to-income ratio to qualify. |
Debt Consolidation also called a consolidation loan, is the replacement of multiple loans with a single loan, often with a lower monthly payment and a longer repayment period. |
The FTC defines Debt Consolidation as: You may be able to lower your cost of credit by consolidating your debt through a second mortgage or a home equity line of credit. Remember that these loans require you to put up your home as collateral. If you can't make the payments - or if your payments are late - you could lose your home. |
What's more, the costs of Debt Consolidation Loans can add up. In addition to interest on the loans, you may have to pay "points," with one point equal to one percent of the amount you borrow. Still, these loans may provide certain tax advantages that are not available with other kinds of credit. |
| Source: Federal Trade Commission, "Facts for Consumers" |
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How does Debt Management work? |
| Debt Management is similar to Consumer Credit Counseling; both negotiate your interest rates and terms to a lower amount. Typically if you had a credit card with 20% interest, paying minimums would take 20-40 years. With Debt management, that would turn into a 8-10% card with a term of say 4-5 years, payment about the same, and it will be paid off in that short timeframe without negative impact on you credit, because you stay current on your accounts unlike Debt Settlement. However, while in the program you typically cannot acquire more unsecured loans but can get home and auto loans. |
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Interest Rate Negotiation? |
| Interest rate reduction or Debt Negotiation is the same thing. This is a program designed negotiate better interest rates with your credit card companies, thus helping to lower your monthly minimums and pay off your debts faster. Typically this helps your credit rather than hurt it because more of your payment each month is now going towards principal rather than interest. Most are very successful. We guarantee to save you at least 2000 dollars in interest fees or we issue you a full refund. No questions asked policy!
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