Consumer credit counseling debt consolidation

In today’s economy, consumers are being forced to use credit cards more and more for numerous reasons, in some cases simply to stay afloat financially. Unfortunately, the debt trap is often inescapable due to many factors including interest, late fees, and charges imposed by credit card companies. ‘The biggest new tactic may be one of the oldest: raising rates. As long as credit-card companies inform you ahead of time and don’t make any sudden rate changes, they are mostly free under the law to charge whatever they want. They can raise the rate on new purchases made as long as they provide 45 days notice that they are doing so.’ [1]

Other than debt settlement or debt consolidation, an effective relief strategy for unsecured credit card debt is resolution. Debt relief programs such as debt settlement, while effective, can produce a hefty and unexpected tax bill for the forgiven amount. Using an attorney to resolve disputed debt is an effective method for debt-burdened consumers to get relief.

Debt Resolution works by hiring an attorney to dispute a number of factors regarding the calculation of the debt. This gives benefits not afforded by most other programs. By using an attorney to dispute and resolve debt, consumers should be able to avoid paying taxes on the difference in any lowered amounts. Typically, as with most other programs, any ‘forgiven’ debt is treated as taxable income and triggers an ‘IRS Form 1099′ being issued by the creditor. Using the attorney driven resolution process is an effective means to avoid this, usually saving the consumer thousands of dollars in taxes.

The attorney can also stop the harassing collection calls and notices and provide cease calling letters to creditors. If debt is in a good faith dispute, creditors are prohibited by law from pursuing further collection efforts until the dispute has been resolved. This is a powerful strategy in consumer debt relief.

The program works by enrolling the unsecured debt into the program. The client selects a monthly payment and duration. These are based on the final amount of resolved debt offered by the program. There is usually a minor fee to set up the account and the attorney charges a standard fee for their services. Payments are usually made to the attorney’s trust account and the client is provided access to monitor payments and progress against each debt account. Accounts are paid off in full in an order that the client can select.

Consumers should thoroughly check whether any debt relief program they are considering uses an attorney or simply a negotiator. Many reports are available on the numerous companies in the market that charge high up front fees, only to disappear, leaving the consumer without relief, protection or most importantly the money they have paid. Any debt relief service should thoroughly explain all fees, services, and potential drawbacks to the consumer up front.

Consumers may also contact their creditors directly to negotiate any payoff amount themselves. The creditor may and usually does, require any negotiated amount be paid in full in one lump sum. With higher debt amounts, this may be impractical or even impossible for the consumer to pay. Also, any negotiated lower debt in this case will most likely be treated as ‘forgiven’ and trigger a taxable income event. Finally, consumers are encouraged to seek the advice from an attorney when necessary. The attorney’s record should also be checked against the state bar where the attorney practices law.

[1] Robin Sidel; Credit-Card Fees: the New Traps; Time Magazine February 20, 2010

Jeff Pierce and business partner Audrey O’Brien manage an effective debt resolution program at Performance Debt Resolution, LLC. Using an attorney backed process to dispute and resolve debt; clients are guaranteed a 60% reduction in their balances with no tax implications. Clients select a 0% interest payment program and use the attorney to handle all matters in resolving their unsecured debt. Clients are also given secure online access to view their account and resolution progress. Call them today at (866) 401-6148 or visit them online at http://www.reducemydebtquick.com for further information. Their website contains a live chat where you can interact directly and an online calculator to estimate your payment.

Jeffrey A. Pierce is the manager at Performance Debt Resolution, LLC in Marlton, New Jersey. Their mission is to provide ethical and honest information so that consumers can make the absolute best decisions possible regarding unsecured debt. In addition, they provide consumers access to their resolution service for clients burdened with debt. Using a specialist law firm, debt is resolved by 60% and guaranteed by the attorney. Consumers can make 0% interest payments for a length of time that they can choose to pay off their debt. They are the Nation’s premier source for debt resolution and no-payment consultations.

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