 With the struggling economy, many people are finding themselves deep in credit card debt. Therefore, consumers are forced to turn to debt consolidation in order to get control of their finances. However, before a person decides to consolidate their credit card debt, they need to be aware of the credit... |
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Living with debt is by no means easy. There’s the constant concern of living paycheck to paycheck and the never ending issue of covering monthly bills and living expenses. While most of us pride ourselves on being self-sufficient, it’s hard to ignore that we all sometimes live well beyond our means.... |
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Although far from the home of many consumer credit counseling agencies and debt consolidation groups, Hawaii is still a state that finds many of its residents in need of these services. Although Hawaiians may know that debt management options exist, not many know that there is actually a difference between the debt solutions being presented. One choice is debt settlement, also known as debt negotiation. This is an innovative but risky approach to managing your debts. In a settlement program, a client falls falls behind on their credit card payments in order to cause a creditor to accept a lump sum of money equal to 40-60% of the balance in full satisfaction for their debt. The savings can be significant, but there are a few things one must consider before enrolling in this type of program. During the course of the program, the client stops paying their creditors and saves money each month into a savings account. Due to the fact that you are past due, your credit score will be impacted negatively. On top of that, your creditors will continue trying to collect the debt during the course of the program, which means you’ll experience phone calls and in some cases, lawsuits. Another approach is credit counseling. Credit counselors can help you review your budget, and if your situation permits, they may consider enrolling you in a debt management plan. These plans are usually offered by non-profit agencies involve submitting proposals to creditors to help consumers get interest rate reductions and get out of debt faster. Although offered by non-profits, these programs are not for everyone also. Even the non-profits charge fees, so the services may not be affordable or legitimate. Moreover, although better for your credit than settlement, credit counseling can have implications for your credit report as well. Ask your debt counselor to learn more about this possibility. Do you want to learn more about how to reduce your debt fast and easy? Submit a form to PayingPaul.Com and get matched with a service! Debt Management Laws in Hawaii In 2007, the Uniform Debt Management Services Act (UDMSA) was introduced into Hawaii legislature. Although this has not become a law formally, the UDMSA has found success in many of the states in which it has been introduced. Until this is approved, Hawaii law states that “debt adjusters” (an old fashioned term for debt negotiator, consolidator, or credit counselor), which is “a person who for a profit engages in the business of acting as an intermediary between a debtor and the debtor's creditors for the purpose of settling, compromising, or in any way altering the terms of payment of any debts of the debtor”, are strictly prohibited from operating Hawaii unless they are a non-profit (even if they do charge fees). Exemptions The following entities are exempt and can in fact engage in “debt adjusting”: -attorneys licensed in the state of Hawaii -A person who is a regular full time employee of the debtor -A person acting pursuant to a court order -The law also makes a specific point to mention that banks, credit unions and such do not qualify as “debt adjusters” although they may offer debt consolidation loans, which willin essence “alter the payment terms of a debt” Note: this may change soon with the introduction of the UDMSA. For more information, please speak with an attorney and/or follow this link: Hawaii Debt Statutes Other Resources Filing Bankruptcy in Hawaii Bankruptcy Laws in Hawaii Debt Collection in Hawaii |
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