Credit Counseling, Debt Consultants, Debt Negotiators: Do Debtors Need Their Services?

Hi,
Credit counseling services are quite good at giving people an organized look at their financial situation. After that, their usefulness is limited due to the fact that they have absolutely no legal right to enforce their suggested remedies to any of the creditors. In general, the offers credit counseling agencies make to creditors are unrealistic and many times rejected outright by the creditors. Exploratory conversation is usually an effective way to initiate the process of finding solutions to problems. However, in most instances, credit counselors will only deal with creditors in writing. Therefore any successful re-negotiations of initial proposals are highly unlikely to happen. Additionally, in many cases, debtors are not informed by credit counseling agencies that they have no binding authority to get a creditor to accept a repayment proposal. Debtors may mistakenly assume that credit counseling agencies have more leverage and standing than they actually do when contacting creditors on their behalf. The information that debtors need is available from debt consultants and debt negotiators. These professionals charge either an hourly fee or a contingency fee based upon the money saved to the debtor. From the standpoint of a creditor, a long drawn-out repayment proposal is not a sensible solution to resolving the account of a debtor. Debt professionals have the ability to analyze various situations and offer solutions acceptable to creditors. Credit counseling services and debt negotiation companies tend to strike long-term relationships with debtors that are of little or no value to the people in debt. Most people who find themselves mired in debt have achieved this situation over a long period of time. A helpful solution for the debtor is a quick one. Not one in which the debtor is required to continue down the same road, repaying the debt over a long period of time, sometimes with the added cost of several thousands of dollars. Credit counselors have their place in the credit world, but are sometimes asked to do things they lack the experience or knowledge to accomplish, which can be a detrimental situation for the debtor.
Until later,
Alan

Taking a Financial Inventory After the Divorce Decree

Hi,
After the divorce is final and the court has decided financial responsibilities, it's time to take a financial inventory. Since all situations are different, this is a list of possible suggestions which may be of use:
1) Living situation: Should downsizing be a consideration? Depending upon the circumstances, some people find it comfortable and financial rewarding to get a room mate instead of selling their home.
2) Transportation: Can we comfortably maintain our present vehicle, or do we need to get a less expensive one?
3) Outstanding credit cards: Look at all credit cards and determine balances, and monthly payments. It is a good idea to reassess whether or not all cards are needed and if it is a good idea to eliminate some of them.
4) Check all incoming bills to make sure the name of the ex-spouse is dropped from the statements.
5) Check beneficiaries listed on policies and make changes where deemed applicable.
Tomorrow I'm going to write about a budget based upon current income and expenses.
Until then,
Alan

The Evolution of the Credit Department

Hi,
Credit departments have changed dramatically over the last thirty five years. In the past, credit department employees checked and assessed all aspects of credit requests and dealt with each request on an individual basis. The result of this hands on approach was that credit was only extended to people who could genuinely afford it. As a result, the number of delinquencies, charge-offs and repossessions was very low. Due to the human verification process, it was rare that information on credit applications was falsified. Computer technology redefined how credit departments work and how credit is granted. By using computers to compile statistical data, creditors have established various formulas with which to generically grant credit. These actions have caused a multitude of problems in the credit field. It has allowed unscrupulous borrowers to obtain credit that they can ill afford and in some cases, have no intention to repay. One of the other negative effects of this generic approach to credit is that many times people unknowingly obtain more credit than they can afford to repay, and which in some instances results in financial chaos. To cover the cost of these indiscretions, the credit industry has used higher interests, finance charges, late fees, etc., Tomorrow I will talk about various structures of credit departments.
Until then,
Alan

Credit Principles Past and Present

Hi,
If we thoroughly examine the way credit practices were carried out in the past, we will find solutions to many of today's credit problems. Many people who find themselves in current credit trouble are people who would not have been extended credit under past guidelines. In the past, people used unsecured loans to obtain needed goods or services. Therefore, it was worth their time and energy to go through the credit process to qualify for the loans. Very seldom were personal loans issued for such things as a trip to the mall, or a night out on the town. Credit cards are now easily obtainable, and people are enticed to spend money. Consumers are encouraged to utilize credit cards whenever possible in lieu of cash. The ease in which consumers can use their credit cards causes overspending which results in financial hardship. Some ways we can integrate past credit principles into our financial management techniques of today are:
1) Have the mindset that credit cards are personal unsecured loans and not cash.
2) Use credit for big ticket items and services.
3) Have a repayment plan in mind when making a credit card purchase.
4) The strongest credit principle from the past was that, in general, people didn't spend money they didn't have, and credit was extended carefully to people who could demonstrate that they had the ability to repay the loan.
Tomorrow we will talk about other types of unsecured personal loans.
Until then,
Alan

Talking About Debt

Hi!
Before you can talk about your debt, you need to get all the current balances on your existing debt. If you don't have your statements on hand right now, most information can be obtained from creditors electronically, i.e. the telephone or web sites. If you've lost your account numbers, usually your creditors will be able to access your accounts using your social security number. Once you get all your bills together, take out your monthly living expenses. We will address those first. In general, these bills do not have any emotional attachment to them, and as a result, are easy to talk about. However, if they are not handled properly, they will affect your entire household. Basic monthly living expenses include rent or mortgage payments, sewer, water, garbage, electricity, telephone, food, heat, internet connection service, medical co-payments, insurance, transportation costs, etc. If you're behind in any of your utilities, call the companies and make payment arrangements with them. If you are late in your mortgage or rent payments, you might consider asking your mortgage company or landlord for a different payment date. If making rent or mortgage payments is an ongoing problem, I will address that situation in a future blog. You will have a much brighter financial future by handling your monthly expenses in a timely manner, and quickly communicating with your creditors if you can't, due to the positive impact it will have on your credit scores.
Tomorrow we will talk about the other pile of bills.
Until then,
Alan
http://olympicdebtspecialists.com/

Scared to talk about debt?

Did you know that most people are afraid to talk about debt? Both single people and married couples find themselves avoiding their debts in a variety of ways including not opening their mail, losing their bills, and accidentally throwing away their credit card statements. Avoiding debt causes multiple new problems for people who owe money. Over the next couple of weeks, I'm going to blog about how to take that first step in identifying your debt problems, and what you can do about them. Tomorrow I'm going to tell you how you can begin to analyze your own debt.

Until then,
Alan