Debt Consolidation - Relief From Crushing Debt
Consolidate your debts & regain financial freedom
Debt consolidation is the process of combining several small debts (and monthly payments) into one larger debt (and payment). On the surface, this may sound like a bad idea. But if done properly, consolidating your debts can provide fast relief from the suffocation and anxiety of being under a crushing mountain of debt.
If properly planned, debt consolidation usually results in one monthly payment that is much lower than the combined amount of all of your previous smaller debt payments. It's quite common for debt consolidation to reduce total monthly debt service by 50% or more!
Credit cards are by far the most common cause of a crushing debt load. The interest on these accounts can be upwards of 21%. And to add insult to injury, the minimum amount due when each statement arrives allows for retiring just a very small amount of the principal balance. In other words, if you pay just the minimum amount due month after month, it will take years to pay off that account!
And if you continue using the card on a regular basis, the principal balance will actually grow over time instead of shrink. Multiply this by 5 to 7 credit cards (the national per-person average), and you begin to realize the importance of debt consolidation.
The process of consolidating your debts is very simple and straightforward. You simply contact a couple of lenders and tell them that you're interested in a debt consolidation loan.
First, they'll have you fill out a detailed loan application. Be prepared. Have with you a list of all of your debts, including account numbers and balances. You'll also need your tax returns from previous years (at least the last two) and your two most recent check stubs.
Next, they'll ask you some basic lifestyle questions. They'll want to get a handle on why you got into a financial bind in the first place. After all, they'll want a reasonable assurance that you won't do the same thing again.
The prospective lenders will verify your sources of income, review your credit history, and make you an offer for a debt consolidation loan according to their evaluation of all of this information. Each lender will offer you an interest rate and repayment term for a debt consolidation loan.
Evaluate each offer and choose the best one for your circumstances. In general, the lower the interest rate, monthly payment, and length of the loan term, the more attractive the loan.
Another consideration is the number of points (if any) that you'll be required to pay. Points are simply an up-front, one-time payment to the lender. Each point is 1% of the debt consolidation loan amount. Try to choose a loan with no points if at all possible.
Debt consolidation can help most people who are suffering from a crushing debt load. Consolidating your debts isn't something to rush into blindly though.
A poor debt consolidation plan can leave you in worse shape than you were in before you consolidated your debts! Here is a list of things to consider before applying for a debt consolidation loan:
How large a monthly payment can you comfortably handle after debt consolidation?
Have you fixed the problem(s) that caused you to get into financial trouble in the first place? For example, have you cut up your credit cards? Have you changed any bad habits, like making lots of impulse purchases?
If not, consolidating your debts will just lead to a large payment each month accompanied by several new debts to service. Debt consolidation is effective at relieving cash flow problems only if you have your spending habits under control.
Do you have a complete list of all of your current debts, along with the payoff amounts and account numbers? You'll need to make sure you consolidate all of your debts or your debt consolidation plan may well set you up for more problems, not fewer.
If you do your homework before you apply for a debt consolidation loan, you can avoid the common mistakes that many others make. You deserve the relief that you can expect if you consolidate your debts. Just don't fall into the common trap of ending up in even worse shape than you were in before you completed your debt consolidation.
You can find a host of useful information on debt consolidation on the web. Just do a Google search on debt consolidation or consolidate your debts.
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Why should you choose PlanWell?
We work within your budget to significantly reduce the amount of debt you owe and help you save years of payments
Our services provide an honorable, aggressive alternative to bankruptcy.
Our experienced staff will work side-by-side with you throughout the process
Our team of experts include professionals in the fields of law, accounting, financial planning, insurance, debt and budget management, and psychology
We work for you - not the creditors
We have helped thousands just like you escape the debt trap.
PlanWell has been helping consumers resolve their debt concerns since 1995. Its top executives have over 50 years of debt counseling, accounting, financial planning, and legal experience, combined. It has developed the most unique and effective menu of programs in the industry. Through its programs, our consumers have in total reduced the balance of their debt by over $10 million. Unlike most other companies in the industry, these programs are designed for the primary benefit of the consumer, not the creditor. Despite this emphasis, some of the largest creditors in the country now realize the importance of these programs and refer their clients to help them avoid bankruptcy.
The company's primary mission is to help the consumer avoid bankruptcy by dissolving debt in the fastest time possible within a manageable budget.
Products & Services
Gain Control Over Your Finances
Debt Melt Down
The Debt Melt Down Program is an aggressive method of helping consumers out of the debt trap and away from the bankruptcy path.
The client makes a single monthly payment each month into their own personal bank account. As funds accumulate in the client's account, the PlanWell processing team negotiates settlements with the client's creditors, often enabling clients to escape debt at a fraction of the total amount they owe. Once a settlement is reached by PlanWell, the client then pays the settlement to the creditor from their own account. On average, PlanWell's clients in the Debt Melt Down Program end up spending 60 cents for every dollar that is owed.
Debt Arbitration
A program designed to reduce the principal balance of debt through one time settlements and payments. This program can be utilized in conjunction with financing or separate. The purpose of the program is to help avoid bankruptcy through compromises with the creditors.
Money Power Path Program
This program is designed to help the client achieve specific goals through a customized strategy based upon their specific set of circumstances. The purpose of the program is to focus the client on specific financial techniques and plans that will be established through one on one coaching with a professional Money Power Path Coach.
Q&A Regarding Debt Meltdown Program
Q. What is the Debt Melt Down Program?
A. The Debt Melt Down Program is an aggressive method of helping consumers out of the debt trap and away from the bankruptcy path.
The client makes a single monthly payment each month into their own personal bank account. As funds accumulate in the client's account, the PlanWell processing team negotiates settlements with the client's creditors, often enabling clients to escape debt at a fraction of the total amount they owe. Once a settlement is reached by PlanWell, the client then pays the settlement to the creditor from their own account. On average, PlanWell's clients in the Debt Melt Down Program end up spending 60 cents for every dollar that is owed.
Q. What type of debt can be handled through the program?
A. The program can accommodate almost any kind of unsecured debt. Unsecured debt is debt not collateralized by property. Debt such as car loans, mortgages, IRS tax liens, government backed student loans, etc. are examples of secured debts that cannot be included in the program.
Q. Who qualifies for the program?
A. Our Financial Counselors do a detailed financial analysis to determine if an individual would benefit from the program. Our main focus is to make sure that the program is a realistic solution to the individual's particular situation.
Q. How does it affect credit?
A. While on the program, the client's credit will in all likelihood suffer damage that occurs when accounts are not being paid. Of course, if the client is presently late or delinquent the difference may be minimal. However, once the client is debt free the accounts will indicate a paid or settled status. Within six to twelve months, our average client will be on their way to total recovery.
Q. How does this program compare to consumer credit counseling?
A. Credit counseling has no effect on debt principal at all. The purpose is to pay the debt in full at a reduced interest rate. The big problem with consumer credit counseling is that the monthly payments are often still too high and it will often take five or six years to pay the debt off. Also, keep in mind that these firms were established and now often funded by the creditors themselves.
Q. How does this program compare to bankruptcy?
A. Bankruptcy is an extreme option designed to be the last straw. It has a serious lingering affect on credit and can often have negative ramifications in many aspects of everyday life.
Q. What happens to open accounts when they are put into the program?
A. Any account that is put into the program is automatically closed for future use. The idea is to stop the cycle of debt spending and eventually eliminate the debt altogether.
Q. Does debt have to be "bad" to be put on the program?
A. The program works for debt in all stages.
Q. How fast will someone get out of debt?
A. Depending on the monthly payment paid by the client, the debt can be eliminated in as little as a few weeks, or if the client misses payments full debt elimination can take over three years. The client is in control of what they can manage and afford.
Q. How much can the program save someone?
A. In some cases as much as 80% of the principle balance can be eliminated, but on average PlanWell's clients end up spending approximately 60 cents for every dollar that is owed.
Q. How does PlanWell get paid?
A. PlanWell earns 40% of the amount that is saved by the client through settlement negotiations. For example, if PlanWell takes $10,000.00 of debt and settles it for $4,000.00, it earns a fee of $2,400.00 The net savings to the client would be $3,600.00. In other words, the client eliminates $10,000.00 of debt by spending only $6,400.00!
Q. What other help do you offer clients to help them permanently escape debt?
A. Included in the Debt Melt Down Program is PlanWell's Debt Free Life Membership and Coaching Program. The cost of this service is $50.00 per month, which is deducted from the client's account each month. The goal of this service is to educate and support clients through this difficult period and ensure successful completion of the Debt Melt Down Program.
The service includes scheduled one-on-one financial coaching sessions with a professional Financial Coach, educational materials, a regular newsletter containing valuable information about combating debt problems, and building future wealth, a Health Aid Discount Plan which entitles the client to discounts on various health needs such as pharmaceuticals, dental needs, and vision correction. In addition, the client is included in periodic interactive conference calls conducted by experts and masters in their fields when available. The Debt Free Life Membership and Coaching Program is designed to help the client achieve the goal of a debt free life.
Q. What else can an individual do if this program does not work for them?
A. We realize that dealing with debt in an extremely aggressive manner, such as is the case with the Debt Melt Down Program, may not be for everyone. For that reason, we have designed the Money Power Path Program as an alternate method of dealing with debt and other financial anguishes. This program will address your present predicament and a plan will be designed to help you reach your financial goals and desires. We go the step beyond helping you deal with present financial challenges, we help you envision the future and a life beyond these more difficult financial times.
Your Legal Rights
If you use credit cards, owe money on a personal loan, or are paying on a home mortgage, you are a "debtor." If you fall behind in repaying your creditors, or an error is made on your accounts, you may be contacted by a "debt collector."
You should know that in either situation, the Fair Debt Collection Practices Act requires that debt collectors treat you fairly by prohibiting certain methods of debt collection. Of course, the law does not forgive any legitimate debt you owe.
This page answers commonly asked questions about your rights under the Fair Debt Collection Practices Act.
What debts are covered?
Personal, family, and household debts are covered under the Act. This includes money owed for the purchase of an automobile, for medical care or for charge accounts.
Who is a debt collector?
A debt collector is any person, other than the creditor, who regularly collects debts owed to others. Under a 1986 amendment to the Fair Debt Collection Practices Act, this includes attorneys who collect debts on a regular basis.
How may a debt collector contact you?
A collector may contact you in person, by mail, telephone, telegram or fax. However, a debt collector may not contact you at unreasonable times or places, such as before 8 a.m. or after 9 p.m., unless you agree. A debt collector also may not contact you at work if the collector knows that your employer disapproves.
Can you stop a debt collector from contacting you?
You can stop a debt collector from contacting you by writing a letter to the collection agency telling them to stop. Once the agency receives the letter, they may not contact you again except to say there will be no further contact. The agency may notify you if the debt collector or the creditor intends to take some specific action.
May a debt collector contact anyone else about your debt?
If you have an attorney, the debt collector may not contact anyone other than your attorney. If you do not have an attorney, a collector may contact other people, but only to find out where you live and work. Collectors usually are prohibited from contacting such permissible third parties more than once. In most cases, the collector may not tell anyone other than you and your attorney that you owe money.
What must the debt collector tell you about the debt?
Within five days after you are first contacted, the collector must send you a written notice telling you the amount of money you owe; the name of the creditor to whom you owe the money; and what action to take if you believe you do not owe the money.
May a debt collector continue to contact you if you do not believe you owe the money?
A collector may not contact you if, within 30 days after you are first contacted, you send the collection agency a letter stating you do not owe money. However, a collector can renew collection activities if you are sent proof of the debt, such as a copy of a bill for the amount owed.
What types of debt collection practices are prohibited?
Harassment. Debt collectors may not harass, oppress or abuse anyone. For example, debt collectors may not:
Use threats of violence or harm against the person, property or reputation;
Publish a list of consumers who refuse to pay their debts (except to a credit bureau);
Use obscene or profane language;
Repeatedly use the telephone to annoy someone;
Telephone someone without identifying themselves;
Advertise your debt.
False Statements. Debt collectors may not use any false statements when collecting a debt. For example, debt collectors may not:
Falsely imply that they are attorneys or government representatives;
Falsely imply that you have committed a crime;
Falsely represent that they operate or work for a credit bureau;
Misrepresent the amount of your debt;
Misrepresent the involvement of an attorney in collecting a debt;
Indicate that papers being sent to you are legal forms when they are not;
Indicate that papers being sent to you are not legal forms when they are.
Debt collectors also may not state that:
You will be arrested if you do not pay your debt;
They will seize, garnish, attach or sell your property or wages unless the collection agency or creditor intends to do so, and it is legal to do so;
Actions, such as a lawsuit, will be taken against you, which legally may not be taken, or which they do not intend to take.
Debt collectors may not:
Give false credit information about you to anyone;
Send you anything that looks like an official document from a court or government agency which it is not;
Use a false name.
Unfair practices. Debt collectors may not engage in unfair practices when they try to collect a debt. For example, debt collectors may not:
Collect any amount greater than your debt, unless allowed by law;
Deposit a post-dated check prematurely;
Make you accept collect calls or pay for telegrams;
Take or threaten to take your property unless this can be done legally;
Contact you by postcard.
What control do you have over payment of debts?
If you owe more than one debt, any payment you make must be applied to the debt you indicate. A debt collector may not apply a payment to any debt you believe you do not owe.
What can you do if you believe a debt collector violated the law?
You have the right to sue a collector in a state or federal court within one year from the date you believe the law was violated. If you win, you may recover money for the damages you suffered. Court costs and attorneys fees also can be recovered. A group of people also may sue a debt collector and recover money for damages up to $500,000, or one percent of the collector’s net worth, whichever is less.
Where can you report a debt collector for an alleged violation?
Report any problems you have with a debt collector to your state Attorney General’s office and the Federal Trade Commission. Many states have their own debt collection laws and your Attorney General’s office can help you determine your rights.
If you have questions about the Fair Debt Collection Practices Act, or your rights under the Act, write: Consumer Response Center, Federal Trade Commission, Washington D.C. 20580. Although the FTC generally cannot intervene in individual disputes, the information you provide may indicate a pattern of possible law violations requiring action by the Commission.
To obtain a free copy of Best Sellers – a list of all the FTC’s consumer and business publications – contact: Consumer Response Center, Federal Trade Commission, Washington, D.C. 20580; 202-326-2222. TDD: 202-326-2502. You may also access FTC publications at www.ftc.gov on the Internet.
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