Non-Bankruptcy Debt Reduction Plans Honolulu, Hawaii
“90% of all divorces can be traced to
quarrels and accusations over money.”
- American Bar Association
Completing the program and paying off our credit card balances at the amounts negotiated by your office brought us much needed peace of mind and another chance to manage our financial life. Once again, we extend our gratitude. We are definitely believers of your office's Debt Negotiation Program.
-ex-clients, Aiea, HI
I’d like to thank you and your staff for your expertise in helping me end my debt nightmare. You made a big difference in my quality of life. I’d highly recommend your firm! Thanks again!
-Colleen Jung, Pearl City
Average Credit Card Debt Per Household: $14,500
-$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 lawyer
Our goal here is to help you avoid bankruptcy, and still become debt-free!
We are not the same as Consumer Credit Counseling, whereby you pay all your creditors back in full with an adjusted interest rate over 5 to 7 years. We perform true Debt Reduction 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, only to find that there are no closer to being debt-free than when they started. Their credit records reflect all of their accounts seriously delinquent, and not all of the creditors agree to the debt management, plan, so some of them file lawsuits to collect. The consumer credit counseling programs generally increase several times the amount of money that the client has to pay each month until there is virtually no benefit to be gained on a monthly basis from being in the program. :: back to top
BENEFITS of a DEBT REDUCTION PLAN:
Relief From Stress and Strain of Debt
This Debt Reduction or Debt Negotiation Program (as we call it) is designed to reduce 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 credit cards, signature loans, hospital bills, etc. In many cases, if you qualify for the program, you can obtain significant reductions in interest and principal. Bankruptcy is not filed, and you’ve still eliminated a vast portion of your debts in 24 months or less.
CLICK HERE TO SEE EXAMPLES OF ACTUAL SETTLEMENTS THAT WE ACCOMPLISHED FOR OUR CLIENTS::Actual Settlement Letters
Your Creditors are Contacted and Required to Deal Only with Your Representative That’s right. While you're working to pay your debts back through a Debt Reduction Plan, collection agencies and their lawyers are forced to deal with is instead of you.
One Consolidated Payment After a financial analysis of your situation, one monthly payment will be devised and put in a bank account 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 Reduction Plan attempts to reduce the principle owed, producing a good chance that you will be able to pay off your debts in a much shorter period than possible under a traditional consumer credit counseling program. This could provide you with considerable financial savings and a quicker arrival to your destiny: peace of mind.
Just Remember
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 (conversative in today’s market) the repayment would last 32 years. That’s correct, and that’s without the credit card companies’ penalties and extra interest charges they assess 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 to set up a confidential analysis of your situation with a seasoned Hawaii Attorney to determine whether this powerful debt management tool could produce real financial and emotional benefits for you. :: back to top
COMMONLY ASKED QUESTIONS ABOUT OUR DEBT REDUCTION PLAN:
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 counsel represents him or her unless the debtor gives the collection agency specific permission to do so.
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 he or she knows that the employer bans receipt of collection calls while on the job.
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 for reduction or elimination of credit card debt and other unsecured debt?
For the context of this discussion I refer to a credit card debt workout as a negotiated settlement of credit card debt. For example if you owed $5,000 on a credit card and made an agreement with the credit card company to pay $2,000 instead of $5,000 as settlement in full on the debt, this would be a credit card debt workout. Firms who perform this type of work may identify themselves as debt management, debt reduction, debt relief, debt workout, debt settlement or a host of other names inferring they help with debt even sometimes including 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 of the debts in full.
Who is eligible for a debt workout to get out of credit card debt?
Creditors agree to debt reduction 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?
Imagine that after only seeing a credit report and some preliminary information the creditors make what you might consider 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 indicating income and assets. Then, with evidence in hand proving the person’s lack of ability to repay the debt, to the creditor may consider a debt reduction allowing a pay off of the debt in a much lower range.
Would a typical credit card debt account accept to pay off the debt?
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 can be settled 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 reduction amounts?
While a person’s own financial situation would have an important effect on debt reduction figures the next most important factor would be the internal debt settlement policy of the creditor. Prediction about the internal policies of these creditors cannot be made on their size or the amount of the debt necessarily, but they are consistent in their own policies. For example MBNA, American Express and Citicorp may all be major players in the industry and all of a large size but their policy on debt settlements are quite different. On the other hand the way American Express treats each of their own customers individually is fairly consistent in terms of their own internal debt settlement policies. Therefore someone who works with these creditors everyday would know what to expect from each individual company when putting together a debt management plan.
Do credit card debt settlements need to be made all at once to achieve debt elimination?
With most settlements you do need pay off the each individual credit card debt all at once in a lump sum by paying the creditor the reduced debt settlement figure they have agreed to with your debt negotiation firm. There are two significant exceptions that debtors should be aware of. First is that in some cases the creditors will arrange a short payment plan, especially with larger amounts of credit card debt. These plans might range any where from three to six months to pay off the credit card debt.
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. Let’s imagine that credit report scores run on a scale of one to 10, 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. Someone who has done a credit card debt settlement would be considered would be near a six on this scale immediately after the pay off of the credit card debt settlement.
For someone who started as a one or two this would be a dramatic devastation of their credit. Anyone with good credit should consider the debt workout as an option very seriously before undertaking it, as his or her credit will be essentially destroyed. On the other hand, if an individual already shows multiple accounts on their credit report that have been charged off by creditors they may already have a credit score of approximately nine on a scale of one to ten. For these people settling the charge off accounts through debt settlement would actually improve their credit. This does not mean it will make their credit good, it just means it will improve it from very bad to only plain bad.
Can a person achieve these credit card debt settlements on their own or do they need to hire a debt reduction professional to get out of the credit card debt?
While it is certainly possible for someone to achieve a credit card debt settlement on their own I do not recommend it anymore than I would recommend somebody taking out their own appendix. In the first place creditors do not take the situation nearly as seriously when a debtor calls to make a settlement as when a debt relief professional, such as a bankruptcy attorney. An individual would not know how to negotiate a debt settlement or what a proper debt settlement would be. A debt management professional working in this field would know most individual creditors including what their standard acceptance offer would be.
In order to achieve the proper credit card debt settlement it is important to understand the proper way to fill out certain financial forms, most individuals do not know how to do this properly. A debt reduction professional also knows what to say, what not to say, what to ask for and what, to a creditor, would be a ridiculous request. Credit card debt settlements are best achieved when the creditor’s standard operating procedures and formats are followed. An individual would have no idea how to go about following such debt solution procedures.
It is harder to negotiate one of your own credit card debt accounts because of the emotions involved when negotiating for yourself. Even amongst lawyers it is said that the lawyer that represents himself has a fool for a client. This is the case for either a lawyer or non-lawyer negotiating debt settlements on their own behalf. When someone else is negotiating for you the calls from the collector and letters end up going to the debt management professional you have hired to work for you making the entire debt settlement process less stressful.
It is disturbingly common for debt collectors to try and do things, which may be industry tricks or potentially 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 or having you to send money you have been told would be settlement of the debt in full only to find they have lied and simply taken the money on account.
What if the creditor initiates a credit card debt settlement offer directly to the debtor?
In most cases the first debt settlement letters coming from the creditors are initial attempts to make contact the debtor combined with a debt settlement offer that the creditor deems high, but certainly one the credit card company would be happy to accept. A typical case would be a creditor offering a settlement of 75 or 80 cents on a dollar. In almost all cases debt settlement can be achieved for less than the offer made in these initial contact letters from the credit card companies.
DISCLAIMER: This site and any information contained herein is intended for informational purposes only and should not be construed as legal advice. Seek competent legal counsel for advice on any legal matter.
