Debt Settlement Company FreedomDebt.com Offers Debt Advice, Explains Solutions for Over-Extended Consumers
Jeremiah Martin, co-CEO of debt settlement company FreedomDebt.com, offers debt advice for anxious Americans.
San Antonio, TX (PRWEB) January 13, 2009 -- Leading debt settlement company FreedomDebt.com recognizes the turbulent economic situation facing many Americans. To help ease anxiety, the company has compiled key debt advice for individuals to familiarize themselves with prior to relieving debts.
"We no longer need the media to tell us these are tough times. Many have used credit to keep up with daily life or have cashed in on what used to be home equity to pay off credit cards. For them, and many others, just making minimum monthly payments is getting harder every day," says Jeremiah Martin, co-CEO of FreedomDebt.com. "To avoid further financial problems down the road, people need to follow professional debt advice and be aware of the differences between debt reduction programs before they take action toward a solution."
Bankruptcy is not the financial fresh start it used to be, Martin says. With the "creditor friendly" Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, bankruptcy is much more difficult to qualify for. Chapter 7 Bankruptcy allowing an individual to be forgiven of, or discharge, debts now requires passing a "means test" where the individual's level of financial hardship versus assets and income is assessed.
"Chapter 7 Bankruptcy dropped 80 percent in 2006, thanks to the new laws. This made creditors very happy, but most folks seeking bankruptcy relief are now saddled with a court-ordered repayment plan," Martin says. "You might not only have to pay a portion of previous bills, but your credit score may be marred for the duration of the repayment period (usually five years) plus an additional seven years the bankruptcy stays on your credit report after discharge. Add all the legal fees associated with filing and the possible debt repayment plan, and whether it's 7 or 13, bankruptcy may end up being ugliest chapter in your life."
Another option is credit counseling, an assistance program to guide debtors through financial hardship. Generally, counselors assist in reducing interest rates on credit cards by a few percentage points, payments may be consolidated and the counselors are in place to ensure payments are made. For this help, counseling companies receive fees from the debtor and "Fair Share" compensation from creditors. The combination of Fair Share and fees from debtors, Martin says, enables credit counseling to be a wildly successful industry. It's important to note that while a credit counseling participant's credit score may not be directly affected, most lenders view participation as bad as, or worse than, bankruptcy. Contrary to popular belief, the payments my not be lowered with credit counseling. In fact, reports show as much as 80 percent of participants who enter a credit counseling program fail.
Aside from bankruptcy and credit counseling is debt settlement. A debt settlement company like FreedomDebt.com contacts creditors and reduces actual debt by negotiating the principal balance owed. This plan allows for one monthly payment to a savings account used to pay creditors. Unlike credit counseling, the payment can be much lower because debts are typically settled for 30 to 50 cents on the dollar; participants may end up paying one-third of what credit counseling would cost as the principle balance is reduced, not just the interest. Debt settlement also tends to have less of a negative effect on an overall credit profile than credit counseling or bankruptcy, and puts debtors in the unusual position of being debt-free within as little as 24 to 36 months in most cases.
"One of the greatest things about our plan is it allows us to immediately put extra cash back in the hands of people struggling with debt," Martin says. "While every debt reduction program has some drawbacks, FreedomDebt.com has worked hard to provide the most transparent, easy experience possible in our industry. The reasons for joining the program far outweigh possible negatives for anyone experiencing significant debt. When it comes to obtaining a secure financial future, FreedomDebt.com is by far the best solution on the market for my people."
FreedomDebt.com offers people struggling with debt a free, customized debt analysis and a free copy of its budgeting guide. For more information or debt advice from FreedomDebt.com, a leading debt settlement company, call 888-710-3328 or visit www.freedomdebt.com. To view FreedomDebt.com's national and local TV news and talk show interviews, visit http://www.freedomdebt.com/press.php.
About FreedomDebt.com
FreedomDebt.com, headquartered in San Antonio, Texas, offers a debt settlement program that helps individuals and families experiencing financial distress to quickly reestablish their fiscal footing. FreedomDebt.com negotiates with creditors and establishes a feasible, practical way for clients to pay off not just their interest rates, but also their balances.
Media Contact:
Dan Brunner
FreedomDebt.com
888-710-3328
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