Do Nothing
This really isn’t an option. It’s suicide. We understand that when bills get out of hand and you can’t make the monthly payments, many people stop making payments altogether.
When you stop making payments you are subject to liens, judgments, and garnishments. Collectors will call you between the hours of 8:00 am to 8:00 pm everyday. Something has to be done. You will need to explore other options.
Bankruptcy
Bankruptcy is a way to potentially get out of your debits. Unfortunately, it leaves a long lasting scar, and comes at a high price - financially, emotionally, and socially. It is a long and painful process and the repercussions can last for over a decade.
The financial impact of a bankruptcy is severe; a bankruptcy will stay on your credit report for 7-10 years. Every time you apply for credit, whether it is a home, a car, a lease, or insurance, you may be impacted. The long-term effect of higher rates may greatly outweigh the shorter-term impact of filing bankruptcy.
Most people do not realize that bankruptcy can stay on their court records for over 20 years - which means it can follow someone for the rest of their life. If you apply for a job, a loan, rent an apartment, or even insurance your bankruptcy filing may be easily uncovered.
Lastly, we have yet to find someone who is proud of filing bankruptcy. Most people will do anything to avoid filing bankruptcy, and for many of our clients, the Lokman Debt Relief Program is the perfect alternative.
Bankruptcy is not an easy or even quick fix. It is a very serious decision with serious consequences. If you are considering bankruptcy, you should contact a lawyer to discuss this option.
The Lokman “Debt Relief Program" is a great alternative to bankruptcy. Our team of skilled negotiators has one goal; to make your creditors accept our settlement amounts as payments in full, making you debt free without having to suffer the longer-term financial, emotional, and social impacts of a bankruptcy.
Debt Consolidation
Debt Consolidation is a nice way of saying you’re borrowing more money to pay off money already borrowed and putting something of collateral on the line - this means your home!
People tend to do Debt Consolidation because they believe their APR’s will be lower, but unfortunately that isn’t always true, in fact, they can be as high as 24%. Although it may sound like an easy way out, the reality is you are still in debt, only now your house is in jeopardy – if you do not pay, you will lose your home.
Credit Counseling
Counselors will attempt to lower your interest rates and monthly payments; how successful they are depends on your situation.
You will make a monthly payment (which will include their monthly fee to be on the program) and they will disburse the agreed amounts to your creditors. The unfortunate thing is you will still have to pay the entire amount you owed, and if you miss a payment your creditors will drop you from the program and may not allow you to join another program for 1 year or more.
Debt Settlement
If you are past due, your monthly payment exceeds the feasible amount you can pay, or bankruptcy is beginning to appear tempting then Debt Settlement, might be the right option for you.
Debt Settlement is debt negotiation. Our highly trained professionals negotiate payment of your debts for LESS than what you presently owe. Your monthly payment will be brought down to a practical, reasonable amount you CAN afford. We can help show you how to settle your debts in a fraction of the time you would have had you tried any of the other options.
Choosing a Debt Settlement Company
When you are choosing a debt settlement company, there are many things you need to be mindful of. Many companies offering debt settlement services are small, unsophisticated and have only been around for a short period of time. The good ones will have a track record of success and will be able to provide you with an honest assessment of not only the potential benefits, but also the potential downsides of debt settlement for your situation. The fact is that debt settlement is not right for everyone. It is a program designed for consumers with serious debt problems who are unable to maintain payment obligations and are considering bankruptcy or credit counseling.
The Federal Trade Commission (FTC) advises to stay away any company that makes untrue claims:
- Promises that unsecured debts can be paid off for pennies on the dollar. The truth is that there is no guarantee that any creditor will accept partial payment of a legitimate debt. Your best bet always is to contact your creditor directly and as soon as you are having problems making payments.
- Requires substantial monthly service fees and demands payment of a percentage of what they’ve supposedly saved you. The truth is that most debt relief companies charge hefty fees for their services, including a fee to establish the account with the debt negotiator, a monthly service fee, and a final fee – a percentage of the money you’ve supposedly saved.
- Tells you to stop making payments to or communicating with your creditors. The truth is that if you stop making payments on a credit card, expect late fees and interest to be added to the amount you owe each month. If you exceed your credit limit, expect additional fees and charges to be added. Your credit score also will be hurt by not making payments.
- Claims that creditors never sue people for not paying their unsecured debts. The truth is that creditors may have the right to sue you to recover the money you owe. And sometimes, when creditors win a lawsuit, they have the right to garnish your wages or put a lien on your home.
- Claims that they can remove accurate negative information from your credit report. The truth is that no company or person can remove negative information from your credit report that is accurate and timely. It's illegal.