Rate Hikes- There is no law that caps interest rates. With late payments and any other consumer infraction be prepared to see rates escalate.

New Fees- Looks like there will be application fees, inactivity fees, and other nuissance fees.

Higher Monthly Minimum Payments- the numnber was 2% of what was owed it will now be around the 5% figure, which will gauge the cardholders pocket.

Reward Points/Miles/ you will see many of these programs start to disappear over the next few months.

Credit Limits Slashed- Card Limits will be reduced dramatically.

Remember cardholders- you are not married to your creditor, Settle your Debt SYD style

1- Make the independent decision to stop paying your creditors directly. Upon entering into a credit card settlement program, it becomes the responsibility of the debt settlement company to pay the creditors directly with your saved money based on the  settlement agreement signed off by both the creditor and the consumer.

2- Avoid taking calls from the creditors. After entering into a program, power of attorney and cease and desist letters should be sent to your creditors. This means, the settlement company has your permission to negotiate on your behalf. Therefor, you should not speak with the creditors or collection agencies. If you do, just let the creditor know you are working with a debt settlement company and to contact them to discuss settlements.  The Fair Debt Collections Act will also help to limit the number of calls and types of calls from creditors.

3- Be diligant with your monthly payments! The only way to be successful in a debt settlement is to make each and every agreed upon payment. Without the money going into your account each month, there will be nothing to be used for settlements.

4- Do not use any credit cards not in the program. Do not put your self into debt on credit cards with a $0 balance while in the program. This defeats the purpose of being in a debt settlement program!

By following these simple steps and keeping in close contact with your debt specialist, you will have a hassle free experiance.

Call SYD Financial today at 866 364-9161 for a free consultation!

There are certain companies who will negotiate with your creditors to obtain reduced settlement amounts for an up front fee- SYD Financial also offers a Performance Based Plan, you only pay based on the settlements. These companies are called Debt settlement Companies. Debt settlement or credit card debt settlement follows a pretty much standard format, below is an example of how the settlement process works:

Credit card debt settlement Example:

A debtor has a debt of $50,000 over four credit cards and is struggling to make even the minimum payments each month. A credit counseling service has already attempted negotiating with the creditors but the reduced payments were still too high for the debtor to pay. Bankruptcy is an option, but the debtor does not wish to go down this route as it will destroy his/her credit rating for at least the next seven years, nor does the debtor want to go to court, which would be inevitable if this path was chosen.

Another option, and the one the debtor opts for, is to work with a credit card debt settlement company who advises that the following four steps are taking in order to get rid of the $50,000 credit card debt:

Refrain immediately from making any further payment to creditors: The debt settlement company asks the debtor to stop paying his/her creditors with immediate effect and instead to start depositing a set amount each month into a trust account created by the company.

Collection calls are passed on: Once payments begin to get behind the credit card companies will start to call the debtor with requests for payments these are effectively passed on to and handled by a representative from the debt settlement company.

Negotiation begins: As money is continually being paid into the trust account, the debt settlement company representative will begin negotiations with the creditors.

Settlements of between 40-60% are acquired one by one: Part of the negotiation process is getting the credit card companies to accept the fact that the debtor cannot afford to pay the individual debts in full and as a result they agree to accept a much reduced amount, often between 40% to 60% of the outstanding debt.

These settlements do not happen all at once, but as they do the debtor is able to pay them off using the money deposited in the trust account. It is important however, that any extra funds the debtor finds are deposited into the trust account also. It is completely possible that this debt could be completely cleared in as little as two years, depending on how successful the negotiations have been.

It is irrespective whether it is a credit card debt settlement program or one that includes other forms of debt, the initial thing you should do is to stop paying your creditors and forward payments to your debt settlement company instead, without doing so you risk not having funds in place when an agreeable settlement is offered.

There are certain debts that you can be settled with these techniques and those that can’t as they are excluded from settlement programs:

Debts that can be settled:
• Unsecured Credit card debt
• Medical Bills
• Gas/store cards
• Personal loans
• And basically anything credit that is unsecured

Debts that can’t be settled:
• Tax debts
• Alimony,
• Child support,
• Mortgages,
• Car loans
• Student Loans that are covered by federal insurance

How much can I expect to pay for a settlement service like this and how long will it take to clear my debt?

The usual fee that a debt settlement company charges is based upon the size of your debt, the number of accounts that are being settled and the amount you will actually save through the settlement company’s efforts. It usually equates to between 25-35% of the balance that is forgiven by the creditors.  SYD Financial’s fees are substantially less than industry standard.  Please call us at 866 364-9161 for a no obligation quote today.

Therefore, if we use the example above and the debtor saved 50% and the settlement company charges 25%, the charge will be $6250. This would mean that the actual settlement saving to the debtor is around 32%.

The whole process can take as little as 2 years but could extend to 4 years, but this is mainly dictated by the size of the debt being settled.

Once my debt is cleared is it really…cleared?

Generally, once both sides have agreed upon a settlement and the debt has been paid off, as per the agreement, most creditors will not pursue you for the remaining balance.

Unfortunately, any proportion of debt that has been forgiven by creditors is called ‘cancellation of debt income’ and under IRS guidelines is still taxable!

Look no further than credit card debt settlement. This is a wonderful option for people who have nowhere else to turn for financial assistance. The perfect candidate for this kind of settlement is someone who is in extreme credit card debt. They may be three to six months behind in their monthly payments and know they will keep getting behind if something is not done.

What is debt settlement, you may ask? It is where you can legally reduce your debt from sometimes 35% to 60%. Debt settlement companies will ask that the creditor forgive the rest of your debt and report it as settled to credit companies. With this option, you can sometimes be debt free in as little as 2 years!

The company of your choice will usually predetermine an amount of time for you to save up enough money so they can offer a lump sum to your creditor. The lender does not want you to file bankruptcy; they want to take whatever they can get. It is a much better option to go through a settlement company, as opposed to trying to do this yourself. There is less chance of legal action being taken against you. The settlement companies have built up a relationship with many lenders that will make the process much easier.

Some of the benefits of this option when you are in major credit card debt are that you can get lower monthly payments; you only pay one company, and stop the collection calls. You will also get lower interest rates. Hopefully, if you are indebted to someone, you will look into this option.

Here is another tip. By researching and comparing the best credit card debt settlement services in the market, you will be able to determine the one that meets your specific financial situation. Nonetheless, it is advisable going with a trusted and reputable debt counselor before making any decision, this way you will save time through specialized advise coming from a seasoned credit card debt advisor and money by getting better results in a shorter span of time.

Q: What type, or chapter, of bankruptcy can I file?
A: Consumers typically file Chapter 13 bankruptcy, where repayment is made to creditors, or a Chapter 7, where most debts are eliminated. For the majority of consumers, a Chapter 7 would be filed; usually a Chapter 13 is filed by those who face losing their home in a foreclosure.

Q: Do I need a lawyer to file bankruptcy?
A: Some people do have a very simple case that they could possibly do on their own, but it’s a good idea to have an attorney guide you through the process and make sure you do things correctly. A lawyer can guide you through the intricacies of the process and help you avoid the pitfalls. Although you may think your case is easy, if you file incorrectly, it can significantly delay your discharge and in some cases, your case could be dismissed. Moreover, if you file for the wrong bankruptcy chapter, you could put yourself in jeopardy of losing assets, including your home. My fees are very reasonable and it is worth paying a lawyer to make sure your case is successful.

Q: What is the difference between a secured claim and an unsecured claim?
A: Secured debt is a creditor’s claim that’s secured by a lien of some type in your property, either by your agreement or involuntarily such as with a court judgment or taxes. For example, a mortgage is a secured claim or a finance agreement for an automobile. If you do not continue making payments, the creditor could take back the property. A creditor can generally claim the property that secures the debt in the event of bankruptcy. Unsecured debt is not tied to any specific kind of property.

Q: Can I change from one chapter of bankruptcy to another?
A: Usually, yes. Generally, you can convert a case once to any other chapter for which you are eligible. There are issues to watch for when going from one Chapter to another which I can guide you through.

DEBT SETTLEMENT FROM SYD FINANCIAL

Q: How does this program work?

Debt Settlement works by negotiating the balance owed (principal) on your unsecured personal debt accounts through the time-honored process of creditor negotiation. This is different from simply reducing the interest rate as with Debt Consolidation and Credit Counseling, which do not affect the total debt balance. By negotiating the balance itself, Debt Settlement provides a much faster means of satisfying your debt. Most creditors are willing to accept a settlement below the balance owed in order to close out an account rather than lose the entire amount in a bankruptcy proceeding. From a business perspective, it is a matter of the creditor receiving something rather than nothing, as would be the case in most bankruptcies. Of course, different creditors have different policies, but as a rule, discounts are routine in the industry. As a consequence of this approach, money that was previously spent on endless minimum payments (most of which went toward interest charges) goes toward the negotiated debt balance. That’s why Debt Settlement through negotiation is the fastest debt satisfaction method short of Chapter 7 bankruptcy.

Q: Will this strategy work for me?

While the debt settlement approach is not suitable for everyone, its flexible nature makes it applicable to a wide range of financial circumstances. Here are a few guidelines to help you determine whether or not debt settlement is something you should consider:

1. Do you have a legitimate financial hardship condition?
Most debt problems are caused by loss of income, medical issues, or divorce/separation. These are legitimate financial hardships that can happen to anyone through no fault of their own, and any one of these situations can wreak havoc on a household budget. The important point here is that the debt settlement system is not a “free lunch” for people who don’t feel like paying their bills. If you are over your head due to a hardship circumstance, and you’d prefer to work things out with your creditors rather than declare bankruptcy, then debt settlement can provide an honest and ethical debt relief alternative.

2. Are you committed to satisfying your debt?
Debt settlement is best viewed as a better option, one that allows you to keep control over the process and maintain privacy while working through your financial difficulties. As with most things in life, success is determined by your level of commitment to staying the course, even when the road gets a little bumpy. If you are likely to give up at the first rough spot, then debt settlement is probably not the best choice for you. But if you are determined to satisfy your debt, debt settlement will likely be the most attractive debt solution for you.

3. Do you owe more than $10,000 in unsecured debt?
We are the first to admit that debt settlement is strong medicine, and it should be reserved for serious debt problems. While everyone’s budget is different, most people can work their way out of smaller debt obligations. If you only owe $5,000, for example, unless you are really in dire straits you can probably deal with that obligation the old-fashioned way – by paying off the debt in full, over time. In other words, smaller debt loads are more of a budgeting problem than a serious financial hardship. At SYD Debt Settlement, we use the benchmark of $10,000 for evaluating whether or not a prospective client qualifies for our program. (Note: Exceptions are sometimes made based on hardship circumstances, so the $10,000 figure should be used as a rule of thumb or guideline. If you aren’t sure whether you meet the requirement, please call one of our knowledgeable representatives at (866) 364-9161 for a free, no-obligation consultation.)

Q: What happens to my credit?

The effect of our debt settlement program on your credit score will partly depend on your current credit status before starting the program. Few people with debt troubles have perfect credit to begin with. In general, your credit score (usually called the FICO score) will decline during the program, and will begin to improve again after you have become debt-free. We recommend against applying for new credit while going through the program. It simply doesn’t make sense to take on new debt while you’re trying to tackle your existing debt problem. So the short-term decline in credit score is rarely a problem for clients.

Q: What are the tax consequences?

Financial institutions are required to report canceled debts over $600 (the portion forgiven during the settlement transactions) to the IRS, and the debtor is required to report that as income on their tax return. However, the IRS permits you to offset any “income” from canceled debts up to the amount you were “insolvent” at the time the debts were canceled. You are “insolvent” if you owe more than you own, or in other words, if you have a negative net worth. If you’re deep in debt, it’s not likely that you have a positive net worth, so it’s rare that a client would have to pay taxes on the forgiven debt balance. The exception might be an individual with a high level of home equity, which might make the overall net worth positive and thereby eliminate the insolvency exclusion. However, this is the exception rather than the rule. Ultimately, to get an understanding of how the program will impact you personally, we recommend speaking with a professional tax advisor.

Q: What about lawsuits?

While creditors have the legal right to bring a lawsuit for non-payment of a debt obligation, such lawsuits are far less common than most people think. It costs money to sue someone, and a legal judgment is simply a piece of paper unless there is a way to collect money against it. The threat of litigation, on the other hand, is all too common, even though debt collectors are not supposed to threaten legal action unless they are specifically authorized to bring suit. In general, lawsuits can normally be avoided, provided you are willing to work out suitable arrangements with your creditors through the negotiation process. Contrary to popular belief, most creditors would rather work things out amicably in a negotiated settlement than spend more money taking a customer to court (with no guarantee of being able to collect on a judgment). That’s why thousands of litigation-free settlements are transacted every month all across the country. Creditors won’t admit it publicly, but our method works much better for them than forcing people into bankruptcy through overly-aggressive collection techniques.

Q: Can my wages be garnished?

If you listen to some debt collectors, you might be fooled into thinking that they will seize your very next paycheck unless you make a payment right then and there. The threat of losing part of one’s wages to a garnishment action is truly frightening to someone already struggling financially. But this is mainly an intimidation tactic used by collectors to scare people into committing to a payment schedule whether or not they have the funds available. Actual garnishment actions are relatively rare, and do not happen without advance warning. First, a creditor must bring a lawsuit, obtain a judgment, and then take an additional step to obtain authorization for the garnishment. Plus only one creditor can garnish your wages at a time. No one can take your paycheck without court approval, and you must be given notice of such court action through formal documentation. So don’t be fooled by one of the oldest collection tricks in the book.

Q: What are the differences between Debt Settlement and Credit Counseling?

The most important difference between these two programs is that with credit counseling, you pay back all of the debt balances, plus interest and fees, whereas with debt settlement, you pay back only a portion of your debt load. That’s why debt settlement is a much faster path to debt freedom (2-3 years) than Credit Counseling (5-9 years). This means a lot less money out of your pocket is used through the debt settlement approach. Another key difference is that your debt settlement firm works solely for you, the consumer, and receives no compensation directly from the creditors. In other words, your debt settlement firm is truly on your side. With a credit counseling agency, there is a dual relationship, where part of their income comes from the client and the majority of it comes from kickbacks paid by the creditors. This creates a built-in conflict of interest and creates doubt as to whose side the agency is really on. Also, debt settlement provides much more flexibility than credit counseling in both the monthly budget level and the types of accounts that may be enrolled. For example, if you have a really tough month and need to skip a payment, that situation can be absorbed by a debt settlement program, whereas it will cause serious problems with a credit counseling program. Further, if your accounts have “charged off” and gone into the third-party collections cycle, you can still enroll those obligations in a debt settlement program where they will be rejected by a credit counseling agency.

Q: What kind of debt can be negotiated?

As a general rule, any type of unsecured debt can be successfully negotiated. An unsecured debt is one that is not tied to a specific material item that could be repossessed by the creditor. So an auto loan, for example, could not be included because the creditor could legally repossess the vehicle. Credit card debt, medical bills in collections, department store cards, signature loans, unsecured lines of credit, and revolving charge accounts are all types of accounts that can be included in our program. The main exception here are student loans, which in most cases are government backed loans that cannot even be discharged in a bankruptcy proceeding. (Private student loans that are not sponsored by the government can be included.)

Q: What if a creditor won’t negotiate?

In the course of business, we have established contacts with the major banks, collection agencies, and collection attorneys. Debt settlement is recognized as a viable solution by collection industry professionals, and at Square One Debt Settlement we pride ourselves on the professional reputation we have established by dealing fairly with creditors. In the rare instance where a creditor balks at accepting a reasonable settlement at the time it is proposed, it is often a matter of simply waiting for a different phase of the collection process. Some creditors are more inclined to play “hardball” than others, but virtually all of the major institutions eventually sell their accounts to collection agencies in order to get what they can for the account. Since the collections agencies acquire these accounts for pennies on the dollar, they are more inclined to accept a reasonable settlement offer, which still represents a profit on their purchase.

Q: Are there debts that can’t be entered into the program?

Secured debts cannot be entered into our debt settlement program. This includes home loans, second or third mortgages, equity lines of credit, auto loans, and financing contracts tied to a specific piece of property that may be legally repossessed by the creditor. Federal student loans, although unsecured, must also be excluded from the program. In addition, Federal and State taxes cannot be included.

Q: Can I do this myself?

Yes, it is certainly possible for a consumer to negotiate his or her own debts. However, there are several important factors that should be taken into consideration before making such a decision. First, do you have the time? For individuals with serious debt problems, the complexities of the negotiation process can be very time consuming. Many people simply do not have the time to add this labor-intensive task on of an already busy work schedule. Second, it requires a certain kind of psychological toughness to haggle with creditors. The average consumer is hampered by the embarrassment and shame they feel over having gotten into trouble. With all the tricks, traps, and pressure tactics used by creditors, most people will find themselves better off with professional assistance.

Q: Don’t I have to pay taxes on the money I save?

Yes you may have to pay income taxes on the amount you save, but this amount is usually still much less than the amount you would have paid in interest

1. A list of all creditors and the amounts and nature of their claims;
2. The source, amount, and frequency of the debtor’s income;
3. A list of all of the debtor’s property; and
4. A detailed list of the debtor’s monthly living expenses, i.e., food, clothing, shelter, utilities, taxes, transportation, medicine, etc.
Married individuals must gather this information for their spouse regardless of whether they are filing a joint petition, separate individual petitions, or even if only one spouse is filing. In a situation where only one spouse files, the income and expenses of the non-filing spouse is required so that the court, the trustee and creditors can evaluate the household’s financial position.

Individuals may use a chapter 13 proceeding to save their home from foreclosure. The automatic stay stops the foreclosure proceeding as soon as the individual files the chapter 13 petition. The individual may then bring the past-due payments current over a reasonable period of time. Nevertheless, the debtor may still lose the home if the mortgage company completes the foreclosure sale under state law before the debtor files the petition.11 U.S.C. § 1322(c). The debtor may also lose the home if he or she fails to make the regular mortgage payments that come due after the chapter 13 filing.

Between 20 and 50 days after the debtor files the chapter 13 petition, the chapter 13 trustee will hold a meeting of creditors. If the U.S. trustee or bankruptcy administrator schedules the meeting at a place that does not have regular U.S. trustee or bankruptcy administrator staffing, the meeting may be held no more than 60 days after the debtor files. Fed. R. Bankr. P. 2003(a). During this meeting, the trustee places the debtor under oath, and both the trustee and creditors may ask questions. The debtor must attend the meeting and answer questions regarding his or her financial affairs and the proposed terms of the plan.11 U.S.C. § 343. If a husband and wife file a joint petition, they both must attend the creditors’ meeting and answer questions. In order to preserve their independent judgment, bankruptcy judges are prohibited from attending the creditors’ meeting. 11 U.S.C. § 341(c). The parties typically resolve problems with the plan either during or shortly after the creditors’ meeting. Generally, the debtor can avoid problems by making sure that the petition and plan are complete and accurate, and by consulting with the trustee prior to the meeting.

In a chapter 13 case, to participate in distributions from the bankruptcy estate, unsecured creditors must file their claims with the court within 90 days after the first date set for the meeting of creditors. Fed. R. Bankr. P. 3002(c). A governmental unit, however, has 180 days from the date the case is filed file a proof of claim.11 U.S.C. § 502(b)(9).

We wish debt settlement was that easy, however it is not. In order to successfully negotiate a settlement with your creditors/collectors it requires a well thought out plan of phone calls and settlement proposals over time.

Debt negotiations require the unpublished knowledge of the policies and procedures of hundreds of companies regarding how settlements are handled. A tactic that works with one company could have the reverse effect and cause another company to become more aggressive

It begins with our philosophy, which is one of “full disclosure.” That means we are telling perspective clients the whole story up front, both the benefits and the potential downside’s of debt settlement and making every effort to set the proper expectation upfront.

We welcome the opportunity to learn more about your situation and together we can determine if our program will be able to help you resolve your current financial crisis and get back on the road to financial freedom.

Contact SYD at 1 866 364 9161