This proud nation has been going through a serious downward spiral in the economy during the last few years causing huge numbers of people to suffer financially and for the residents living in the state of California things are no different. For California citizens among the most detrimental economic difficulties most are coping with is owing to much credit card debt to realistically keep on paying for each month. This is when a California debt settlement service will help.
To start with allow me to state that this is going to be a really lengthy article and don't keep reading unless you're in credit card debt and therefore are seriously searching for a solution for this dilemma. I personally have been working in the debt relief business for more than 10 years now and have comprehensive knowledge of the way the industry operates. In the following paragraphs I am going to clarify exactly how debt settlement works and why if you're residing in California how crucial it will be to retain a California debt settlement law firm to help you during your financial difficulty. I will furthermore in this article provide guidance regarding how to tell if a debt settlement organization could be nothing short of a scam. So read carefully!
Let's begin with what debt settlement is. Debt settlement which is also likewise referred to as debt negotiation is a procedure for negotiating your balances for a reduced amount than what is presently due; therefore saving you a good deal of money and time.
The initial step with this course of action is one that could put some individuals off but is essential to attaining the settlement and savings of cash. First you need to stop making payments on your debts owed, for those who happen to be past due this is a moot point; nevertheless for those who are up to date with payments you have to understand this initially will have an adverse impact on the payment history percentage of your credit score.
Absolutely no credit card companies are prepared to negotiate an account that is up to date with payments, if they think you are able to carry on paying the minimums for many years and lose tens of thousands of dollars strolling along on their credit treadmill that's exactly where they want to keep you. Not until you stop paying these folks will they pay attention and be ready to speak in terms of negotiating the account.
When you begin to go into a past due status rather than pay the credit card companies every month, you'll be saving up the necessary funds to then down the line work out a one time lump sum repayment to settle the account for a lot less than what is due. Oftentimes the borrower can save almost half of what's owed and be free of debt in 2-3 years.
Now I'd like to look over a few issues with debt settlement and how they're managed differently with a law firm in comparison to a typical company. Listen up carefully because when you're interviewing a California debt settlement company you will need to pay attention to what these people have to say and there are many warning indicators to be aware of that may reveal if the organization is legit or not.
I would like to go over what takes place once you fall past due on the monthly minimum payments. For starters your credit rating if you're current will be negatively affected. Now you should be aware that 35% of your credit rating consists of your "payment history" this is where the initial adverse impact will take place. On the other hand when you begin paying down the balances your rating will naturally go back up. Why? Because 30% of your credit rating is your "debt to credit ratio" which will appear far better after you have these balances paid off.
Let me state that the sketchy debt settlement companies will either quickly review this or simply flat out lie saying that there won't be any impact on the credit rating. An additional negative factor to going past due is coping with collections calls. Legally no debt settlement company has any lawful standing to actually end these phone calls. Oftentimes the company will simply explain to their customer to mail out a "cease and desist letter" by themselves, which can force additional action from the credit card companies.
For those who retain a California debt settlement law firm things are going to be slightly different in regards to the collections calls. A law firm legally can stop the 3rd party collections agencies from contacting and bothering their clients based on the FDCPA (Fair Debt Collections Practices Act). A law firm will even upon retention of their services send out letters to the credit card companies making them conscious that you're being represented through the respective firm hired.
So that's the first main distinction between a law firm and your regular company. Any organization that states they are able to end all of the phone calls is simply lying just to get you signed up!
This brings us to a different problem that may occur from going past due and that's the possibility of getting sued by the credit card companies. Allow me to first state that it's not really the normal practice for the credit card companies to take people to court; it just costs them too much money and time, without any assurance of getting anything in exchange. Nevertheless it can be done and if this takes place you need to make sure you have the correct firm behind you.
If you're summoned to court regarding a credit card debt there will be absolutely nothing by law your regular debt settlement company is capable of doing for you. Alternatively if you hired a law firm you'll be in a far greater situation. Legally, a law firm can continue to contact and work out a settlement outside of court even after a summons is released. This is a substantial advantage to you!
Now let us look at possibly one of the primary reasons it's essential if you reside in California to employ a law firm over a company. Almost all debt settlement organizations say they are able to work in all the states, this is a flat out lie and may seriously harm you the debtor down the road.
A debt settlement company is only able to perform the job in the state it is located in and every state has distinct laws and regulations regarding how debt settlement may be dealt with. And trust me the regulatory bodies are cracking down extremely hard on organizations functioning against the law, even if they provide a sound and working program.
The issue for the client is if you're signed up with an organization not properly established where you live and the company gets shut down what can happen to you? Imagine you paid them all of their charges already? This is a nightmare situation and transpires with numerous debtors. The organization will get shut down and just doesn't have the cash to pay back their customers the fees they paid and cannot provide them the assistance they paid for.
For this reason it is essential to retain a law firm that will work where you live and holds a sound working knowledge of the laws and regulations in California. Not just are you going to have the advantages of decreased collection activity and significantly lessen the impact of a possible law suit but you'll have the satisfaction that the firm won't be shut down and leave you without any money holding the bag.
I realize in this article I have more so highlighted the adverse facets of debt settlement, but I feel the customer should be made completely aware of such concerns prior to taking this path. However the fact is debt settlement is helping huge numbers of people every year get back on their own feet financially. With the financial system the way it is today debt settlement is basically the only real alternative lots of people have got apart from a bankruptcy proceeding; therefore deciding on the proper service could make or break their success. For this reason I felt required to publish this informative article in hopes that consumers trapped in debt will read it and feel educated therefore helping them make the right financial move. Bear in mind the advantages of debt settlement, you might be out of debt within a few years and also have saved nearly half of what you presently owe. That's incredible in comparison with where you'll be should you remain on the creditors "credit treadmill" and pay them excessively high interest and penalties over the course of decades via your monthly minimal payments.
I am hoping after reading this you have an improved perception of debt settlement and the incredible importance of retaining a California debt settlement law firm should you require assistance. If you would like more information to see if this can be a solution for your debt problem then click the link below and fill out an application to speak with a debt analyst. We can review your situation and see if this would be the right fit for you personal unique situation.
California Debt Settlement Relief