http://articles.debtsettlementservicesplus.com/rss.xml A blog about debtsettlementservicesplus.com daily 365 1901-01-01T00:00+00:00 http://articles.debtsettlementservicesplus.com/?a=35802 <p>by Gregg Hall</p><p>Recently, the media has given a lot of attention to how important your credit rating is. The system of FICO, which stands for (Fair Isaac and Co.), was developed to help creditors determine how much of a credit risk you may be. These scores are determined by factoring in such things as amount of credit owed, length of time the credit was established and if any late payments were made. <br /><br />Even just inquiring about a loan can count negatively on a score. For people who have always managed to pay their debts on time, but suddenly find themselves in a position where they are no longer able to do so, this is devastating. Your credit rating determines if you will be able to buy a house, secure a credit card or even a job. Employers have taken to running credit reports on prospective employees, because they feel that it will indicate how responsible a person is. Even some insurer's have started to run reports, and may base your acceptance on how high your credit rating is. <br /><br />If you are suddenly unable to repay your debts and have suffered from lowered FICO scores, it is imperative to begin to repair your credit. Before you can start the repair process, you must seek a solution to being unable to pay your debts. Aside from trying to lower your expenses by trimming away unnecessary things such eating out or other forms of entertainment, you may also be able to get another job to make additional income to help you to pay off your debts. This isn't possible for everyone, particularly if they have been out of work due to an illness, or lost their jobs and went for a prolonged period of time before finding another one. Now their debts have gotten so out of hand that a second job will not be enough to cover the growing balances. <br /><br />Bankruptcy is an option that some people consider to help them out of their situation. The problem with bankruptcy is that it will appear on your credit report for 7 to 10 years, making it very difficult to restore your credit rating. There are also income limits and credit counseling classes that have to be taken, as well as costly attorney fees. In addition the government has recently taken steps to restrict the bankruptcy process.<br /><br />In an effort to help people with their debt problems, many creditors will now try to work with you to help you resolve the debt, by offering lower payments that you may be better able to afford. There are also organizations such as the United Way who has partnered up with Credit Unions, to help people find a way to repay their debts by consolidating them. If find yourself in this type of situation, contact the United Way to get the help you need to resolve your debts.</p><h3 class="popup">About the Author </h3><p>Gregg Hall is an author living in Navarre Florida. Find more about this as well as debt settlement at <a href="http://www.debtsettlementservicesplus.com/">http://www.debtsettlementservicesplus.com</a></p> 2006-09-23T15:57-04:00 http://articles.debtsettlementservicesplus.com/?a=35801 <p>by Gregg Hall</p><p>Most people who borrow money do so fully intending to repay the loan according to the agreed upon terms. Perhaps, at the time they borrowed the money, things in their lives were going well financially and having the resources to repay the debt was not a concern. <br /><br />Unfortunately, things can happen in a person's life that can severely change their ability to satisfy their debts, such as a death in the family or losing their job. For these people, not only do they have to deal with whatever tragedy has befallen them, they also have to deal with angry creditors who have no sympathy for their plight. <br /><br />People who find themselves in these situations feel frustrated because there really doesn't seem like there is a good solution. The companies that they owe money to constantly call them, or send their debts to a credit agency that may harass them even more in an effort to collect the debt. To get out of this terrible situation, some people may consider filing a chapter 7 bankruptcy with the hopes of wiping out their debt and starting over again with a clean slate. <br /><br />However, the new bankruptcy laws can make this difficult, since now there are income levels that must be met before this is allowed to happen. The people filing for them must also take credit counseling classes prior to the debts being discharged. Other people may consider filing a chapter 11 bankruptcy and pay the debts off over a period of time. The money is paid to a trustee of the court, but even though an effort is being made to repay the debt, it could still take a long time and in the meantime the person's credit is totally ruined for up to a decade.<br /><br />A third option is to try to settle the debt for an amount that is less than the one owed. It may seem like a good idea, but there are many things that the people who attempt this are not aware of. It's not easy to get a company to agree to accept less than the full amount due. Even if you do get them to agree, you are still not that much better off. As an example, if you owe a creditor $10,000 and get them to agree to accept $5,000, the additional $5000 left over is subject to taxation, since it is looked at as actual income that you received. Now you may be placed in a tax bracket that is higher than the one you are usually in and may have to pay extra taxes to the government, plus your credit is still adversely affected.<br /><br />It is far better to contact the creditor and see if they will work with you, perhaps lowering the interest rate or accepting lower payments to help you pay off your debt. This way you can repay what you owe and hopefully not make your credit standing worse than it already is.</p><h3 class="popup">About the Author </h3><p>Gregg Hall is an author living in Navarre Florida. Find more about this as well as debt settlement at <a href="http://www.debtsettlementservicesplus.com/">http://www.debtsettlementservicesplus.com</a></p> 2006-09-23T15:54-04:00