Getting Debt Help from a Debt Consultant vs Debt Specialist vs Credit Counselor

Debt can cast a shadow over an individual’s life. Regardless of how they incurred the debt, the inability to settle it in a timely fashion can do more than harm the person’s credit score. It can also cause a pervasive sense of stress, especially if debt collectors are calling and sending a flurry of emails.

When you experience this situation, and you currently lack the means to end your indebtedness, what should you do?

To put your financial life back on course, you could pursue debt help from a debt consultant or a debt specialist, or you could seek the assistance of a credit counselor. However, while each option can help restore a healthy state of finance, they do so in different ways. Depending on your unique situation, one option may be a better fit than the rest. With that in mind, let’s look at the difference between these three professionals.

Three Types of Debt Help

1. Debt Consultants

Debt consultants are financial professionals who specialize in advising people on how to achieve debt relief. Moreover, they help you develop a viable plan for paying off debt by managing your finances more effectively. In order to provide this type of debt help, a debt consultant performs a complete analysis of your current financial situation before potentially negotiating debt with your lenders.

Although debt consultants can work with creditors to reduce the amount of debt you owe, they may also help you address debt by suggesting other means, such as debt consolidation via their affiliates.

Debt Negotiations

There are multiple steps to the debt settlement process, and a debt consultant can help guide you through each of these. First, you’ll demonstrate your financial hardship and the reason you need to negotiate your debt. Next, your consultant will review your finances and credit report with you to determine what portion of your debt you’ll be able to handal, which is typically expressed in a range. Next, the consultant will speak to your lenders on your behalf and, potentially, get them to agree to the smaller amount due. If your creditors agree, you will begin the process of repayment but for a much more manageable amount.

Debt Consolidation Planning

In a debt consolidation plan, you can roll multiple debts into one, allowing you to make a single, scheduled payment on the amount until it is paid in full. Because the consolidated debt may have a lower interest rate than the debts that comprise it, you can eliminate your debt faster. However, because the amount of the payment depends on the dollar amount of the debts consolidated, debt consolidation planning works best for debts that aren’t excessive.

Most people receive debt help through debt consolidation in one of two ways. They transfer debt to a balance-transfer credit card that has 0% interest during the card’s promotional period, then pay off the debt before the promotional period ends; or they receive a fixed-rate debt consolidation loan, use it to pay off their debt, then pay off the loan in installments.

2. Debt Specialists

Professional consumer debt specialists retain the title of “Certified Consumer Debt Specialist (CCDS)”, which they receive upon passing the CCDS exam from the Center for Financial Certifications. To retain the certification, specialists must complete 20 hours of continuing education every two years, dealing with a variety of personal finance disciplines, including: budgeting, debt load evaluation, avoidance and elimination of debt, and retirement planning.

Like debt consultants, one of the primary goals for debt specialists is to achieve a debt settlement agreement. In some cases, the payment could be 50% less than what you originally owed! Their expertise and ongoing relationships with creditors is why you should work with a debt specialist or debt consultant, instead of trying to complete these negotiations on your own.

3. Credit Counselors

A credit counselor is a third financial professional who assists people with getting their lives on track in the face of significant debt. Credit counseling organizations are usually non-profit entities that offer free or low-cost debt help services to their clients. In doing so,

counselors largely advise people on managing their money and debts, and help them budget payments.

Debt Management Planning

Debt management differs from debt consolidation in that it doesn’t involve loans that aid debt repayment. Instead, a debtor’s creditors collectively agree to repayment terms that the plan establishes. The debtor then makes scheduled payments to the credit counseling company that facilitated the debt help plan, and they disburse separate payments to each of your creditors.

In most cases, the plan doesn’t reduce the amount of debt owed. Rather, the monthly payment on a debt and/or interest rates are lowered to make it easier for those in debt to repay. When creditors agree to the plan, they also agree to halt debt collection efforts and not charge late fees, as they receive payments. Unlike some debt help agreements that are formed with creditors, agreements achieved with the help of credit counselor typically don’t have tax implications.

Conclusion

Debt consultants, debt specialists, and credit counselors use different methods to help people address debt, and eventually regain a good financial standing by doing so. Is one of these groups of financial professionals better equipped to help you?

The answer depends on certain factors, such as whether you have a high level of debt that is ideal to settle with a negotiated lump sum, or a lower level of debt that’s feasible to pay off in installments. At the same time, it’s important to look at which financial professional offers the most options, and the most holistic approach, on behalf of clients. That designation typically belongs to debt consultants.

Contact Liberty Debt Relief

If you need debt help with resolving personal debt, and you wish to pursue a new agreement with your creditors, don’t negotiate without a debt consultant on your side. Whether your debt is significant, relatively minor, or somewhere in-between, our experts atLiberty Debt Relief can provide the services you need for a new financial start. Contact us today to schedule a consultation for your debt situation. We look forward to helping you live outside of the shadow of debt.

/0 Comments/by

What Does the Process of Settling Credit Card Debt Look Like?

Credit cards can be a great help when you need some extra spending power. However, the buy now, pay later proposition of credit cards gets many people into a financial jam when it comes time to repay their creditors. Consequently, many people carry a balance on their card that grows ever larger, until credit card debt settlement may be the best solution. In fact, settling credit card debt is one of the most common financial processes in the U.S.

Because most credit cards carry a high interest rate, repaying thousands of dollars in a timely manner often requires debt negotiations. If you are in a position where you need to pursue credit card settlement with the assistance of a credit consultant, below is a step-by-step process of what settling credit card debt is likely to entail.

1. You Provide Proof of a Serious Financial Hardship & Other Necessary Documents

A financial hardship is likely what is keeping you from being able to make large debt payments on time and constantly. That’s why, before receiving debt relief assistance, you may be required to provide evidence of a financial hardship. This may include proof of income via pay stubs or W2s and proof of outgoing bills, including a mortgage, car loan, hospital bill, utilities, and even debt repayments.

When seeking debt settlement services, you may want to also bring your credit report with you or have your consultant get ahold of it for you. This is a great tool for you and your debt consultant to use to build your case for why you need to negotiate your debt. In addition to showing the details regarding all your different debts, our report could include evidence of credit delinquency, such as unpaid debts or consistently late payments, that lenders will take notice of and may want to resolve through a settlement.

2. Your Debt Consultant Proposes a Settlement Amount

Based on the amount of debt you carry, as well as how much money you will be able to put towards your credit card debt settlement repayment, your credit consultant will approach your creditor to propose a settlement amount. This could be up to half of what you originally owed, but it’s important to have a range of what you can reasonably afford to pay, complete with a high and a low end.

Because of your financial hardship, many lenders are willing to accept a portion of what you owe. It allows them to collect some of the debt, rather than none at all. Moreover, when choosing a debt consultant, find one who has a great working relationship with various creditors. Their experience may help your lenders trust the outcome of the negotiations and make them more willing to agree to a new debt amount.

3. The Money You Owe Creditors is Put into an Account

The money that is needed for your settlement may be collected from you gradually and put in a secure account. It could be your normal savings account, or it may be a new one that is proposed and set up by you and your debt consultant. Remember, you should always have access to that money, no matter where it’s kept safe.

After that, you and your debt consultant may set up a payment plan with your lenders that will automatically occur either monthly or all at once, depending on the agreed-to terms. This distribution process means you don’t have to worry about remembering to make regular payments or about being late.

4. You May Need to Pay Taxes on the Money Saved

Depending on how much you originally owed and how much you end up settling your credit card debt for, the IRS may recognize the amount of money you saved via negotiations as taxable income. It also depends on how much you funneled into your special debt account and how long it sits in the account. In most cases, the taxes are minimal. However, if the money sits in the account for a year or longer, paying taxes is a likely reality. With that said, the amount you are likely to pay in taxes is probably worth settling a debt that would cost you far more in the long run.

5. Pay the Required Debt Consultant Fees

Debt specialists typically don’t work for free. However, the fees that they charge are sensitive to the fact that those whom they help are in a difficult financial position. It is likely the amount they charge will be based on a percentage of the settlement amount. The good news is that a debt consultant should let you know upfront exactly how much they will charge, so there is no guesswork involved. More importantly, it is against the law for any debt relief company to charge for their services before they actually provide you with help.

6. Start Paying Back the New Amount Owed

Now that you and your consultant have proven why you need assistance, determined how much you can reasonably pay back on the amount you owe, and gotten your lenders to agree to the new amount, you can start the repayment process. After debt settlement negotiations, creditors will expect your payments on time.

If you didn’t set up a separate account with automatic disbursals, as discussed above, you’ll have to remember to budget carefully and have the amount due each month by the specified date. Late payments on a negotiated amount will incur serious late fees and could cause your lender to distrust you and pull back on the agreement.

Conclusion

Settling a credit card debt often involves several unique steps like these, which a credit consultant can apprise you of. Your settlement process may happen precisely according to this list, or it may involve fewer steps of a different nature. To get started on credit card debt settlement, please contact Liberty Debt Relief today to schedule a free consultation.

/0 Comments/by

What to Do When You Owe the IRS Money

Many things get people stuck in a tax debt quagmire with the IRS, including personal income tax withholdings that don’t offset income tax liability, owning non-income property of significant value, and winning heavily-taxed prizes. The taxes, size of debt, and assets taxed vary widely, but they are dealt the same financial hand of fate: someone will owe the IRS money. Where the decimal point will fall, and how to pay the IRS the money owed, are the prime concerns.

I Owe the IRS Money: Now What?

When you first open the friendly mailing that states your tax debt in bold font, financial order can become entropic in a wink. A debt-based game of mental dominos ensues, as you rethink how to spend, how much to spend, and when. It’s instant damage control. But after all of the chips fall, the balance of several digits remains — and because time is money to Uncle Sam, your debt has a due date, too. If you can’t write a check to pay it, what should you do?

Peace of Mind Begins with a Plan

Before making any big, quick decisions, such as liquiding jewelry you wouldn’t otherwise sell or accepting a bank loan that has less than ideal terms, stop and take a breath. If you owe the IRS money, and the debt is more than you might normally considering carrying, it probably took at least several months to accrue. The debt may even be several years old, and you’re just now getting the news.

If the debt is too large to pay by the due date, the best option is consulting a debt specialist. They may be able to help you choose a debt relief payment plan that the IRS accepts. But before we discuss plans, let’s respond to a question that may be on your mind: does your tax debt put you in jeopardy of jail, or do you simply need help with debt that needn’t involve an attorney?

Criminality as a Spectre of Worry

As they consider how to pay the IRS, some taxpayers worry they are in more than a difficult financial situation. They also fear their debt indicates a federal crime has been committed. In some instances, they are right. However, the vast majority of tax debts are incurred without criminality. Tax fraudsters act with premeditation; they want to pocket what they owe the IRS.

Unless you knowingly defrauded the IRS, and they have clear proof indicating that you did, you won’t be reading up on tax law as a jailhouse legal scholar. If you made tax mistakes — even multiple mistakes, year after year — the government considers them mistakes that demand financial recompense, not felonious violations that could put you in a prison yard.

Preparing to Pay: Mindset Matters

There will be short layover between the time you receive a statement that you owe the IRS money and the implementation of a plan for how to pay the debt. During the interlude, you’ll meet with a debt consultant to select a payment plan. You’ll also have time to reflect on your situation. As you do, try not to persist in a hindsight of despair. Instead, try to learn from what happened, and see a brighter future.

Nearly everybody who owes the IRS money — and all taxpayers, for that matter — have tax situations comprised of tedious facts, which results from two things: the alignment of taxpayer identification with respective tax status, and the terms by which the IRS — and parties with which it works — organize the multitudinous details to help prevent their own and others’ errors.

If you know what’s owed, why it’s owed, and when to pay, you have the information you need.

How to Pay the IRS: Three Options

The IRS may be inflexible about collecting debt, but they are more flexible about payment options for debt collection. Here are three ways to pay tax debt you can’t pay upfront, in full:

1. Installment Agreements

If you owe the IRS $50,000 or less, you can file for an installment agreement, which gives you up to 72 months to pay the total amount owed. Payments are made monthly. In addition to making out a check, you can set up automatic debit card payments to ensure timely remittance.

2. Loan / Credit Payment

You can also use a bank loan or credit card to pay what you owe the IRS, and then repay the loan or credit card balance. This trades one debt for another, but it can be to your advantage if the loan or credit card interest rate is significantly lower than the interest rate for the tax debt.

3. Offers in Compromise

In this arrangement, the IRS accepts a lower total amount than owed, which it receives from you within a shorter timeframe than extended payment plans would provide. The offer is accepted if the IRS feels the amount is the most money it could collect from you within a “reasonable” period of time.

Conclusion

If you owe the IRS money for personal taxes, you may not have to pay it all at once. The debt consultants at Liberty Debt Relief can help you choose an affordable plan for how to pay the IRS that reduces stress. Ready to eliminate tax debt? Contact us today for a free consultation.

/0 Comments/by

Best Budget Planner for your Phone or Computer

Taking control of your finances does not have to confine you to a life of endless computer tabs, stacks of bills, and an old calculator you had to dig through the junk drawer for. These days, the best budget planner is one that you can take on the go. By downloading a mobile app that you can easily use whenever you need, wherever you are, you can better monitor your finances at all times of the day.

Check out some of the best apps available for setting a budget to pay off a debt, starting a healthy savings account, and meeting your financial goals.

1. Mint

Healthy spending habits begin when you have a budget you can stick to. Mint is a budget planner app that easily connects to your bank and credit accounts to help keep you accountable. Along with using your income and expenses to help you determine what money you have left for spending on non-essential items, such as shopping and vacations, Mint will also send you alerts so you are never late paying your bills. You can also set up goals on your account to save up for certain items or outings. The financial goal will become a part of your budget, so you can easily allocate money towards it every month.

2. Pocketguard

Pocketguard is a great way to make the best out of your mobile budget planner. The app was built in a similar way to Mint in that you can connect it to your banking accounts, however, you can also take it a step further and connect it to your investment accounts as well. Pocketguard also allows you to see your available funds in real time and will show you money under an “in my pocket” category that aims to prevent you from overspending after you pay off bills. One of the best features of the app is that it can automatically set a budget based on your income, bills, and goals and will regularly send you tips on how you can negotiate lower payments (which, ironically, is our specialty at Liberty Debt Relief, so make sure you contact us) or reduce overall spending.

3. Simple

For those who prefer having a streamlined financial plan, a great budget planner app to use is definitely Simple. Unlike many other budgeting applications, this one serves as a bank account as well. With Simple, you can create an account with an FDIC-insured bank that adds interest to your account and also provides easy to understand budgeting tools. The goals section will show you how much you have left to save for a purchase, and the Safe-to-Spend feature will show you how much money you really have available to spend without missing out on bills or other important expenses. The best part is that all these features are completely free of fees.

Take Your Budget To-Go, Today

Staying on top of your finances does not have to be stressful or difficult. By downloading one of the best budget planner apps available, you can spend your days counting down to the day you’ve saved up for that reward instead of counting down until your bills will be considered past due.

Work with Liberty Debt Relief today to learn more about budgeting and negotiating overwhelming debt so you can save even more and reach your financial goals.

/0 Comments/by

Unnecessary Expenses to Cut Today and Pay Off Debt Faster!

Being low on money is stressful, but the truth is that it really does not have to be. For many people, the most effective way to pay off your debt fast is by simply building a debt relief plan and cutting out the expenses that are not necessary. Between the hustle and bustle of everyday life and the constant swarm of advertisements and great deals, it is all too common for people to end up spending extra hundreds or even thousands of dollars on things they can do without.

Read on to find out what expenses we at Liberty Debt Relief suggest you start eliminating today.

Subscription Services

If you are like many other Americans in need of debt relief, you probably love the convenience of subscription services. But if you are looking at how to cut expenses, these services are also the best place to start. Consider asking yourself a few questions about the streaming and delivery services you use: Do I really watch Netflix and Hulu enough to make this worth it? Is this meal delivery service actually saving money on groceries for my family? How often do I really need new perfumes and cologne? You will probably be very surprised when you sit back and realize how much money you have spent on products and services that are piling up around the house.

Dining Out of the House

As great as it is to have a new kind of cuisine by simply walking in and out of your favorite restaurant every day, there is a good chance that doing so is wreaking havoc on your budget and jeopardizing your financial health. If you truly want to pay off your debt as fast as possible, consider spending less time in drive-thrus and more time in the kitchen. Whether your appetite vice is a Starbucks frappuccino, sesame chicken from your corner Chinese restaurant, a burger from the local pub, or any combination of the three, making these foods at home could save you hundreds of dollars a month.

Manage Your Utilities

A common issue for many is managing utilities. Depending on where you live and what utilities are necessary for your home, it is likely you spend several hundred a month on simply using electricity, adjusting your home’s temperature, and using water. If you are looking at how to cut expenses, start by making these services cheaper for yourself. For electricity, consider switching to LED bulbs, which save electricity and are better for the environment as well. You can also try to use more natural light by opening up the blinds, unplugging electronics when not in use, and keeping your home at a comfortable temperature that doesn’t require the air conditioner or heater to constantly run. You should also consider minimize water use by shortening your showers and limiting the time it takes to wash dishes or use the dishwasher.

Limit Your Personal Spending

Another key to limiting your debt is limiting the amount of money you spend on personal things every month. Your personal purchases, such as clothes, salons, vacations, gym memberships, and accessories, should be budgeted every month. While those activities and purchases are always fun, they can cause high damage to your bank account. Limiting how much you spend will save your pockets so you can spend more time doing what you love when you get out of debt.

Learn How to Pay Off Your Debt Fast

If you are looking to revamp your budget and want to know how to cut your expenses, look no further. Contact Liberty Debt Relief today and we will get you on the path to financial health, wealth, and happiness.

/0 Comments/by

Personal Loan or Credit Cards: Hardest to Deal w/ & Easiest to Settle?

Getting ahead financially takes a lot of time, patience, and well-researched knowledge. There are dozens of types of credit available out there, which can make determining how to manage them a little confusing at times. If, however, you are specifically looking to choose between personal loans or credit cards and want to understand how difficult each will be to pay back, then things are about to get a little easier. In fact, if you ever have to undergo the process of credit card and personal loan debt settlement, you’ll find it’s similar for both. Here are the details you should consider before opening your next line of credit or signing that loan agreement.

Consider the Fine Print

To know how easy or difficult it will be to settle credit card debt and personal loans, it is always good to start with the financial fine print. Personal loans usually have a much smaller interest rate than credit cards because you are agreeing to borrow for a certain amount of time, whereas credit cards are a somewhat indefinite relationship. When it comes to debt settlement, you really want to minimize the accounts you choose to negotiate. If you could settle on your credit card, which will likely have a higher interest rate, and can find a way to pay off the personal loan, it would be ideal for your current and future financial situations.

When it comes to certain types of personal loans, settling may even be a difficult option. When you originally agreed upon the loan, you should have seen if the borrowed funds were part of a secured or unsecured deal. Essentially, if you had to offer up some kind of collateral upon signing the loan, it will be a secured deal. Unsecured personal loans are often simpler to negotiate for settlement, but unfortunately, secured loans may not be eligible because you offered up collateral that the lender is able to take if you can no longer make payments due to a financial hardship.

Find Out How Much You Owe

The smoothness of the credit card debt or personal loan settlement process also stems from how much you actually owe. The larger the sum of money and its corresponding interest rate that you owe a lender, the more you are going to have to pay within the settlement. Credit cards will often be a little easier to negotiate because, when you received the card, you did not agree to a specific amount of money you would spend throughout the time you owned the card. Credit card lenders usually know that their high interest rates and fees can be burdensome and, with the help of a debt consultant, you can usually convince the lender to lower or even eliminate those fees, along with some of the debt.

Although personal loans are easy to manage because they are a lump sum in your bank account that you do not have to worry about maxing out, they may be a bit more difficult to negotiate. When you sign up for a loan, you specifically agree to pay back the specified amount within a set number of months. Loan companies will use that agreement to their advantage. You may be able to reduce the interest rates or cut off a couple of months of payments from an unsecured loan, but you will likely still have to pay a bulk of the amount borrowed.

Talk to Trusted Experts Today

Understanding personal loan settlements and how to settle credit card debt can seem confusing, but it does not have to be. There are so many different credit card companies and loan lenders out there, each with their own policies, fees, and processes for dealing with outstanding debt. The best way to figure out how to handle your personal loan and credit card debt and deciding if you should settle them is by working with an experienced debt consultant. Liberty Debt Relief always has staff on hand to help guide you to the right decision that will leave your finances better than ever. Contact us today to find out how you can go about settling your personal loan and credit card debt.

/0 Comments/by