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The DOs and DON’Ts of Debt Consolidation

July 17, 2014 by illinois

If you are looking to get rid of your debt, you might not have thought of taking out another loan.  These loans, called debt consolidation loans, can potentially pull you out of a sticky financial situation.  Below, you will find what you should and should not do when making this important decision.

Dos and Don’ts of Loan Consolidation

The DOs

DO know your FICO credit score, and DO get your credit report.

Your ability to get a loan, as well as your interest rates, are based on your FICO credit score.  The three credit reporting agencies of the United States, Experian, Equifax, and TransUnion, are required to provide you with a free copy of your credit score at least once per year.  Below are the ranges for credit scores, and what they mean for you.

300 to 499 – Very poor credit.

500 to 579 – Poor credit.

580 to 619 – Low credit.

620 to 679 – Average credit.

680 to 699 – Satisfactory credit.

700 to 850 – Excellent credit.

If your score falls above the “average” range, it will be easier for you to apply for loans.  This is because you have shown that you pay off your debts in time, and have probably never before defaulted on a loan.

DO keep in touch with your credit card company.

If you have a high credit score, make sure you contact your credit card company to see if you can lower your interest rates.  You might be surprised at what they can do.

DO seek advice.

Credit counseling agencies are places that offer advice for rates that are typically low, and affordable for the average person.  After making sure your agency of choice is reputable, you can go in, be assigned a credit counselor, and have another opinion on what to do next with you finances.

DO talk with your mortgage holder.

If you are having trouble paying your monthly mortgage, your mortgage holder may be able to help.  If he or she has a good reputation, he or she can probably extend your payment term until your money is, once again, stable.

Another idea to consider would be refinancing your loan, which could lower your payments based on your home’s worth.  It’s surprising how much money you could save, with just a short meeting.

DO get rid of debt.

One of the downsides to taking loans is debt, which should be paid as quickly as possible.  If you feel it would be feasible, try to set the monthly payment on your loans as high as possible in order to avoid elevated interest rates and prolonged payment periods.  Paying ahead of time, too, is a common action of many responsible loan holders.  In essence, paying more in the beginning can save you hundreds down the road.

DO get the best deal.

Don’t just take the first offer you find.  In order to find the best option, you might spend a few weeks “shopping around,” comparing initial payments, interest rates, and payment plans.  Only make a final decision after you have examined the offerings of three or four different lenders.

The DON’Ts

DON’T neglect other options.

Before you sign a loan that holds a payment plan of seven to ten years, you might want to take a look at your current financial situation.  If you’re not in a bad place, you might want to take into the thought the option of what banks call “snowballing” your debts, or paying them off as fast as you are able.  To do this, you should pay as much as possible on the debts that have the highest interest, while only paying the minimums on those that don’t have as much.  Some people who have done this have become debt-free in less than two years.

DON’T do balance transfers without research.

While your balance transfer card might offer a 0% APR at first, be aware that the rate could skyrocket to over 20% over the course of a few years.  This is not a problem if you have paid off your balance before that time, however it could spell danger if you are not aware of the length of the low, introductory rate.

DON’T sign up for any management plans.

While getting a credit counselor is a good idea, don’t allow them to convince you to sign up for a debt management plan.  These can often extend your payments to five years or more, and might cost you all of your credit cards.

DON’T take from your life insurance.

More often than not, pulling money from your life insurance could make for higher taxes and, as a result, more debt than the amount with which you began.  Also, you are denying your beneficiary money that might be more than needed in the future.

DON’T get the wrong loan.

There are two types of debt consolidation loans: secured and unsecured.  Secured loans, like second mortgages and home equities, are held by an asset that can be taken if you do not make your payments in time.  Unsecured loans, like normal mortgages, do not put any of your property at risk.

In all, be wise about what you do and do not do with your debt consolidation loans.  As long as you are willing to take the time to find the option that is the best for you, you can find yourself happy, free, and out of debt.  Stay on top of your finances, in order to keep them from getting on top of you.

Filed Under: debt consolidation, debt consolidation loans Tagged With: debt consolidation, Dos and Don’ts of Debt Consolidation, Dos and Don’ts of Loan Consolidation, Loan Consolidation

Process to File Bankruptcy in Illinois

May 26, 2014 by illinois

If you are considering filing bankruptcy and live in the state of Illinois, there are some facts you will need to be aware of before going through this process. Read through the following important information to file bankruptcy in Illinois.

File Bankruptcy in Illinois

Bankruptcy Acts

There are some financial acts that cover the process to file bankruptcy in Illinois, as well as other states in the US. It is a good idea to become familiar with these to determine if you qualify and what debts are covered.

  • Credit Counseling Act (2005). All consumers that file bankruptcy must participate in credit counseling in the six months prior to filing for relief. They must also complete financial management courses once they file bankruptcy in Illinois.
  • Means Test (2005). To determine if you qualify for either Chapter 7 or if Chapter 13 is needed, all income sources, expenses and debts will be considered. The bankruptcy court will analyze your average household income for the preceding 6 month period and then compare it to the median income for the state. This will determine which chapter is applied to file bankruptcy in Illinois.

 

Paperwork Required to File Bankruptcy in Illinois

When beginning the process you will need meticulous itemization of all your income sources, as well as some other records. Be prepared with all the following information to file bankruptcy in Illinois.

  • Financial Transactions. All major financial records for the previous two years will be required.
  • Living Expenses. Proof of living expenses for a one month period.
  • All Debts. This includes secured as well as unsecured debts owed.
  • Assets. This covers any property or possessions that could be sold and converted to cash.
  • Tax Returns. Courts require a two year tax return history.
  • Deeds and Titles. This applies to real estate holdings that are owned outright and any automobiles that are fully paid off.
  • Loan Documents. Any outstanding loan documents will be needed to determine level of debt and terms of repayment agreements.

 

Steps to File Bankruptcy in Illinois

When all the above documents and information are consolidated, the time has come to determine if any of your property falls under the Illinois seizure exemptions. A two page petition is then filed with the Illinois court by either yourself or your lawyer. There are also several more forms that are necessary to complete the process to file bankruptcy in Illinois. All this paperwork and forms are meant to represent your financial status currently. It is imperative that they be accurate and completely honest, or your petition could be rejected.

There are fees involved to file and you need to be aware of these before you file bankruptcy in Illinois.

  • Chapter 7. The fee for Chapter 7 bankruptcy is $306. You may be able to arrange installment payments, but this fee is not eligible to be waived.
  • Chapter 13. The fee for Chapter 13 bankruptcy is $281. It is ineligible for waiver as well.

 

Requirements for Chapter 13

Those that are eligible for Chapter 13 bankruptcy must submit a proposed plan of repayment. Monthly expenses that are reasonable are subtracted from your income, leaving an amount that could be applied to debt that is outstanding. Taxes and child support are considered priority debts that will be paid entirely, while other unsecured debts will be negotiated for settlements at less than the amount owed.

When you file bankruptcy in Illinois, your repayment plan must meet these requirement:

  • Good Faith delivery.
  • Unsecured creditors should receive the minimal amount covered under Chapter 7 regulations.
  • 100% of your disposable income is applied to the repayment plan for a minimum of three years. The court usually insists on wage garnishment to ensure this requirement is met.

 

Final Steps to File Bankruptcy in Illinois

  • Automatic Stay. Once you have been completed the process to file bankruptcy in Illinois, you are protected immediately from further contact by creditors or any foreclosure actions against you.
  • Bankruptcy Trustee. When you file bankruptcy in Illinois, the court immediately assumes legal management of all outstanding debts and the property and possessions not covered under the state exemption list. A court appointed trustee then fastidiously analyzes and reviews all documents and paperwork that you have filed with your petition. They are also able to challenge any portion of your petition.
  • 341 Meeting. Section 341 of the Bankruptcy act require that a meeting between the court appointed trustee, creditors and petitioner be arranged. Generally, this occurs about 30 days after you file bankruptcy in Illinois. Occasionally, in Chapter 7 cases, creditors may choose not to attend. If objections to any aspect of the plan or exemptions are raised, the trustee can negotiate. When conflicts cannot be resolved the bankruptcy judge will rule.
  • Discharge of Property. All non – exempt possessions and properties are sold by the trustee and the money is then applied toward your debt. Occasionally, low value property is returned to you.

Filed Under: debt consolidation, Debt Settlement Tagged With: Bankruptcy in Illinois, File Bankruptcy, File Bankruptcy in Illinois, How to File Bankruptcy in Illinois, Illinois Bankruptcy

Cash Advance Debt Consolidation

February 23, 2014 by illinois

You might want to take out cash advance loans as they do seem like the right option for your cash needs on a short term. The claim of these loans is usually that they will help us in times of financial needs and that it will help you to save up some cash for times of needs but the truth is a bit different. These cash advances are really not as convenient as they might seem and they usually get you under high debts that are hard to pay off.

Cash Advance Debt Consolidation

The Loan Debt Trap:

If you take a cash advance loan, you end up getting deeper into debt. The term debt trap means that you think you’re making things easier for yourself taking an advance cash loan but it’s a trap because in the end it’s also a debt. So you’re piling them on yourself. At the end you end up paying more than what you initially did.

High interest rates are the reason for making cash advance loans a debt trap. Cash advance loan needs a payback in a very little span of time like a about one or two weeks. On your final due date of the advance loan you have to pay back the whole amount plus the fee added. The high fee is tricky and difficult part.

Different lenders have different free. Most of them have like thirty dollars on every hundred dollars you lend. As per the lenders demand, this fee varies mostly in range between $10 – $30 for every $100 dollars. Dome lenders have higher rates unless they are stopped by legal authorities.

A range between 300%-800% is the annual average interest for these cash advance loans in most states. If you don’t pay the full amount you pay the fee and extend your repay a week or two.

Getting out of the trap:

Once you have ended up with some cash advance loans you start thinking about how to get out of it and balance your financial situation. Cash advance loans have full repayment at once which makes it differ from credit cards and some other types of loans.

Luckily there are solutions available to get you out of this hard condition. The first step towards getting things right is by cash advance debt consolidation.

This procedure starts with discussing with the creditor. Because of the very high amount of fee it is likely that in the end of payback of your loan you pay more than the total amount of the loan. At that time, you will need someone to help you out getting back on track.

Cash advance debt consolidation through discussion begins with requesting for lower fee and a step by step repayment plan. Payday lenders are required to accept this request and accept a gradual repayment plan for you. So you can get the situation on uphill from here by professional negotiation.

Negotiations can proceed with making a payment plan or lessening interest by requesting a settlement. A settlement works by requesting a lesser principle amount. With loans, you are prone to wind up paying great past the beginning rule regardless of the possibility that you repay it back in two months. Settlement can help you figure out how to clear the debts without further inconveniences by making an arrangement that makes the loan affordable

Benefits of Consolidation and Settlement:

As soon as you decide that cash advance debt Consolidation and settlements are the best solution for you, you will start getting benefit from it.

The most prominent benefit is that you get debts that’s are more affordable and will help you get out of this whole scenario. for instance if you have fallen for a debt trap promising quick cash you need help to get out of that. Consolidation and settlements will help you to get out and beyond of the debts while the solutions remain affordable for you.

Another advantage is that your credit score gets higher. You will definitely have to start working hard on maintaining a good credit score but as soon as you start the settlements, the rating will start increasing and improving almost at the same time. a negative effect if there for a short time period and will eventually improve  with every month that passes. When you get the debt pay backed you can start focusing on other bills that’s will start making your score better and improve.

Cash advances can no doubt be difficult to cope up with once they get huge and out of control. But for your advantage, there are two things named as consolidation and settlements which can help your situations and in the span of a short time all you’re problems will be solved and hence you can be debt free of cash advance loans as well as other debts you may be under.

Filed Under: debt consolidation, debt consolidation loans Tagged With: Cash Advance, Cash Advance Debt Consolidation, debt consolidation, debt consolidation loan

Legitimate Debt Consolidation Loans?

February 9, 2014 by illinois

There are a number of agencies that advertise the ability to consolidate and reduce debt. We have all seen the commercials with customer testimonials that boast how a debt consolidation loan saved their credit and even their home. When you are facing mounting debt and struggling with credit issues, these advertisements are enticing. However, these loans are not necessarily viable options for everyone.

Legitimate debt consolidation loans are only found through investigation because there are predatory companies that make big claims and can cause more financial strain than assistance. These companies will charge high and unnecessary fees and make following the program nearly impossible.

Legitimate Debt Consolidation Loans

Debt Consolidation Programs

The most common method of debt consolidation is that you take a loan from a participating lender with lower interest rates than many of your other debts and make one payment over an established period of time. The money is used to pay off the current debts. Legitimate debt consolidation loans are often offered by a local credit union or banking institution. A good credit score is usually a qualification for these types of loan facilities.

Another option is a peer-to-peer lender such as Lending Club or Prosper. These are organizations where individuals fund the loans. These are ideal for those who have high interest debt with large balances. Many people face credit card debt with 20%interest on $10,000 balances. These loans are offered at a much lower rate that would prevent you from damaging your credit over slow or late payments and would save you money in the long run.

The debt consolidation loans that are commonly offered by private institutions and debt relief companies are the loans where the agency settles your accounts and pays the debt for you. These are called debt repayment plans and you must take care when investigating a company that offers this service. Legitimate debt consolidation loans with these companies involve you making one payment made out to the institution and they distribute the money among your creditors. These are controversial but there are reputable organizations out there.

The third way to manage debt is to open a new credit card and transfer all of your credit card debt into the new account. These cards are typically 0% interest for 12 to 18 months and they can help give you a chance to pay down the debt without increasing interest fees. It is important to read all of the fine print and understand the introductory guidelines for these programs. Should you have any questions, ask a financial advisor before committing to such a program. These work best if the debt can be paid off before an interest rate will be added to the account.

Secured Loans

Legitimate debt consolidation loans can be either unsecured (as the previously mentioned programs suggest) or secured. A secured loan is one where you must have collateral that is of some value. Homes are commonly used for collateral and due to the high risk these loans usually come with a lower interest rate. The risk is great because the lender reserves the right to collect the collateral on any defaulted loan. This means that if you run into problems making your payments, poor health or job loss, then your home could be foreclosed upon and you would lose the asset as well as accrue fees for financial recovery.

Restoring your credit and paying off high interest loans are crucial to financial success. The less money paid in high interest or expensive, unnecessary late fees are money that can be saved for retirement or a child’s college fund. Good credit has become very important in our society. It not only determines your interest rate on credit cards or major purchases such as cars and homes but it is also used to regulate rates on things like insurance and sometimes even utility discounts. There are many companies that require their employees to have an average to above average credit rating in order to work in their company. Credit scores are becoming identifiers and it is important to maintain a healthy credit score.

If you decide to go with a legitimate debt consolidation loan then it is important to put a plan into place that will prevent financial decay for the future. A budget should be created and managed and it should be re-evaluated as needs change. Once we clear out bad debt we begin to feel tempted to find ways to run up more debt. The biggest change needs to come with how you manage your money. Take time to evaluate what got you in the position that you needed to choose debt consolidation and indentify ways to better handle your bills and create a plan for emergencies. There are financial advisors that can assist you with making a reasonable and workable plan for money and debt management. Dedication and commitment to the plan will aid in your financial freedom.

Filed Under: debt consolidation, debt consolidation loans Tagged With: debt consolidation in Illinois, debt consolidation loans, Legitimate Debt Consolidation Loans

Ways to Solve Your Debt Problems

September 26, 2013 by illinois

Debt Problems

The most prevalent trouble that people are involved in is called debt. Your debt problems can cause many problems with a relationship as well as both physically, emotionally. There are many times that people don’t even realize there are options to help overcome your debt problems.

Ways to Reduce Debt Problems

There are many ways that people will talk about reducing their debt problems. However there are a few well known options that can offer the most success. There are companies designed to help you through you debt problems. These debt management companies offer several options such as

  • Debt Settlement
  • Debt Consolidation
  • Renegotiation
  • Bankruptcy

Each person must decide for themselves which program that can help their debt problems the most. Using a debt management company can offer benefits that you could benefit from. A credit counselor can help you assess your debt as well as help you to find a solution that fits your budget. They can help through creating a budget to help you learn what you can afford. They are able to negotiate on your behalf to the creditors to help a person reduce their total debt. This can decrease your required monthly payments. Several of the options involve a counselor taking your payment made to them and dispersing it to your creditors based on an agreement.

Debt Settlement

A debt settlement is one of ways to end your debt problems. A debt settlement is when you use a third party to negotiate with your creditors. The third party can help to reduce your debt and can offer settlement options based on what’s best for your budget. When it comes to debt settlement your creditors can pick one or two options. First they can either compromise on a settlement which will be less than what they wanted. The alternative is to lose the entire debt, this happens when a person has been unable to fix their credit and they file for bankruptcy. For this reason you creditor are able to work with your debt management counselor to reduce your debts up to 50% sometimes. This is one way to ensure that your debt problems don’t hurt your credit any further. This is one of the fastest ways to become debt free.

Debt Consolidation/ Debt Consolidation Loans

Debt consolidation programs are another way for someone to deal with their debt problems. This form of debt management can also be handled by a management company. This is different than a debt settlement. Debt consolidation is designed to reduce payments or payoffs. The debt management counselor will also act as your negotiator in this situation. After principals, interest, and fees have been lowered the counselor will act as the in between. An account is set up for you to place your monthly payment into and the debt consolidation company will then disperse the payment amongst your creditors.

A debt consolidation loan is very similar to participating in a consolidation program and can help with your debt problems. The debt management company will help you to reduce the debt you owe your creditors. Rather than having an account and letting them disperse the money, you obtain a loan that’s used to pay off the negotiated debt amounts. This will combine all of your debts into one payment, by leaving you with one debt. This loan can be lower interest than any of your current debts. Another positive to gaining a consolidation loan is that there are no negative effects to your credit.

There are some drawbacks to working with a debt consolidation company, and the Federal Trade Commission suggests against it. There have been cases where the management company has not made the payments on your behalf, or paid considerable fees that weren’t necessary. Remember that you should always be cautious and research the company that you choose to use to help you with your debt problems.

Renegotiating

When looking into renegotiating with you creditors to help reduce your debt problems it is important to have a goal in mind. The purpose of renegotiation is to reduce your interest rates to a very low number compared to your current interest rates. These interest rates can commonly be the main cause to your ever increasing debt problems. It can be troublesome to try and negotiate on your own, however it can be done. New terms and even new policies can be implemented in order to allow you to make your payments on time.

Bankruptcy

This option someone thinks about only if all other avenues have been exhausted. Fixing debt problems with bankruptcy can cause you to have a lot of negative repercussions. You will have bad credit for 7 to 10 years with little to no chance of recovery.

Be sure that the option that you choose is the one best suited for your debt problems.

Filed Under: debt consolidation, debt relief, personal finance tips Tagged With: Bankruptcy, debt consolidation, debt consolidation loan, debt problems, Debt Settlement, Solve Debt Problems

Understanding Debt Consolidation Lenders

September 18, 2013 by illinois

debt consolidation lenders

It is important to look for debt consolidation lenders before you have any credit problems to get the better deal. The idea is to group all your existing debt into one payment, and that payment should reduce the monthly payments that you are making. This will make paying off your debt cheaper. The interest rate should be lower meaning that the total overall debt will be reduced than if you had done nothing.

To get the best rate from a debt consolidation lender then you need to have a great credit report, this will ensure that the loan that you are offered will have the lowest interest rate possible.

What Is A Secured Loan?

A secured loan is a loan that is tied to an asset; it can be a car or your home. If you fail to pay the loan then the debt consolidation lender can sell that item to pay off your loan. If it is your home then you will find yourself homeless and it will not matter if the value of the home is higher than the debt, they are just looking to recover the costs and you will not be entitled to the difference it will be sold off. It is possible for your home to be sold off for a fraction of the amount that it is worth.

What Is An Unsecured Loan?

An unsecured loan means that you do not have to lose the possession of your home or car if you default on the loan. But what you will face is higher interest payments. The risk is higher that you will default and this is then reflected in the rate of interest that will be offered if you are accepted for the loan. The better your credit report the lower the interest rate that you will be offered.

Being Approved

It is important to realise that if you are looking for a consolidation loan that the companies are going to think that you are having problems with your loans at the moment, meaning that they are going to see any consolidation loan as a higher risk loan.

The debt consolidation lender will look at your position carefully and will need to assess if you can afford the loan. It will delay the time that it takes for the loan to be processed. They will want to study your credit report to see if there are any problems that could indicate that you are a high risk of default.

You might be asked to provide some information and this can include:

  • The last few years tax return
  • Financial statements from your bank
  • Application for credit
  • Proof of your income

They will want to know about ay debt that you already have including:

  • Credit card debt
  • Personal loans
  • County court judgments
  • Car loans
  • Mortgage payments or rent

It is possible that if you are approved for the loan that they request certain conditions that will need to be adhered to otherwise you might be asked to repay the loan sooner. Those conditions can relate to the closing of credit cards after they have been paid off.

The debt consolidation lender must prove that they have taken your circumstances under review and that you can afford to pay the loan and that they haven’t made your financial situation worse than it already is. This is called due diligence and is sometimes used as the reason for the credit being rejected.

Bad Credit

It is possible to obtain a consolidation loan even if you have got a bad credit report. It will reflect badly in your circumstances and it will mean that you will need to pay higher interest rates than if you had a great credit file. It will have a negative impact on the product that you will be offered. You will need to check that the loan will pay off all your debts and will be cheaper than if you continued paying them individually. It has been known that a debt consolidation loan to have higher interest rates than what you have got already. So it is important to have this information to hand and to make sure that the product that they are looking at offering you will in fact save you money each month and not make the situation worse.

Make sure that the company that you choose to do business with is a respected company and that they are going to help you. Some companies are better at helping than others and it is important that you are able to research the company to find the best one for you.

Therefore if you are considering getting a debt consolidation loan that you have all the information from your debts so that you can compare the product that is being offered. You are looking at reducing the payments and the interest that you are paying.

Filed Under: debt consolidation, debt consolidation loans Tagged With: Bad Credit Loan, debt consolidation, debt consolidation FAQs, debt consolidation lenders, Secured Loan, Unsecured Loan

Understanding Debt Consolidation vs. Debt Settlement

September 2, 2013 by illinois

debt consolidation vs. debt settlement

When you have gotten behind in your bills, putting off those payments mean fees and increase in amount owed. This is how one gets into debt. When your debt is overwhelming, many people look into ways to get rid of their debt. Two of those ways are debt consolidation or debt settlement. If is important to compare debt consolidation vs. debt settlement to determine the best for you.

Debt Consolidation vs. Debt Settlement in Loan Removal

There is a big difference between how the companies handle the debt. Both companies do remove debt from your credit report.

  • Debt consolidation has two main options regarding how it deals with reducing your credit. You can choose to make payments to your debt relief company and they will split that into each of your creditors. The other option is to pay all your debts at once through a low interest loan and only have one payment due per month.
  • Debt settlement is different in the aspect that you negotiate a reduced payment for your debts. You or a settlement company can negotiate with creditor to reduce your payments. At which time you can make a lump sum payment, or paying off the left over debts quickly.

Debt Consolidation vs. Debt Settlement on Credit Score

The credit score troubles you have with extensive debt will be changed when using either of these debt relief approaches.

  • Debt consolidation tends to have a balancing effect when it comes to your credit score. When you take out the consolidation loan you will be effecting by adding a debt. However, as you close the other account, with a paid off status, you will gain some points back. Here is where the balance came in, you will become in good standing quicker and it won’t reduce your score much.
  • Debt settlement can be a huge hit to your credit. When the accounts care labeled as “settled” this is a negative mark on your score. This can make you unable to gain new credit for several years. There is however subprime credit designed for those with bad credit and trying to recover or regain a positive credit score.

Debt Consolidation vs. Debt Settlement and Interest Rates

One of the biggest things that add to your overall debt is the interest rates. Usually with consumer or credit debt your interest rates are extremely high.

  • Debt Consolidation offers the possibility of reducing your interest. With debt consolidation the credit counselor will negotiate on your behalf with the creditors to reduce the interest rates. The credit counselor can also help you to find a low interest loan if you choose that option.
  • Debt Settlement has the ability to reduce the interest that is paid. As debt settlement reduces the total cost that you’re paying, therefore it will reduce the amount of interest paid. You’re able to settle a reduce amount that can include reducing the amount of interest that needs to be paid.

Debt Consolidation vs. Debt Settlement Programs

When you’re looking at the different programs available there are some facts that you want to consider about each type of debt relief.

  • Unwanted calls from creditors: With each program there is the possibility of stopping those calls. The debt relief company that you choose will try to negotiate in order to stop all collection activities; however the creditors are legally allowed to contact you.
  • Maintain my privacy through the proceedings: The answer is yes. Both through debt consolidation and debt settlements you’re able to maintain privacy.
  • Taxes: When you pay off things or purchase large things you can sometimes be penalized or required to pay taxes. With debt consolidation there are no extra taxes that one is required to pay; however you may be asked to pay taxes on any amount that you have been forgiven of when going through a debt settlement.
  • Program Fees: There is no set fee structure that is to be followed. So no matter which program that you participate in the fees will vary. However some fees you might see in the case of debt consolidation are enrollment fees, representation fee, monthly fees, even the possibility of a closing fee. Debt settlement is a bit different because you will home more one time fees rather than monthly. For example you can have a success fee, or negotiation fee depending on the services that you use.

Each person has different reasons for being in debt; each person has different ways of getting out of debt. The same is true of debt relief programs each one is different, and each company is different as well. Be sure to choose the program that is right for you and ask questions be sure to know all the facts about the program and the company that you choose.

Filed Under: debt consolidation, debt consolidation loans Tagged With: Debt Consolidation or Debt Settlement, Debt Consolidation vs. Debt Settlement

Illinois Debt Consolidation: Where to find help

August 25, 2013 by illinois

illinois debt consolidation

If you are looking for help with you debts but are unsure where to look for help, then Illinois debt consolidation might have the solution for you. It can be a way of taking back control of your finances, making debt easier to handle, getting some of the fees removed or just to stop the creditor’s phone you demanding money that you haven’t got.

Illinois Debt Consolidation: The Options

The options that are opened to you are to sort the situation yourself or turn to a debt consolidation company. It is possible for you to work out all the money that you owe and to apply for a consolidation loan, the money that you receive will then be used to pay of the creditors. Or alternatively you find a company that will do the work for you.

You will be able to choose from 2 types of loan, a secured option, this means that if you default on a payment then the item you secured the loan against, usually your home, can become the property of the company that leant you the money. This type of loan is usually cheaper in the amount of interest that you will be charged. The other option is an unsecured loan, if you default on the loan they will not take ownership of an item like your home, but you will pay higher interest rates for this type of loan.

If you decide to sort out your own debt then you will not have to pay a company on top of the money that you already owe to your creditors.

Illinois Debt consolidation Companies

If you are looking for an Illinois debt consolidation company then you will need to consider a company that has an accreditation from the BBB, better business bureau. These companies have agreed to follow a set of principles that will safe guard you from companies that do not have your best interests at heart.

They will look at the situation that you are in at the present time and put forward their plan of how they can help you. Once you agree to the plan the company works on your behave and contacts your creditors to negotiate lower payments. This plan will be long term, but most companies look to completely eradicate the debt within 6 years. You will be required to pay the company an amount at the beginning of the plan and then every month you will pay them an agreed amount this will be split to pay your creditors every month and a proportion to the debt management company too, they do not work for free.

Loans That Can Be Consolidated

  • Any credit card debt.
  • Any pay day loans that you might have.
  • Any unsecured personal loans that you have taken out.
  • Any student debt that you have accrued.

Credit Score

If you are thinking about getting help an Illinois debt consolidation could be the answer but it will have an effect on your credit score. If you work by yourself and take out a debt consolidation loan then you will find that your credit score goes down but this is because you have taken out a loan. If you work with a debt consolidation company then your credit score will go further down because this will have an effect on your credit rating too. But they are both temporary measures, the more that you pay off your debts the better that your score will become.

Avoid While In Debt Management Programme

It is best to avoid certain situations that can have a negative effect on what you are trying to achieve.

  • Don’t close a credit card when you have paid it off, don’t use it either.
  • Don’t transfer any balances to new cards, no matter what the offer is.
  • Don’t open or apply for a new credit card.
  • Don’t spend more than the budget that you have set up.

These can do more harm to your credit report and it will not help what you are trying to achieve with the help and support of the debt consolidation company.

Benefits of Illinois Debt Consolidation

There are some really positive benefits if you are considering going down the route of Illinois debt consolidation and they can be very positive.

It is possible to make your life and the debts that you have to be simpler than you ever imagined they could become. The interest rates that you pay will also be reduced; this will mean that you monthly payments will be lower and more manageable. But it might be over a longer period of time that you are repaying the debt. There is some possibility that you might find that you are eligible for some tax deductions and this is always a welcomed possibility.

Final Options

You have more than one choice and that is to seek help or go alone with debt consolidation or you take further advice and look at the possibility of bankruptcy.

Filed Under: debt consolidation Tagged With: Benefits of Illinois Debt Consolidation, debt consolidation in Illinois, illinois debt consolidation, Illinois Debt consolidation Companies

Debt Consolidation Loans in Illinois

August 10, 2013 by illinois

Debt Consolidation Loans in Illinois

The problems with the economy including unemployment, cut backs to working hours and the reduction in house values in many areas has made it difficult for many people to keep their finances on track. There has been a lot of debt put onto credit cards over the last few years and this has reached a point that people are having trouble keeping up with the level of debt that they have accumulated.

Debt Consolidation loans in Illinois are a way that people can help to get their finances in better shape. There are many different forms that these loans are available in so you need to be careful to consider the positive and negative aspects of each type of loans so that you make the appropriate choice for your situation.

Types of Debt Consolidation Loans Available in Illinois

The traditional provider of loans is of course the bank and they can offer loans to you particularly if you have prior history with the bank you apply with. Let’s look at the positives and negatives of a bank based debt consolidation loan in Illinois.

  • Low interest rates with a range of terms that are very favorable when compared to most other lenders.
  • Will be unlikely to loan without security if you do not have a good credit score and clean credit history.
  • If they rate you as a credit risk then they will not offer low interest rates.

Credit unions are less conservative than banks and are able to still offer reasonable rates even on unsecured loans.

  • Less stringent than most banks and are prepared to accept more risk.
  • Interest rates and terms are much better than those paid on credit card debt which is the largest problem most people in financial distress need to deal with.
  • Have more experience with debt consolidation than banks so can be a better option.

Pay Day Lenders have rapidly expanded business as they use advertising and the ability to get smaller loans quickly.

  • Fees and interest rates are high and penalties if you are late or miss a payment can be crippling.
  • Terms are very short and while they might be useful in an emergency if you are already in debt then they can be more harmful than helpful.

Debt Consolidation Lenders are specialist businesses that will offer you a consolidation loan that pays off all of your high interest loans such as credit cards.

  • Will deal with people that have a bad credit history.
  • Rates vary with risk and can lower payments considerably.
  • Gives you a single monthly payment making budgeting simpler.
  • In some cases you can end up paying significantly more than the original debt because of the term of the loan needed.

Alternatives to Debt Consolidation Loans in Illinois

There are a number of alternatives that people can use that involve the help of an organization that is skilled in the area of helping people get their finances into better shape. Here are some of the top alternatives to debt consolidation loans in Illinois.

Financial Counseling agencies are non-profit organizations that help people to repair their finances. They normally have budgeting information and can refer people to other agencies or educational courses if they are required.

  • Can help to negotiate with the companies that you have debts with.
  • Provide advice on ways to improve your finances.
  • While they are non-profit this does not mean they are free and normally have similar charges to for-profit organizations.

The final alternative to debt consolidation loans in Illinois are Debt Relief Companies. As their name suggests that are specifically set up to provide debt relief for people that are having financial problems. They operate in a similar way to financial counseling agencies with a range of options that they can use to help you get into a better financial position. The two main alternatives are listed below with information about how they operate.

Debt Management Plans are plans that the company constructs once they have all of your financial information and debt commitments. They will contact your creditors on your behalf and try to negotiate the best possible deal to pay the creditor back quickly and to fit within the confines of the debt management plan.

  • Provides step by step assistance in making a plan that will have your debt paid as quickly as possible.
  • Creditors see you are serious about paying your debt and will usually provide debt relief companies with favorable terms with reductions in interest rates, longer terms and forgiveness of fees and penalties.

Debt Settlement is an alternative to people that may be looking at bankruptcy. The debt relief company will take a mutually agreed monthly payment and attempt to negotiate with creditors to take partial payments to satisfy your debts.

  • An alternative to bankruptcy.
  • More acceptable to many creditors.
  • Allows people to rebuild their finances quickly once they get back to a better financial base.

Filed Under: debt consolidation, debt consolidation loans Tagged With: consolidating debts, Debt Consolidation Loans in Illinois, Illinois Debt Consolidation Loans

Using Balance Transfer As A Debt Solution

June 24, 2013 by illinois

As a debt solution, there is no doubt the effectiveness of balance transfer. However, like other debt relief options, you have to understand the whole process in order to benefit from it entirely. To help you with that, we will discuss in detail what balance transfer is all about and how you can guarantee that it can successfully provide you with debt relief.

Using Balance Transfer As A Debt SolutionBalance transfer, as the name implies will involve transferring your balance into a new account. This account is usually a credit card that is offered with zero interest. Do not get your hopes up with the zero interest because that will not last forever. It is just an introductory promo that has a minimum run of 6 months. It can take a year but that will depend on the credit card company.

Before you can transfer your balance, you need to be aware of the fee that you have to pay the new account. It usually varies but you can expect it to be around 3% of the amount that you will transfer. That is practically the only fee that you will have to pay to enjoy the introductory promo benefits.

The challenge in balance transfers will be maximizing the benefits of the zero interest period. You have to take advantage of this because any payment that you will make towards the debt will pay off your principal amount. No interest will be added despite the balance that will be carried over to the next billing cycle.

So to make this debt solution really effective, you have to maximize your debt payments. This can be done in two ways.

One is by living a frugal life. By cutting back on your expenses and spending only on the bare basic necessities, you can maximize your debt payment fund. A frugal budget may seem like the extreme but remember that you only have to do it for a short time. You should be able to make the sacrifice for a couple of months so that you can pay down your principal debt.

Another way to increase your debt payments is to grow your income. Get a second job or set up a passive income business. Most online ventures will not cost as much as their physical counterpart. All you need is a stable internet connection and a computer. Online stores will not be as expensive as a physical one and you can leave it open 24/7. If you set up an automated one, you don’t have to tire yourself too much managing it.

Getting an online job will also allow you to increase your income without having to spend too much time away from your family. Or you can use your hobby to earn money. If you love gardening, you can grow your own produce and sell whatever you and your family cannot consume. Offer to make furniture for your neighbors.

These are only a few of the concepts that you can implement if you want to maximize the benefits of balance transfer. You have to sacrifice for a short while because once the promo period ends, you can expect that the interest on the card will go to its intended high rate.

Filed Under: balance transfer, debt consolidation, debt relief Tagged With: balance transfer, debt relief, increase income, zero interest

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