It
is our commitment to ensure that The Bankruptcy Avoidance Group
helps you to meet your individual needs, through debt management
agencies which offer service diversification.
Many companies only offer one
service, which they try to force feed to all their potential
clients. Many times these companies feel like they can not arm
their potent ional customers with all of the facts. Some
consumers even receive false information, in lieu of a sale. We
are committed to establishing a network of debt relief agencies
to objectively evaluate your case, giving you the pros and cons
of your options and offering a consolidation solution that works
for you. In order to accomplish this objective our network of
debt relief agencies offer potential clients service
diversification. Below are the consolidation options available in
lieu of bankruptcy.
Objective: To settle and resolve
your debts for as low a percentage on the dollar as possible.
Pros:
Cons:
The monthly
set-aside amount may be much more affordable.
You might
have to experience normal creditor collection activity
with delinquency. No company will have the legal authority
to prevent all creditor calls.
An
alternative to bankruptcy, which is more difficult with
bankruptcy reform in place.
Creditors may
refuse to settle debts. Every situation is different and
no company can guarantee that all creditors will agree to
negotiate and/or settle.
Simplifies
things by giving one simple payment each month, and a
timeline to have your bills paid off.
If you do not
make required minimum payments to your creditor you may be
breaking the terms of your agreement with them and your
actions will probably be reported to consumer reporting
agencies as late, delinquent, charged-off or past due
balances. Also, persons participating in a debt settlement
program run the risk of being sued for non payment.
Affords you
professional representation during a critical financial
period in your life. (Not legal advice or representation)
Settlement may
be right for you if…
You are current,
but dependent on your credit cards to help offset your monthly
household expenses so you can remain current with your cards,
and have no accessible equity or assets to help manage the
situation.
You have just
fell behind and can no longer afford to pay a regular monthly
payment to your creditors, similar to when you were current.
You are behind to
the point that you are now dealing with a third party
collection agency, or law firm.
Objective: To help
the client get out of debt (usually in a period of 36-60 months)
by taking advantage of creditor benefits through monthly
payments to creditors eventually leading to payment in full.
Pros:
Cons:
Usually a
much lower interest rate, on a creditor by creditor basis,
is made available to the client.
The payment
amount and time frame is longer than settlement in most
all cases.
In many
cases, if you are behind, your account may by re aged back
to a current status without having to make up any back
payments or late fees, after three or more consecutive on
time payments.
This
increased financial pressure may not be feasible if the
client does not have the ability to use their cards.
Simplifies
things by giving one simple payment each month, and a
timeline to have your bills paid off.
Not all
creditors may participate in the debt management program.
Also, the
program does not have a negative impact on your FICO
score.
Debt Management
is right for you if…
You are current,
can make minimum payments on your cards and pay regular
monthly bills without using the cards, but can not get the
principal balances down because of high interest rates.
You had an
emergency that caused you to fall behind, but can now afford
regular monthly payments and just need help getting back to a
current status.
Objective: To use
equity in your home to pay off your unsecured debts.
Pros:
Cons:
A quick way
to ease pressure from mounting credit card debt.
Increases
your financial risk by securing your unsecured debt with
your mortgage deed.
Usually does
not have a negative impact on your credit score, or your
ability to get financing.
May have to
pay a high commission to a broker or loan officer. The
amount of money you have to pay back is usually
substantially more than a debt management or settlement
program.
Creates
possible tax breaks. (Consult your tax advisor for
information concerning your situation.)
Weakens your
financial portfolio by using an asset to pay off revolving
debts.
Leaves your
vulnerable, because you cash in an asset that could be
used to handle a more urgent emergency.
Refinance may be
right for you if…You
are current with your bills, still have a relatively high credit
score, but can not handle the monthly minimums on your revolving
debts without using your cards.
