 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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Whether due to financial hard times or poor budgeting, many consumers in Tennessee have fallen in credit card debt. Because of this fact, having quality debt consolidation and consumer credit counseling is increasingly important. Perhaps more important, however, is having the resources available so consumers can become better educated about their debt management options. PayingPaul.Com is here to help Tennessee learn not only about how debt relief works, but also how to tell whether a consolidation company is truly looking out for your best interests. There are two methods for debt reduction help: credit counseling and debt settlement. Both services offer the convenience of consolidating your credit cards and lower monthly payment, but differ significantly in how they approach this. The first, credit counseling, has been around for quite some time and is usually offered by non-profit debt counselors. Much of their focus is on providing financial education to people struggling with debt, so they can learn to better manage their money. If your situation permints, they may suggest enrolling in a debt management plan. If you choose to do so, the credit counselors will work on your behalf to get your creditors to agree to more favorable payment terms, such as reduced interest rates, waived late fee charges, and a lower monthly payment. These services are not for everyone, however. Although non-profits provide these plans, they do charge fees and there are affordability issues for many consumers, as well as potential credit implications that are unfavorable. The other popular way to pay debt off without a personal loan is credit card settlement. This approach varies greatly from credit counseling because it involves negotiating to lower your debt instead of finance charges. In cases where a consumer is experiencing a financial hardship, this may be the best way to get out of debt. If not, however, one should probably avoid this option due to its risky and difficult nature. In a settlement program, one falls delinquent on their payments and saves money into a savings account each month. Once sufficient funds have accumulated, the settlement company will contact your creditors and offer a lump sum of money, usually between 40 and 60 percent of what is owed, to completely satisfy the debt. During the course of the program, however, your creditors will call and report the debt as past due to the credit bureaus. In some cases, they may pursue legal action to collect the balance. Are you interested in getting a free consultation from credit card debt consolidation advisors? Submit a form today! Tennessee Debt Management Laws Tennessee has laws in place that effectively regulate the debt management industry in the state. The law refers to debt management as “debt adjusting, which Tennessee Code defines as “holding oneself out, by words of similar import, as providing services to debtors in the management of their debts to do any of the following: (i) Effect the adjustment, compromise, or discharge of any account, note or other indebtedness of the debtor; (ii) Receive from the debtor and disburse to the debtor's creditors any money or other thing of value; or (iii) Solicit business and advertise as a debt adjuster.” Under the law, engaging in the business of “debt adjusting” is illegal if the company does any of the following, among others: (a) failing to disburse funds to creditors within 30 days after receipt of funds from the client. (b) accepting more than $75 as an initial set up fee (c) accepting consultation fees in excess of $50 per calendar year (d) accepting the greater of 8.5% of the amount paid by the debtor monthly or $30 as a monthly maintenance fee (e) failing to include the following disclosure in the contract for the debtor to sign and date: “With respect to my credit history, I understand that my participation in the DMP may affect my credit report either favorably or unfavorably according to my creditor's policies with respect to the DMP and my payment history prior to and during my participating in the DMP. I also understand that, for any joint accounts, my spouse's credit rating may affect my credit rating either favorably or unfavorably;” Note: the law does exempt attorneys licensed in Tennessee from having to abide by these regulations. For more information about consumer credit counseling services and debt consolidation, feel free to follow this link: Warning PDF http://tennessee.gov/sos/acts/104/pub/pc0199.pdf Other Resources Filing Bankruptcy in Tennessee Bankruptcy Laws in Tennessee Debt Collection in Tennessee |
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