What is Debt Consolidation
Credit Card Debt Consolidation
Medical Debt Consolidation
7 Tips About Debt Consolidation
Common Debt Consolidation Mistakes
Debt Consolidation
Risks of Debt Consolidation, Types of Debt Consolidation Loans, Pros & Cons
Balance Transfer or Debt Consolidation?
Debt/Credit Calculators
Discussion Forum
Credit Counseling and You
Non-Profit Credit Counseling
Consequences of Credit Card Default
Effects of Credit Card Default
9 Common Credit Card Mistakes
Eliminate Credit Card Debt in 90 Days
Credit Card Debt
10 Expenses You Can Not Afford If You Have Credit Card Debt
Truth About Credit Card Companies
Should I Tear Apart My $300 Limit Credit Card - The Worst Credit Card Ever?
Disputing Credit Card Debt
401k vs Credit Cards: Where to invest?
Debt Settlement Letters
Sample Letters
Write a Powerful Debt Validation Letter
Reputable Debt Settlement Agreement
Debt Settlement vs. Debt Consolidation
Dangers of Debt Settlement
Avoid Debt Settlement Pitfalls
Debt Relief Tools/Debt Management Programs
Debt Settlement FAQs
Is Debt Settlement Money Taxable?
Reduce Medical Debt
Free Bill Consolidation: Does it exist?
Budgeting to Stay Debt Free
10 Debt Reduction Mistakes
Should I Pay Off my Debt or Save Up for a Down Payment on a House?
Bill Consolidation
Three Secrets to Lowering Your Debt
Tips To Lower Your Bills
Government Debt Help
Debt Help During Recession
Debt Relief During a Recession
What Debt Relief Means
Pay Off $50,000 Debt
Worried About Bills?
Money & Debt Videos
Report Illegal Collection Activity
Managing Medical Bills
Medical Debt & Bankruptcy
The Facts on Debt
Debt Quotations
Drowning In Debt?
Who to pay first?
Managing Debt FAQs
Medical Debt Solution
12 Hot Tips for Eliminating Debt
7 Debt Elimination Mistakes
2 Ways to Achieve Debt Elimination - Debt Snowball Elimination Method
Payday Loan Consolidation
Payday Loan Debt Consolidation
Payday Loan Relief
Default on a Payday Loan?
Payday Loans | Consumer Information
Problems with Payday Loan Stores
Bad Credit Loan Relief
How Payday Loans Work
What is Loan Consolidation?
How to get a $50,000 loan
Get an $80,000 Loan
$100,000 Loan for Debt Repayment
Veteran's Home Loan Refinance Options
Government Loans vs. Private Loans
Finding a Government Loan
Student Loan Consequences
Reputable Debt Consolidation Companies
Debt Consolidation Company Reviews
Reputable Debt Management Companies
List of Debt Companies in USA
Debt Companies By City
How Debt Affects Your Credit
What is shown on my credit report?
Improve Your Credit Score
Correct Credit Report Errors
Can Debt Settlement Ruin Credit?
Can Debt Negotiation Ruin Your Credit?
401k Limits
Safe CD Rates
Financial Planning
Banks versus Credit Unions
AMEX Horror Stories
IRS Tips For Audit
Choosing a Tax Preparer
American's not planning for long term care
Understanding Usury Laws
Unemployed During A Recession
FREE Government Grants
Where does money really come from?
About Us
Contact Us
6 Payday Loan Debts Owe
Borrow a Loan to Pay Off Payday Loan?
My husband was out of his job and Payday Loans were rolling over

Debt Consolidation Facts

1. If you spend more than 50% of your credit limit every month, this indicates to the Credit Bureau that you do NOT have enough cash on hand to meet your monthly expenses. This will identify you as a high credit risk and will actually reduce your credit score by 60 - 70 points overnight (Fair Isaac).

2. If you miss 1 or 2 payments on your credit card debt, the issuing company will skyrocket your interest rate to a whopping 27% - 30%!

3. Out of a random sample of 3 million American consumers (included in Experian's National Score Index), 51% of them have at least 2 credit cards and 14% of them have 10 or more credit cards.

Debt Settlement Agreement

As in all walks of life, there is good and evil in the debt settlement agreement arena.  There are reputable debt settlement agreements and there are those created for the sole purpose of ripping you off.  You’ll need to know what to look for and be able to identify a scam when you see one.  You don’t want to be counted in their carnage.

Good One

 What constitutes a good debt settlement agreement?  For starters, the agreement must be tailored to fit your own personal debt settlement needs.  In other words, it must reflect exactly what you discussed with your creditor when you and your creditor agreed on the terms.  Nothing more, nothing less.

Video: Begging & Borrowing in America - America's Cheapest Family

Bad One

There are many suspicious items to look for in a debt settlement agreement.  You may find that the terms have changed, the amount due is changed or there is verbiage missing that should be there to reflect what you agreed to.  If you find anything amiss or anything added that should not be there, take out a pen and start making amendments. 

  • Scratch out any verbiage that contradicts what you agreed to.
  • Scratch out any added requirements that you did not agree to. 
  • Add the verbiage that should be there. 
  • Create a new document with all the correct language.
  • Always make copies of any written exchanges with your creditor.  Make a copy of the creditor’s original document you modified and the new one you created.  Send the originals to the creditor with a cover letter explaining all of the changes.  Mail it Certified Mail Return Receipt Requested.
  • Do not sign or pay anything until you receive a correct copy of the debt settlement agreement with the creditor’s signature already on it.

Another item to note is that your creditor may send you a complicated agreement.  There is nothing wrong with your creating your own agreement to ensure its accuracy.  Use your creditor’s original format, but modify the confusing language to reflect common terms that you understand.  Again, copy everything for your records and mail the originals to the creditor for signature.

Specific Content

There are certain standard items that should be included in every debt settlement agreement.  Make sure all these are present on your debt settlement agreement before you sign:

  • Name of creditor.
  • Your name.
  • Specific amount you agreed to pay.
  • Date by which you agreed to pay the debt.
  •  If you agreed to make payments – include specific amount of payments, frequency of payments and lifetime (duration – e.g., number of months, years) of payments.
  • The creditor agrees that the settled amount constitutes the debt as paid in full.
  • Specific language stating that the creditor agrees to remove all negative information, and agrees to never place negative information on your credit report in the future.
  • Signature of creditor.  Don’t sign unless the creditor has already signed.  Send it back for creditor’s signature.

Payment – Legal Loopholes

Depending on the state, you may run into some unavoidable legal loopholes when it comes to your payment.  Of course, you will always want to write paid in full in the memo line of your check/money order when you submit payment to the creditor for payment.  For extra measure you should also write on the back of the check, “The cashing of this check warrants that this account is paid in full.”

Note that if you DO NOT, collection agencies can hire out the forgiven part of your debt to be collected by another agency.

There are 19 states that enforce this; however, 13 states have modified this rule.  For these states, all the creditor has to do is write in the specific language under protest or without prejudice near his signature. This retains the creditor’s right to collect from or sue you for the remainder of the balance due, but the creditor has to use that exact language.

In California, creditors have the right to cross out the "paid in full" language and pursue you to collect the difference.  Coincidentally, this state also provides a process for the debtor to get around that.

Video: Maxed Out (Documentary Trailer)

Debt Settlement Companies

Have you come to the point where trying to work out a debt settlement with your creditors is just not working?  If so, you may want to consider enlisting the assistance of a debt settlement company.  There are a few things you’ll want to check for when considering a debt settlement company. 

Company Address

When visiting a debt settlement company’s site, make sure you can find their physical street address somewhere on the site.  If it’s not found on the homepage, you can typically find it when you click on the Contact Us tab/button.  If you do not find it anywhere on the site, move on to another company.  The only exception would be if you find the Better Business Bureau seal on the site.

Better Business Bureau

Did you see the seal of the Better Business Bureau (BBB) placed on the debt settlement company’s website?  If so, this is a good “sign.”  In order for a business to be BBB certified, they must meet fairly stringent qualifications and adhere firmly to established BBB rules.  If you see the BBB seal, this means that the company meets rigorous BBB’s requirements. 

The Internet is littered with debt settlement companies.  Several found by a quick search are as follows:

Heritage Debt Relief
105 S. Canyonwood Dr.
Suite D2
Dripping Springs, TX  78620
(866) 852-2273

Internext Technologies
Debt Consolidation Care
711 S. Carson St.
Suite 4
Carson City, NV  89701
(800) 601-1579

Trident Debt Solutions, Inc.
1444 Stuart St.
Denver, CO  80204
(303) 520-3414

Debt Relief America
3100 S. Harbor Blvd.
Suite 250
Santa Ana, CA  92704
(800) 470-8155

American Debt Foundation, Inc.
4491 S. State Rd. 7
Suite 213
Ft. Lauderdale, FL  33314
(866) 626-4718 or
(866) 411-3328

Option One Financial Group, Inc.
4631 NW. 31st Ave.
Suite 144
Ft. Lauderdale, FL  33309
(800) 797-7813

Turning Point Debt Settlement
3450 Wilshire Blvd.
Los Angeles, CA  90010
(888) 900-9225

Christian Debt Counselors
201 SE. 15th Terr.
Suite 206
Deerfield Beach, FL  33441
(866) 958-3328

US Financial Management, Inc.
3131 Camino Del Rio N.
Suite 1500
San Diego, CA  92108

American Financial Service
9530 Hageman Rd.
Bakersfield, CA  93312
(800) 931-4237

Nationwide Debt Settlement
3819 N. 3rd St.
Suite E26
Phoenix, AZ  85012
(866) 654-6937

Professional Debt Consultants
4400 Northcorp Pkwy.
Palm Beach Gardens, FL  33410
(800) 209-6428