Archive for the ‘debt consolidation’ Category

Should you Consider Debt Consolidation – and Will it Hurt Your Credit Score?

Wednesday, July 30th, 2008

Lenders often encourage people to consolidate credit card debt by taking a second mortgage on their homes – thus spreading payments out over more years, generally at a much lower interest rate.

Sometimes the same company that issued your credit card will encourage you to switch to a home equity loan. They love it because this is a secured loan – unlike credit cards, which are unsecured. They also love spreading your payments out over a longer period of time, because then a larger percentage of each payment is interest (otherwise known as profit to the lender.)

The lender will point out that home equity loans are tax-deductible, so you’ll be saving money. Be careful with that one, as the rules have changed and you may have to prove that the home equity loan was used to make improvements on your home.

So… Should you do it?

The first question you must ask yourself is this: “Do I have the discipline not to turn right around and run up my credit card debt again?” If the answer is no, then no – you should not do it.

What will this new loan do to my credit score? That depends on question #1 – along with the amount of the new credit line you actually use.

For instance, if you have $50,000 equity in your home and are granted a second “revolving credit” line of $35,000, you have just acquired a higher amount of available credit – which is good for your FICO score.

However, if you use every bit of it, that’s not so good. FICO scoring is a bit of a mystery, but the overall consensus is that you should never use over 30% of available credit on any one account.

Can you eliminate those high credit card payments by using 30% of the credit available from your revolving home equity loan? Then it’s a good idea. From that point on, use your credit cards, but pay them off each month when the bills come in. And of course, never charge more in any one month than 30% of their available balances.

Get your credit report right here at and read it carefully. Add up the balances you owe, and consider how large your home equity loan would be. If it all makes sense, then check with several Second Mortgage lenders to compare interest rates and programs before you make a decision.

Can debt consolidation improve your credit score?

Wednesday, July 16th, 2008

There are a few options when you are trying to eliminate debt. You probably have heard of debt consolidation. This really is not the solution for getting rid of debt problems. In this article I am going to discuss five options and out of the five only one works the best.

Our option.
We provide a service that is a proven-debt elimination process to help you become debt free typically within 36 months. A service expert will design a debt-relief program that is right for your unique situation. This expert will assist you through the entire process.

Debt Consolidation
A debt consolidation solution is flawed. You borrow money to fix a borrowed money problem. Lenders and banks offer these programs because they make money. This is supposed to reduce your debt; all it does is prolong your debt.

Consumer Credit Counseling Services ( CCCS)
A credit card company originally created Consumer Credit Counseling Service (CCCS) in the early 1980’s to recover money from consumers that have fallen behind on payments. CCCS disguised itself as a non-profit entity to hide the fact they are actually a bank. Statistics show the more than 50% of the people that start this process fail to finish. CCCS seeks to collect as much money as it can and they charge the consumer a fee for the service, often under the heading of a voluntary contribution.

In 2005 congress passed a new bankruptcy law that made it tough to file bankruptcy. At times bankruptcy will be on your credit report for 10years. Not to mention all the fees involved with an attorney and credit counseling classes it usually requires.

Do nothing
This is not a good option. If you decide not to do anything you can count on the situation getting worse. Eventually you could be facing court orders which will ultimately result in wage garnishment or even judgments. If you are ready to take control of you financial destiny click here today!

Do you really need to file bankruptcy?

Sunday, July 13th, 2008

Current reports show that bankruptcy filings are at an all time high. This is probably due to the fall of the real estate sector, which affects everything. The way the current bankruptcy law is, does it really protect you and is it necessary? I personally don’t think bankruptcy is necessary for individuals. Bankruptcy for one will destroy your credit report and credit scores. There are two types of bankruptcies for individuals, and they are Chapter 7 and Chapter 13. The most common now with the new law in place is Chapter 13. Chapter 13 forces you to pay back a porting of your debts usually over 5 years to a court appointed trustee. With all the creditors currently having records defaults, you would think that some kind of resolution is in order with the actual creditor on your own. This is actually true; you can call and negotiate with your creditors a lesser balance and a payment plan. Plus if you have retirement funds you don’t have to liquidate them. With bankruptcy you do.

Disadvantages of bankruptcy

If you have wracked up a bunch of unsecured debt, you can assure yourself calls all day from creditors if you don’t pay them. Bankruptcy will stop the calls but it does not change the fact that the negative record will be on your credit report for 7 years if it is Chapter 13. If its chapter 7 it will stay on your credit report for 10 years. So depending on what your situation is, I think in most cases bankruptcy is not necessary. If you have found yourself in financial trouble you can call your creditors and negotiate an affordable payment plans on your own. In most cases you can reduce 40 – 60 percent of what you actually owe to credit card companies with a fixed interest rate and low payments. So do you research before you jump into a bankruptcy and pay a bunch of money to an attorney for no good reason.

Advantages of bankruptcy
If you file bankruptcy the phones calls with stop. It will also stop creditors from taking you to court. You have the option under the bankruptcy laws to file every 6 years. Most lawyers will tell you that the bankruptcy laws are in place not to protect you but the creditor. So keep this in mind. If you are able to file chapter 7 bankruptcy, this will liquidate all your debts with no obligation to pay anything back. This chapter bankruptcy is harder to file now due to the income restrictions. So don’t think bankruptcy is the easy way out now, because its not. I personally think the only advantage is it will stop the harassment from creditors.

Just remember you can negotiate with your creditors yourself, and it cost you nothing but your time. You can also get a payment plan in place you can afford. Creditors will typically work with you to determine a budget over a period of time. Remember you owe this debt; the creditor did not rack up the debt for you. The long term affect of bankruptcy is hard on your credit report vs setting up a payment plan with your creditors and getting them to stop the interest.

There are also other options like debt consolidation. This is could be a alternative as well. Look at your options before jumping into anything.

Reduce debt with Debt Consolidation Q & A

Wednesday, May 28th, 2008

Debt consolidation is becoming the wave of the future currently. We are starting to get more and more questions about how to get out of debt. We have partnered with a company that provides a unique approach called debt elimination. This company is based here in Texas with us. CreditSolutions is the name and they have received a very powerful award by JD Power & Associates for customer service.

Credit Solutions of America, Inc.

Hi Mike,
I am self employed and have accumulated $75,000 in consumer debt, mainly because of this downturn in the economy. I own a company where I was providing handy man work for realtors in the California area. With the current market in California, my cash flow has almost come to a stop. What would you suggest I do? I have run through my savings, and cannot pay this debt currently.
Johnny Carbelo

Hi Johnny,
We have definitely seen the issues in California, and how it’s affecting people in that state. If you don’t have income coming in to pay the debt, you definitely need to look at your options. I work with a company that provides debt consolidation of a different kind. In other words they provide a service they like to call debt elimination. This would be my first step in trying to resolve your debt issues. These guys can get you out of debt within 36 months. Go to our link on the front of our website and select the get out of debt link.

About the Author: Mike Clover is the owner of is the one of the most unique on-line resources for free credit score report, fico score, free credit check, identity theft protection, secured credit cards, student credit cards , credit cards, mortgage loans, auto loans, insurance, debt consolidation ,and a BlOG with a wealth of personal credit information. The information within this website is written by professionals that know about credit, and what determines ones credit worthiness.

Tips to avoid Debt Consolidation and Bankruptcy

Monday, May 19th, 2008

High debt will not only affect your credit report but it will affect your personal life. Living debt free does require some life style changes for the better. Having too much consumer debt is like a black cloud lingering over you. In this article we will discuss some money saving tips so you don’t have to get into a debt consolidation program or even file bankruptcy. By following some of these money saving Tips you will be able to pay down debt and save more.

Credit Solutions of America, Inc.

• Car Pool
With the cost of gas prices sky rocketing and no end in sight, car pooling is a great way to save hundreds of dollars each month. Find a few people that live close by and start car pooling.

• Bulk Stores
There are stores where you buy everything in bulk, like groceries, furniture, computers, etc…. By using one of these stores there is usally a membership fee once a year, but the savings will quickly recoup that cost. A bulk store example would be Sams and Costco.

• Don’t eat out
Going out to eat everyday for lunch gets very costly. If you were to bring your lunch to work everyday, could save you hundreds a month. Alos not eating out everyday will not only save you lots of money, but it could save your health. Fast food is bad for you anyways.

• Coupons
By cutting out coupons in the Sunday paper you can save a ton of money. Some stores will match or beat competitor’s offers as well. Just by taking the time to cut out coupons in the Sunday paper, you could find yourself saving hundreds as well.

• Garage Sale
If you are like most people I am sure you have the pack rat syndrome. With all that STUFF you have been saving, you could probably have a garage sale and acquire a nice savings.

• Utilities
You can save money with on utility bills by doing the following
1. Turn down the heat
2. Turn up the air condition
3. Turn off lights and TVs when not using them.
4. Turn of the water when shaving and brushing your teeth

With your credit being so important these days, make sure you are heading towards the wonderful goal of financial freedom. It will be hard to get there if you are not being frugal.

About the Author: Mike Clover is the owner of is the one of the most unique on-line resources for free credit score report, fico score, free credit check, identity theft protection, secured credit cards, student credit cards , credit cards, mortgage loans, auto loans, insurance, debt consolidation ,and a BlOG with a wealth of personal credit information. The information within this website is written by professionals that know about credit, and what determines ones credit worthiness.

Debt Consolidation Vs. Debt Elimination

Monday, May 19th, 2008

Debt consolidation can help reduce your monthly payment with multiple credit card companies, but with debt elimination you can relieve your debt and burdens more effectively by eliminating debts. Debt consolidation requires you to pay back your debts on the principal plus interest. With the service we provide you reduce you debt paid on debt balance, save money, and eliminate your debt in less than 36 months.

Debt Consolidation
Debt consolidation loans combine all debts into one payment for an extended period of time with a low interest rate, which will extend the total interest payments throughout the life of the loan.

The program we are able to provide will eliminate debt and save large amounts of money. During this process a highly trained representative will act on your behalf to resolve debt by bargaining with your creditors to negotiate a payment. An advisor will resolve debt reduction for you.

Reduce Debt Quickly
By only having to pay on a reduced credit card balance with the service we are talking about, you resolve your debt quickly. Debt consolidation typically puts all your credit card debt into a 15 to 30 year mortgage. With the interest paid on a debt consolidation you end up paying more on the balances owed due to the term.

The service we are talking about will save you more money and eliminate debt a lot quicker than debt consolidation. Plus this service will look a lot better on your credit report than a bankruptcy.

Credit Solutions of America, Inc.

About the Author: Mike Clover is the owner of is the one of the most unique on-line resources for free credit score report, fico score, free credit check, identity theft protection, secured credit cards, student credit cards , credit cards, mortgage loans, auto loans, insurance, debt consolidation ,and a BlOG with a wealth of personal credit information. The information within this website is written by professionals that know about credit, and what determines ones credit worthiness.

Debt Consolidation vs. Bankruptcy

Sunday, April 27th, 2008

Maybe you are in a pinch currently and either debt consolidation or bankruptcy is lurking at your back door. You and the rest of America are having trouble currently with the down turn in our economy. Whether anyone wants to realize it or not, matters financially for most Americans could be a lot better currently. With the rise in energy costs, this trickles down into everything we buy. The result of all of this is causing a loss of jobs, people going into debt, families loosing their homes, and even bankruptcy is on the rise. The entire real estate sector has been extremely traumatized and has sent a ripple all across our country. So the point is times are tough and we understand at In this article we wanted to discuss the bankruptcy and debt consolidation options for individuals and families that may be having issues as a result of our current economy in the United States.

Credit Solutions of America, Inc.

Debt Consolidation
Debt consolidation is where you get help from a third party to put all your debt into one loan typically with a low interest rate. The advantage of this is you get a payment that you can afford as opposed to letting your creditors go to collection. Obviously this is better on your credit report than just not paying it at all. As this may not be for everyone there are alternate options as well. You can also use the debt settlement method that will reduce your obligations. There are companies that will negotiate a lesser balance on credit card debt that you owe. So you might look at your options to see which makes sense for you.

Personal bankruptcy generally is considered the debt management option of last resort because the results are long-lasting and far reaching. People who follow the bankruptcy rules receive a discharge — a court order that says they don’t have to repay certain debts. However, bankruptcy information (both the date of your filing and the later date of discharge) stay on your credit report for 10 years, and can make it difficult to obtain credit, buy a home, get life insurance, or sometimes get a job. Still, bankruptcy is a legal procedure that offers a fresh start for people who have gotten into financial difficulty and can’t satisfy their debts.
There are two primary types of personal bankruptcy: Chapter 13 and Chapter 7. Each must be filed in federal bankruptcy court. As of April 2006, the filing fees run about $274 for Chapter 13 and $299 for Chapter 7. Attorney fees are additional and can vary.
Effective October 2005, Congress made sweeping changes to the bankruptcy laws. The net effect of these changes is to give consumers more incentive to seek bankruptcy relief under Chapter 13 rather than Chapter 7. Chapter 13 allows people with a steady income to keep property, like a mortgaged house or a car, that they might otherwise lose through the bankruptcy process. In Chapter 13, the court approves a repayment plan that allows you to use your future income to pay off your debts during a three-to-five-year period, rather than surrender any property. After you have made all the payments under the plan, you receive a discharge of your debts.
Chapter 7 is known as straight bankruptcy, and involves liquidation of all assets that are not exempt. Exempt property may include automobiles, work-related tools, and basic household furnishings. Some of your property may be sold by a court-appointed official — a trustee — or turned over to your creditors. The new bankruptcy laws have changed the time period during which you can receive a discharge through Chapter 7. You now must wait 8 years after receiving a discharge in Chapter 7 before you can file again under that chapter. The Chapter 13 waiting period is much shorter and can be as little as two years between filings.
Both types of bankruptcy may get rid of unsecured debts and stop foreclosures, repossessions, garnishments and utility shut-offs, and debt collection activities. Both also provide exemptions that allow people to keep certain assets, although exemption amounts vary by state. Note that personal bankruptcy usually does not erase child support, alimony, fines, taxes, and some student loan obligations. And, unless you have an acceptable plan to catch up on your debt under Chapter 13, bankruptcy usually does not allow you to keep property when your creditor has an unpaid mortgage or security lien on it.Another major change to the bankruptcy laws involves certain hurdles that a consumer must clear before even filing for bankruptcy, no matter what the chapter. You must get credit counseling from a government-approved organization within six months before you file for any bankruptcy relief. You can find a state-by-state list of government-approved organizations at That is the website of the U.S. Trustee Program, the organization within the U.S. Department of Justice that supervises bankruptcy cases and trustees. Also, before you file a Chapter 7 bankruptcy case, you must satisfy a “means test.” This test requires you to confirm that your income does not exceed a certain amount. The amount varies by state and is publicized by the U.S. Trustee Program at

Disclaimer: This information has been compiled and provided by as an informational service to the public. While our goal is to provide information that will help consumers to manage their credit and debt, this information should not be considered legal advice. Such advice must be specific to the various circumstances of each person's situation, and the general information provided on these pages should not be used as a substitute for the advice of competent legal counsel.