Help! I Can’t Pay My Bills!

If this is you, you’re not alone. Many people in California CA are finding themselves in this predicament caused by a job loss, a pay cut, underemployment, and loss of income, divorce or death of a spouse or other unforeseen circumstances. If you have looked into a California Debt Consolidation Program, utilizing credit counselors to negotiate lower interest rates and combine your accounts into one payment and find you can’t afford that one payment, what are your other alternatives? Many wonder if a California bankruptcy is the only option at this point.

There is another way out. It’s called California Debt Settlement and it can help you eliminate your debt by actually reducing the principle, or the amount you owe your creditor. Creditors would rather have a portion of what you owe than nothing at all. It’s important to understand the difference between Debt Settlement and in California. Here’s how it works:

Instead of making monthly payments that go toward paying your debt off, your monthly payment goes into a special savings account sometimes known as a special purpose account or trust account and is set up at a federally insured financial institution or bank. You should get monthly statements just as you would from any bank. A professional credit counselor can set up this program. Your counselor notifies your creditors of your enrollment into a California Debt Settlement Program. The creditors know that at some point, they will hear from the counseling service to settle the debt for less than the original debt, most of the time, a fraction of the original balance.

How does this happen? This is where your special savings account comes in. As you accumulate funds, the Credit Counseling service monitors the account and as soon as you have about half of the balance you owe the creditor, they will contact the creditor and begin negotiations to settle the debt for a portion of the original balance.

If you have more than one creditor, the first settlement is made on the account with the lowest balance. Then as you continue to accumulate funds in the account, your counselor will negotiate and settle the next highest balance, then the next highest and so on until all the balances are settled and your accounts show a zero balance. At this point you will be debt-free as far is your unsecured debt is concerned which would be credit cards, medical bills, car repossessions – in other words, the debt is not “secured” with property like a house or a car.

Your credit score will be affected while you are going through the settlement process because your accounts will go into default until they are settled. Once you’ve settled all your debts, you can begin to rebuild your credit score. This is a much better alternative than bankruptcy for many reasons.

Changes in California bankruptcy laws make qualifying for Chapter 7 (which eliminates all unsecured debt) much more difficult. In order to file Chapter 7, you must meet a “means test”. In other words, if your income is over a certain threshold, usually a very low threshold, than you are required to repay at least a portion of your debt through Chapter 13. This is overseen by the court system. If you have assets like boats or other “luxury” items that can be liquidated, the courts will require you to sell them. The home you live in and the vehicle required to transport you to work are not included.

As you can see, a California Debt Settlement Program is much less complicated and is easier to recover from, as it does not stay on your credit report for 10 years like a bankruptcy. Just make sure you are working with a professional Credit Counseling firm.

Horizon Debt Group, LLC is a credit and Debt Consolidation firm that has helped many consumers overcome their unique financial challenges. We invite you to take advantage of the many resources Debt Consolidation Services has to offer starting with a free consultation with a Certified Credit Counselor.

We have partnered with a true national law firm. Our partners have law offices in California as well as all fifty states. Our professionals are dedicated to helping our clients in California resolve their debt problems. We provide Debt Consolidation Services in California CA and nationwide. We have a professional alliance with many of the nation’s most reputable Debt Consolidation Companies to assist our clients as advocates for their rights.

For years large corporate law firms have helped business clients solve their debt issues by negotiating “financial workouts” with their creditors allowing them to stay in business and work through difficult financial times in California CA. Horizon Debt Group, LLC and our preferred partners have created a cutting edge California Debt Consolidation Program to provide our clients with these same types of services in California allowing you and your family to focus on more important issues in your life. Like a security blanket, our partners provide all the law-related services you need in California to resolve your debt.

Fill In The Form Above And Find Out How Much You Can Save Instantly! Or Call 888-894-0777 For Your Free No Obligation Consultation.

Debt Stinks!
Debt Consolidation May Be The Way To Rid You of the Smell!

Most people who seek Credit Counseling services in California do so when they hit a sinkhole in life: job loss, wage reduction, death of a spouse, divorce or any number of situations that can throw the average household in California off their path. You may also be just one of those credit cardholders in California that have overextended yourself and can’t make your minimum payments.

In any event, a good California Credit Counseling service may be the answer. First of all, you can expect to have your income and expenses analyzed to see if you can even afford a reduction in your payment amounts. If you qualify, the California Credit Counseling service can consolidate your credit card payments into one monthly payment after negotiating with the credit card companies to reduce your interest rate. Thus your monthly payment is lower.

However, your payment does not drop as you pay down your debt. The payment remains the same until all debt is paid off. When one of your accounts is paid prior to the end of the program, that money is spread out to the remainder of the creditors owed. The whole idea is to get you out of debt in a few years.

Most people in California CA who find themselves in debt with high interest rates are looking at 15, 20 or sometimes even 30 to 40 years to pay off the debt with minimum payments. Most people in California don’t do the math because not knowing is easier and less painful. You don’t want to face the fact that the new vacuum cleaner or plasma TV that was on sale is going to end up costing you 3, 4 or 5 times the price once you add on the interest.

The most important part of the process is the big C word: COMMITMENT! You have to make a conscious decision to get out of debt and stay out of debt so you can build on the future, not watch it slide out from under you. Most people in California do not complete a program for this reason. Change is very hard. But it’s also very rewarding. If you commit and stay with it, you will improve your credit score as you get out of debt because you will be improving your debt to income ratio which is a BIG part of determining your credit score.

When you do complete the California Debt Consolidation Program and vow never to get yourself in that situation again no matter how many reward points or cash back or whatever the gimmick of the day is, you will feel incredible! It’s like loosing weight or stopping smoking only better because you will feel in control of your financial future. And if you’re really committed, once the debt is paid off, that money you have disciplined yourself to pay every month should go into savings and investment. Watching that grow will reinforce that feeling of control over your life literally change your life.

If you have credit card debt that you cannot pay even under a California Debt Consolidation Plan, you may want to consider a settlement with the credit card companies.

Bankruptcy – A Last Resort Option

If you find yourself in serious financial troubles, there are several options at your disposal as you try to get a handle on out of control debt. Debt settlement, debt relief, debt management and the like all offer solutions to try and help you make affordable and acceptable arrangements with your creditors. If your debt has spiraled out of control to the point you cannot work out affordable solutions, a last resort option might be bankruptcy. California bankruptcy, while it has pros and cons, can help you reset your finances, so to speak.

The biggest positive to filing and following through with a California bankruptcy is obviously the fact that the creditor calls will stop and the stress of debt you cannot control is alleviated. Finances are once again controllable. California Bankruptcy proceedings are generally all completed within a relatively short time frame, usually about six months. While it is not a light decision to make, at least it can all be resolved as quickly as possible and life can go on. It is important that you control your finances after bankruptcy and do not allow a repeat performance. California Bankruptcy cannot be filed again for at least seven years, but the idea is to never need such financial rescue again.

A California bankruptcy does bring about negatives, the biggest one being that filing bankruptcy completely decimates your credit for quite some time. It appears on your credit report for ten years. Following a California bankruptcy, it is nearly impossible to get any kind of loan, mortgage or the like for several years. After a few years have passed, some places will work with you if you have a good history building since the bankruptcy. This depends on the place and the type of loan, though, and is not a likely thing to happen.

Once a California bankruptcy has been filed with a reputable California attorney, processed through the California court system and the proceedings all signed, sealed and delivered, the creditors will cease calling and your new financial future begins. It is important to start off and keep the finances under control, to keep spending affordable and within whatever the budget may be. By using the California bankruptcy as a personal finance restart, the family finances can come back stronger and more secure, if done properly. California bankruptcy does not hold the same ‘end of the world’ stigma that it used to, so it is a tool that can be used if need be.

Horizon Debt Group, LLC has partnered with a true national law firm. We will help make the bankruptcy proccess as easy and "pain free" as possible. Give us a call today!

Fill In The Form Above And Find Out How Much You Can Save Instantly! Or Call 888-894-0777 For Your Free No Obligation Consultation.

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Sat, February 04, 2012 11:29 pm

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