Bill,thanks for being there. I've scanned most responses and my income range job status is very different. I have no taxable income. I was injured on the job on 01-2008. I collected T.D. benefits for 22 mo. The amount covered our card and loan debts. We own our home in a very small community and will retire here. We have a auto loan of $380.00 mo. 4yrs left. My card, loans are $14,000.00 @ 29%. Mo. payments min. are approx. $450-500 mo. My settlement offer would save us but I had to appeal their offer for incomplete med. records which will increase offer by a fair amount per my attorney but it has been 4-5 mo. since appealed. I collect $215.00 wk. which is half funds needed per mo.I have used $10,000.00 so far via a 401k plan($5,000.per yr.for 2yrs.)I have additional funds but this is taking too long to settle. So I spoke to FDR today and they said I would most likely meet the debt settlement schedule but what will I base the income amt. on? I have been on time till 2mo. ago on a citifinance loan which is my highest paymt. ($210.00mo.) I was behind for a short term,caught up last mo. via 2nd 401k distribution of $5,000.00 which is in my checking acct. I can supplement my other fund shortage for 4-5mo.But these funds show in my acct.till depleted at yrs. end then I do it again never thinking it would take this long to settle. So my question is, if I apply for DSS at FDR will my funds in bank accts. affect proposal schedule and what will my payment schedule be base on? My taxable income in 2009 was $6,000.00 via 401k withdrawal. At this time my attorney has no time stats on the settlement. I have been in a stressful time over this. I was earning over $65k in 2007 and I've deemed 33% permanent disabled physically and mentally. The latter is still being documented and will need further treatment. I've been instructed NOT to return to my profession of 25 plus yrs. per future workplace exposure and retraining is in question further treatment for mental ability to learn. What is your advice as a repayment amount may be based upon and how I should get us out of debt? I know my present income is draining my retirement funds and also keeps me from S.S.I. benefits. I have also spent over $5,000.00 of savings through this ordeal. Settlement could be a year or more away.
Let us start with some background information.
Debt settlement, also called debt negotiation, is a process by which your lenders agree to forgive a part of your balance, saving you a significant percentage of what you owe. You then only have to pay the new, reduced amount. In some cases, you continue to make monthly payments, in others you must make a lump-sum payment.
An individual that is considering enrolling in a debt settlement program, such as that of Freedom Debt Relief's, will be required at some point in the process to provide the company information pertaining to their income. Income consists of the following:
It is important to keep in mind that the more detailed and thorough you are with demonstrating how much income you have, the easier it is for an underwriter, negotiator, or a creditor to understand your financial hardship. A reduction in income is typically the main reason a person finds him or herself in a financial hardship, the kind of hardship that may lead the person to seek debt help. By highlighting this fact it will allow for a debt settlement company, like Freedom Debt Relief, to assess your situation and leverage these facts in negotiating a settlement.
Typically assets such as how much money you have in your bank accounts do not necessarily impact the program length or payment schedule in a debt settlement program. However, if you have a considerable amount of funds in a savings, checking, certificate of deposit, or other accounts it is typically advisable to use the funds to accelerate the settlement process. There maybe a situation while in the debt settlement program where a creditor is willing to settle, but you may not have sufficient funds set aside in your special purpose account to settle the debt. In this circumstance it may be advisable to use the assets or funds you have set aside to settle the debt as soon as possible.
Debt settlement programs, such as the ones that Freedom Debt Relief have to offer, are an effective method for resolving debt problems for people who can no longer afford their minimum monthly payments. Many companies offer payment plans that can last up to five years with estimated settlement amounts that can save individuals up to 70% of their total debt. Companies that offer these long term plans and high estimated savings figures can result in detrimental outcomes for the individual enrolled in the program. It is better to be conservative with a debt settlement plan.
In other words, it typically makes better sense to pay as much as possible to have the debt settled in the shortest time possible. It is not advisable to take the lowest payment for the longest term just because it is easy or feels comfortable. One must keep in mind that by extending the time frame it can mean a higher risk that a creditor will take legal action against the individual.
Furthermore, making the lowest possible payment can result in not having sufficient funds available if a creditor is willing to settle. Therefore, you can miss an opportunity for a settlement. If you determine that debt settlement is the right choice, then you must take into consideration the risks involved, and the best strategy to complete the program as soon as possible.
I hope this information helps you Find. Learn & Save.