Debt Settlement Services in Hawaii
Alternative Approach to Bankruptcy
End Creditor Harassment
Debt Settlement or Debt Negotiation Explained
With our debt negotiation program, our goal is to help you avoid bankruptcy, and still become debt-free!
Chapter 7 and Chapter 13 bankruptcy are not the only options for our clients. We offer debt negotiation and settlement services. Our staff will review all your options so you can make the best decision for yourself and your family.
Take a closer look at these numbers:
- -$20,000 balance owed on Credit Cards.
- -$40,000 if paid off diligently.
- -$30,000 if paid through Consumer Credit Counseling Services (and results in Bad Credit.)
- -$140,00 if minimum payments over 10 years.
- -$11,000 if negotiated by a qualified lawyer For clients interested in debt settlement, our goal is to help you avoid bankruptcy, and still become debt-free!
Dangerous Consumer Credit Counseling Plans–Warning!
Our Honolulu debt negotiation services is not the same as Consumer Credit Counseling. With Credit Counseling, you pay all your creditors back in full with an adjusted interest rate over 5 to 7 years. We perform true Debt Settlement Plans, eliminating 40 to 60% of the amount you owe. Many of my clients come to me after spending up to two years with a consumer credit counseling program. Usually they find that they are no closer to being debt-free than when they started. Their accounts are marked as seriously delinquent, and not all of the creditors agree to the management plan. In fact, some of them file lawsuits to collect. In many cases, consumer credit counseling programs generally increase your monthly payments until there is virtually no benefit from the program.
Relief From Stress and Strain of Debt
This Debt Negotiation Program reduces your unsecured debt burden through direct negotiation with your creditors. In this program, your creditors are contacted about your financial set-backs and offered a settlement deal in order to satisfy the balance of your debts. In many cases, if you qualify for the program, you can obtain significant settlements in interest and principal. Bankruptcy is not filed, and you’ve still eliminated a vast portion of your debts in 30 months or less.
Your Creditors are Contacted and Required to Deal Only with Your Representative
That’s right. While you’re working to pay your debts, collection agencies and their attorney’s are forced to deal with your lawyer instead of you.
One Consolidated Payment
After a financial analysis of your situation, one monthly payment will be arranged for you in order to pay off your creditors. You don’t have to juggle your monthly finances or throw darts at which bills get paid this month.
Different From Consumer Credit Counseling
Unlike Consumer Credit Counseling whereby an intermediary acts to reduce interest and monthly payments, our Debt Settlement Plan reduces the principle owed. This produces a good chance that you will be able to pay off your debts in a much shorter period. It will provide you with considerable financial savings and a quicker arrival to your destiny: peace of mind.
If you don’t do something with your credit cards, the repayment burden can out-last even you. If you take any credit card balance and just pay the minimum payment (usually 2%) and use an 18% interest rate, the repayment would last 24 years. That is correct, and that is without the penalties and extra interest charges assessed when you’re late. More than 80% of the national work force is dependent on two incomes due in large part to personal debt. Call today or fill out our online questionnaire to set up a confidential analysis of your situation. We are ready to determine whether this powerful debt management tool could produce real financial and emotional benefits for you.
What actions must a collection agency avoid?
Under the Fair Debt Collection Practices Act, a collection agency may not act in the following ways:
- Third-party communications. The collection agency cannot contact third parties other than the debtor’s attorney or a credit bureau for any reason other than to locate the debtor. Collection agents who contact third parties must state their names, and may only add that they are confirming or correcting information about the debtor. They cannot give the collection agency’s name unless asked directly. They cannot state that they are calling about a debt. Collection agents may not contact a third party repeatedly unless they believe an earlier response was wrong or incomplete and that the third party has revised information. Further, collection agents cannot communicate with third parties by postcard or by correspondence that uses words or symbols that betray their collection motive.
- Attorney-represented debtor. A collection agency cannot contact the debtor directly if a qualified bankruptcy lawyer represents them. However, if the debtor gives a specific company permission to do so it is permissible.
- Debtor communications. Collection agents may not contact debtors before 8:00 a.m. or after 9:00 p.m., or at another inconvenient time or place. Collection agents also may not contact a debtor at work if they knows that the employer bans receipt of collection calls.
- Harassment or abuse. Agents cannot threaten or use violence against the debtor or another person. They cannot use obscene or profane language. They cannot publish a debtor’s name on a “blacklist” or other public posting. Agents cannot call repeatedly or contact the debtor without identifying themselves as bill collectors.
What is the different between a debt workout and a debt consolidation?
A credit card debt “workout” is also referred to as a negotiated settlement. For example, if you owed $5,000 on a credit card and agreed to pay $2,000 as a settlement in full, this would be a credit card debt workout. Firms who perform this type of work may identify themselves as debt management, debt relief, debt workout, debt settlement or debt consolidation. However, I define debt consolidation as a reorganization of the debt through a credit counselor or taking a debt consolidation loan to pay off the debts in full.
Who is eligible for a debt workout to get out of credit card debt?
Creditors typically agree to debt settlement arrangements where they feel a settlement of the debt will be in their best interest. In most cases they come to this conclusion because the person requesting the debt negotiation appears to be a legitimate candidate for bankruptcy. Knowing that in most bankruptcy cases they would receive nothing, they opt to take a discounted settlement on the debt rather than receive zero dollars in a bankruptcy.
What would trigger them insisting on my income and asset information as a part of the debt settlement negotiation?
Let’s assume that after seeing your credit report and some preliminary information the creditors make a high debt settlement offer such as 75 cents on the dollar. In order to persuade them to take a debt settlement less than their initial offer, they might demand further evidence of your financial hardship including financial statements. Then, with evidence in hand proving the person’s lack of ability to repay the debt, the creditor may consider a debt reduction allowing a pay off in a much lower range.
What is a typical settlement percentage?
Most of credit card debt accounts settle in a range of 30 to 50%. Be aware that some credit card debt accounts may settle considerably higher reaching into the 75 to 80% range while in rare cases credit card debt accounts will settle in the 20 to 30% range. In very rare cases I have seen debt solutions agreed to for as little as 5 to 10% or as much as 90 to 95%.
What would determine differences in the debt settlement amounts?
The foremost factor in debt settlement is the debtor’s financial situation; the next most important factor would be the internal debt settlement policy of the creditor. It is difficult to predict the internal policies of these creditors but they are usually very consistent in their practice. For example – MBNA, American Express and Citicorp may be all major financial firms, but their respective policies on debt settlements are quite different. However, American Express customers generally receive the same treatment across the board. Only an attorney who works with these creditors everyday could know these nuances of their policies, and could use this knowledge when putting together a debt settlement plan.
Do credit card debt settlements need to be made all at once to achieve debt elimination?
With most settlements you will need to pay off the individual credit card debt all at once in a lump sum. However, in some cases the creditors will arrange a short payment plan, especially with larger amounts of credit card debt. These plans might range anywhere from three to six months.
How does this type of credit card debt workout affect someone’s credit?
It depends on the status of the debtor’s credit before the debt workout. As an example, let’s imagine that credit report scores run on a scale of one to ten, one being the best. Only ranks of one and two are good enough to walk into most local banks to get a loan or credit card. After a debt settlement, a person would be considered near a six on this scale.
For someone who started as a one or two this would be a dramatic decrease in their credit score. Anyone with good credit should consider the debt workout as an option very seriously before undertaking it. However, an individual may already have a score of 9 to 10 if they have multiple accounts that creditors wrote off. For these people, settling their accounts through debt settlement would actually improve their credit. This does not mean it will make their credit good – rather, it just means their credit will go from very bad to only plain bad.
One of the free services we offer our clients is our 720 Credit Rebuild Program. We believe in complete financial rehabilitation, including a recovered credit score. Utilizing our 720 Program will guide you through the mechanics of returning to a 720 + credit rating within as little as 12 to 24 months after we’ve filed bankruptcy for you or competed a debt negotiation plan.
Can a person achieve these credit card debt settlements on their own or do they need to hire a debt settlement professional to get out of credit card debt?
While it is certainly possible for someone to negotiate or settle their own debts, I do not recommend it. In the first place, creditors take the situation much more seriously when a Hawaii bankruptcy lawyer contacts them. An individual would not know how to negotiate a debt settlement or what a proper debt settlement would be. A settlement professional working in this field would know how to deal with most individual creditors. it’s important to understand the nuances of filling out financial forms. Most individuals do not know how to do this properly.
A debt negotiation lawyer also knows what to say, what not to say, what to ask for and who to talk to. Credit card settlements are best done according to the creditor’s standard operating procedures and formats. In my experiences, most people have no idea how to go about following such debt solution procedures. It is disturbingly common for debt collectors to try and do things, which may be industry tricks or potentially commit fraud in order to get you to pay off debt in full. Some of these things may include getting you to reveal information about yourself you may have no obligation to reveal. In other cases having you send money for a “full settlement” only to find they have lied and simply taken the money on account.
Have More Questions About Debt Settlement? Call Us Today
We offer all our prospective clients different options to consider, including but not limited to bankruptcy. Call 808-528-4274 or fill out our online questionnaire to begin the path to financial freedom.