If you want to achieve debt reduction, there are several options available to you:

Reducing balances through debt consolidation

There are some people who want to do things their way. Instead of hiring the services of debt relief companies or availing of their debt management plans, they end up looking for debt consolidation options that are open for them. Debt consolidation is the process of transferring your debts from one account to another through different bank accounts being offered by companies. It can be achieved through balance transfers or acquisition of new loans.

In getting a loan, you can apply for this from different financial and banking institutions. You must complete the necessary requirements demanded from you so that they can process your application. If you want to have a hassle free transaction, it is important that you have a positive credit report. This will help the companies evaluate your application.

On the other hand, bank transfers is all about moving your credits and outstanding balances into one account that has a low interest charge fees compared to what your creditors demand from you. this will help you save money because of the lessened and adjusted fees rates.

Understanding debt resolution and negotiation

There are also some debtors who are not really capable to pay back their creditors. If you are one of them, you may want to try consulting your creditors and see if they can offer you with any debt settlement programs. In this particular strategy, you must pay them back within a certain period so that they can offer you an adjusted rate of the fees that you have to pay. However, the problem with this is that it can significantly damage your credit report since most bureaus see this as account foreclosure.

Credit card debt reduction however is made possible if you are going to talk to your creditors. They will appreciate it if you are going to tell them the reason why you cannot pay them back so that they can suggest ways that you can do.

Most Debt Settlement (also known as Debt Reduction) companies follow a similar process in qualifying and enrolling their clients into the program. I will break this down into 5 steps:

1. Initial Contact: Many customers will find a list of “Debt Help” companies by typing phrases into search engines such as Credit Card Debt, Get out of Debt, or Debt Relief. The initial contact will be initiated by filling out a form or calling the company directly. This first call will give you the most clues on what kind of business you are dealing with. The most important thing to remember is that Debt Settlement does not work for everybody. If a Debt Consultant makes the program sound like everyone gets accepted, you do not want to go with that organization. The only way a company can successfully reduce your debt is if you are in a financial hardship. Basically, if you don’t need the help, the program will not work because the creditors will have no reason to lower your debt amounts. If you’re current on the bills you still might qualify for debt reduction but only if you are struggling to make the minimum payments. If a Debt Consultant neglects to ask about your state of affairs and pushes you to send in your credit card statements, hang up and call a firm that cares about your specific predicament. An ethical Debt Consultant representing a reputable firm will discuss all the aspects of Debt Settlement, both positive and negative. Remember If it sounds too good to be true, it is. If the initial phone conversation is going well and you have a general understanding of how Debt Settlement works, then it is time to have the company review your credit card/loan statements or a credit report.

2. Submission of Credit Report or Statements: If a company approves you without reviewing your statements, this is a bad sign. Reputable Debt Reduction services will want to review your statements or a credit report to do a comparative analysis. Having the company review your information is part of the approval process and in no way should commit you to anything. This part of the process is crucial because the specific creditors that you are indebted to historically settle at different amounts. The amount by which a creditor will reduce your debt will vary depending on the debt settlement company, financial hardship, creditor collection practices, and credit card delinquency. The job of the Debt Reduction Company is to take everything into account and give you the most accurate quote possible. If you speak with a Debt Relief company and this step is missing, I would not recommend taking the process any further.

3. Underwriting: The underwriting (also known as approval, qualification) process is designed to ensure that only qualified applicants are being approved for the program. This is an extremely important step to a reputable Debt Settlement firm because it’s a system intended to help ensure that approved applicants make the transition to satisfied clients with the highest rate of success possible. If a company is letting everyone in the door, chances are many of these clients are getting settlements rejected by their creditors because they are not qualified to have a Debt Reduction.

4. Approval: If you are approved for a Debt Settlement program the consultant will be able to tell you how much your monthly payment is and for roughly how long it will take for you to be debt free. In the field of Debt Settlement the successful programs are usually not more that 3-4 years in length. Every creditor has a window of opportunity when they are willing to accept settlements and the vast majority will be approved within 3 and 42 months. If a company says that they can reduce your debt by fifty percent and offers you a 5 year program, be cautious. In Debt Settlement the creditors will be paid off one at a time and the possibility of legal action from the creditor increases as the debt becomes more delinquent.

5. Agreement: If the approval is within range and you would like to move forward the next step is to look at the agreement. The agreement should clearly state your monthly payment and fee schedule. Make sure to read the entire document and write down any extra questions that come up. You should be able to cancel the Debt Settlement mid-program if needed, without being responsible for future monthly payments. Of course nobody enters a Debt Settlement Program intending to cancel 10 months down the road but if something unexpected happens to your income, you need to be able to sever the relationship. If you read the agreement and it seems the opposite of what your Debt Consultant explained to you, it is not a wise idea to sign up with that company.

Now that you have found the best company for your needs focus on your new monthly payment. If you ever can afford to pay above your minimum monthly, I highly recommend doing so. Remember, the goal is to pay off this debt as fast as possible. Stay in communication with the customer service department and refer communication from your creditors to the Debt Relief Company. Before you know it the debt will be showing $0 balances and you will be on the road to financial freedom. If you ever get discouraged in the program and the anticipated 2-3 years to pay off the debt, just remember the alternative of making minimum monthly payments or the financial position you were in before the program started.

Article Source: http://www.articlesbase.com/debt-consolidation-articles/choosing-the-right-debt-settlement-company-388767.html

About the Author:
Adam Jasa is the Founder of Select Debt Relief www.selectdebtrelief.com . He has years of experience working in the finance and real estate fields, most recently with the Freedom Financial Network in their Financial Consulting Department. He is an expert in the different options available to consumers with unmanageable debt burdens. His company, Select Debt Relief is a member of Debt Resolution Partners which currently manages over $900 million of consumer debt.

Dateline paying is a simple method of paying oldest bills first, based on the due date. The dateline tells you how far back in time your past due bills go. And yes, credit card debt should be treated just like any other past due bill. There are a few simple steps to this strategy that anyone can do.

1 – Make a list of all your past due bills and credit card debt. Use a report from your accounting program or a spreadsheet of some kind so you can sort them by due date. Be sure and put in a bill for more than the minimum payment for each credit card or line of credit.

Make the credit card bill for the amount you want to try to pay over the few weeks before the payment is actually due. For example, if your minimum payment is running at $400, put a bill in for $600.

2 – At the end of each business week, carve off 15% of the income to use to pay past due bills and debt. Use the remaining 85% to pay current operating expenses to keep the doors open, the lights on and the telephone ringing to get in more income.

Be sure and use some of the 85% for promoting your products and services to keep customers buying, and set a bit aside as a cushion to handle emergencies.

3 – Use the 15% to pay the debt by dateline – oldest bills first. Always use a portion of it to pay suppliers and part to pay credit card debt.

4 – Pay a bit against credit card debt each week using on-line paying.

Why? Because you stop the daily interest compounding on the amount that you paid. This can save you a lot of money in unnecessary interest charges over time. It also keeps you from being late on your payments and avoiding the late payment charges. In addition, it eliminates the scrambling to come up with a big chunk of cash to pay the credit debt on the week the statement says the payment is due.

5 – Pay past due bills from suppliers – oldest bill first. The only exception is a supplier who refuses to ship more product that you need in order to produce more income, or one who is threatening legal action. Those are dangerous situations that must be handled immediately.

6 – Work out how to raise your income so that you have an increasing amount of money to use to work this debt relief strategy.

Systematically working at paying both ends of the dateline, 15% to past due bills and 85% to current operating expenses, gradually moves the dateline forward to present time until you are current on your bills and out of debt.

You can easily see this dateline paying strategy working for you if you make a graph of the total debt you owe and plot the figure each week so you can see the amount of debt coming down. Not only does it help you confront the debt you created, it validates the actions you are taking to get that situation handled.

Sandra Simmons, President of Money Management Solutions has years of experience helping business owners and individuals manage their money to achieve financial freedom. Claim your FREE REPORT “7 Fatal Money Management Mistakes Business Owners Make”