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The Debt Snowball

A step-by-step guide to using the debt snowball to get out of and stay out of debt. Our guide also covers which debt to pay off first and the debt avalanche.

Welcome to our series on crushing your credit card debt. In this third of five articles, we look at how to supercharge your get out of debt program with the Debt Snowball.

We’ll cut right to the chase: using the debt snowball method can save you thousands of dollars in interest payments. On top of that, it can also significantly reduce the time it takes you to get out of credit card debt.

The debt snowball is a method for paying down any debt–not just credit cards–and it’s extremely easy to use. Let’s take a look at how it works.

What is the Debt Snowball?

The concept behind the debt snowball is really simple. You’ll focus on one debt at a time until it’s paid off. Once you close out that first balance, you’ll “snowball” the amount you werepaying into the payment for the next debt in line.

There are a few steps to follow to get the ball rolling, though (pun intended).

Step 1. Figure Out Your Total Debt

Before you can determine where your debt snowball should focus–and what you can expect from the process–you need to know where you stand.

First, make a list of all of your credit card debts. You can include other debts as well, such as school loans, auto loans, and home equity loans. The goal is to get all your balances in one place, where you can see your total debt. If you don’t have a comprehensive list of all your debts, check your credit report. It should include any debts with an outstanding balance.

Step 2: Figure Out the Specifics

For each debt, you’ll then want to figure out the specifics of the account. You should list the creditor, the outstanding balance to date, the monthly minimum payment, and the current interest rate. If you’re paying an introductory rate on the debt that will change after a certain time period, write that down, too.

Step 3: Figure Out What You HAVE to Pay

Even though you’ll focus on one account at a time with the debt snowball, you can’t simply neglect the others. Each debt will have its own unique minimum monthly payment. This amount is due each and every month in order to keep the account in good standing.

You’ll want to add up the minimum monthly payments due across all of your accounts. You will continue to pay at least this amount until all of your debts are paid in full. That means that when the first debt is paid in full, you’ll take the money you were paying toward that debt and focus it toward the next debt. For all other accounts, continue paying the minimum monthly due.

Step 4: Order Your Debts

The classic debt snowball order is to pay off your lowest-balance debt first. Start with the lowest balance and work your way up. This is a psychologically effective method because it gives you a few quick wins up front. In fact, some research shows that this option gets people to stick with their debt repayment plan for longer.

The other method of ordering your debts is known as the debt avalanche. This has you start with your highest-interest debt first. This plan saves you more money over time, since you knock out the debts with the heftiest interest first. But this may mean it takes longer to pay off the first debt on your list.

Either method can work well as long as you stick to it. But the key is to tackle your debts with a plan, and to always know which debt you’re planning to pay off next.

Step 5: Put Extra Money into the Snowball

If you have any extra money to put towards paying off your debts, add that to the minimum payment on the first debt each month. Once that debt is paid off, put both your extra money and the original debt’s previous minimum payment towards the next debt. This way your payments snowball, building momentum as you pay off each debt.

Why Does it Work?

Two things make the debt snowball a powerful tool. First, the minimum payment on a credit card goes down as the balance goes down. Most credit cards calculate the minimum payment as a percentage of the outstanding balance. While the actual percentage applied by credit cards varies, a range of two to four percent is common.

That means that after just one payment, your minimum payment will go down the next month (assuming you haven’t added any charges to the card). By keeping your payments constant, however, more and more of each month’s payment will go toward your balance instead of interest.

Second, as one loan is paid in full, you put the extra money toward anotherbalance. This further accelerates the paying of your total debt, without actually requiring any additional funds from your end.

When the next account is paid in full, you will take the extra cash each month and put it toward your third card. Keep following this approach until all of your debt is gone.

How Much Does the Debt Snowball Really Save?

To see the power of this approach, let’s look at an example. We’ll assume that you have the following three credit cards with balances:

We’ve also assumed that the minimum payment is calculated by taking 2% of the outstanding balance. With these assumptions, the current minimum payment for all three cards combined is $340.

Minimum Payment Approach

Now, if you continue to make just the minimum payment each month, that amount will slowly go down as your balances go down. With that approach, how much will you pay in total interest and how long will it take to pay off the balances in full? I hope you’re sitting down for this:

  • Total Interest Payments: $49,007.43
  • Years to Debt Freedom: 60 years and 11 months

Don’t believe the math? Try it for yourself with this calculator from CNN.

Debt Avalanche Approach

Let’s look at the alternative, instead.

In this scenario, you continue to make the initial minimum payment of $340 until all debts are paid. Then, you apply the extra cash to the card with the highest interest rate, and the results change dramatically:

  • Total Interest Payments: $12,365.57
  • Years to Debt Freedom: 7 years and 3 months

The numbers speak for themselves.

Debt Snowball on Steroids

So far in our examples, we’ve calculated the current minimum payment and assumed you’ll continue to pay this amount until the debt is gone. Using the same example above, let’s now assume that you can throw an extra $50 a month at the debt. So instead of paying $340, you’ll pay $390 until you’ve killed your debt entirely.

How will this affect total interest paid and time to debt freedom? Here are the numbers:

  • Total Interest Payments: $8,979.83
  • Years to Debt Freedom: 5 years and 7 months

In other words, an extra $50 a month will shave nearly two years off your time to debt freedom and more than $3,000 in interest payments. Here’s a screenshot from the calculator I used to get these results:

Debt Snowball

Which Debt Should You Pay First?

You may have noticed in the above examples we’ve been applying extra cash to the credit card with the highest interest rate. Not everybody, however, recommends this approach.

Dave Ramsey is well-known for his advice to pay the loan with the lowest balance first. He recommends this approach even if you have other loans with much higher interest rates.

The rationale? By picking the debt with the lowest balance, you’ll get it paid off faster and provide yourself with additional motivation to continue. The road to becoming debt-free can be long and, well, quite boring. But paying off small loans quicker, it may encourage you to keep on keepin’ on.

I don’t want to get into whether Dave Ramsey is right or wrong. But it is important to realize that following Dave’s approach may cost you thousands of dollars in extra interest payments and take you longer to get out of debt.

Using our example from above, let’s assume that you continue to pay $340 a month until you’ve extinguished your debt. In this example, however, any extra cash goes to the card with the lowest balance. With Dave’s approach, here are the results:

  • Total Interest Payments: $13,934.00
  • Years to Debt Freedom: 7 years and 7 months

Now the difference may not seem like much. Compared to paying the cards with the highest interest rate first, Dave’s approach takes just 3 months longer. But his approach costs about $1,500 more in interest payments.

However, if this plan helps you stick to paying off debt, it can be the best one.

In some cases, the best approach is a combination. Maybe you start by paying off a couple of low-hanging-fruit debts with very low balance, regardless of their interest rates. Then you transfer some of your credit card balances to 0% APR cards. You pay those minimums while you pay off debts carrying a much higher interest rate.

Debt Snowball Gotchas

As easy as this debt repayment method is, there are several ways to go wrong:

  1. Watch out for more debt. The most important part of getting out of debt is to stop going into more debt. We’ve talked about this previously but it truly can’t be stated enough. While sometimes debt is outside of your immediate control, oftentimes debt is the result of bad choices. Do everything in your power to avoid new debt.
  2. An emergency fund is a must. Having some money set aside for the unexpected bills will help you avoid more debt.
  3. Work on your credit. With an improved credit score, you can often get interest rates on your debt lowered. In the case of a credit card, it can often be as simple as a phone call to your issuer. With auto loans and home equity lines, it will likely require a refinance; however, the savings can be substantial and often worth the effort.

In the next article in our crushing credit card debt series, we’ll look at Ways to Free Up Extra Cash that you can then put toward your debt.

Read the full article here: https://www.doughroller.net/debt/how-debt-snowball-can-reduce-and-eliminate-debt/

Dave Ramsey – The Snowball Effect

Do you remember building snowballs in the backyard as a kid?

You probably learned that the fastest way to build a snowball was to pack some snow into a tight ball and then start rolling it through the yard. As it gained momentum, the snowball grew into something more like a snow boulder.

It’s a good technique for building snowballs, and it’s an even better method for paying off your non-mortgage debt.

We call it the debt snowball. It starts when you’re on Baby Step 2—meaning you’re current on all your bills and have a $1,000 starter emergency fund saved up—and it’s probably the most life-changing thing you’ll experience in your total money makeover. It’s a big deal!

How Does the Debt Snowball Method Work?

The debt snowball method is a debt reduction strategy where you pay off debts in order of smallest to largest, gaining momentum as each balance is paid off. When the smallest debt is paid in full, you roll the money you were paying on that debt into the next smallest balance.

It looks something like this:

Step 1: List your debts from smallest to largest.
Step 2: Make minimum payments on all your debts except the smallest.
Step 3: Pay as much as possible on your smallest debt.
Step 4: Repeat until each debt is paid in full.

An Example of the Debt Snowball

Say you have the following four debts:
1. $500 medical bill ($50 payment)
2. $2,500 credit card debt ($63 payment)
3. $7,000 car loan ($135 payment)
4. $10,000 student loan ($96 payment)

Using the debt snowball method, you would make the minimum payments on everything except the medical bill. For this example, let’s say you have an extra $500 each month from taking a side job and cutting your expenses down to the bare minimum. You are gazelle intense.

Since you’re paying $550 a month on the medical bill (the $50 payment plus the extra $500), that debt will be done in one month. You would then take that $550 and attack the credit card debt. You can pay $613 on the plastic (the freed-up $550 plus the $63 minimum payment). In about four months, you’ll wave goodbye to the credit card. You’ve paid it off!

Now punch that car loan in the face to the tune of $748 a month. In 10 months, it’ll drive off into the sunset. Now you’re on fire!

By the time you reach the student loan—which is your biggest debt—you can put $844 a month toward it. That means it will only last about 12 months. After that, Sallie Mae better get used to living somewhere else, because you’ve kicked her out!

Thanks to your hard work and sacrifice, you have paid off $20,000 of debt in only 27 months using the debt snowball method! Congratulations!

Why Does the Debt Snowball Method Work?

The debt snowball works because it’s all about behavior modification, not math. When it all boils down, hope has more to do with this equation than math ever will.

If you start paying on the student loan first because it’s the largest debt, you won’t see it leave for a while. You’ll see numbers going down on the balance, but pretty soon you’ll lose steam and stop paying extra. Why? Because it’s taking forever to get a win! And you’ll still have all your other small, annoying debts hanging around too.

But when you ditch the small debt first, you see progress—quickly! You have hope! That smallest debt is out of your life forever. The second debt will follow soon, and then the next. When you see the plan working, you’re more likely to feel like you can stick it out. And when you keep at it, you’ll succeed in becoming debt-free!

By the time you’re paying on the bigger debts, you have so much more cash freed up from paying off the earlier ones that it creates a debt snowball. Suddenly, you’re putting hundreds of dollars a month toward your debts instead of just a few bucks here and there! You build momentum, and that changes your behavior and helps you get out of debt for good.

It’s like Dave says: “The problem with your money is not your math, it’s the person in the mirror.” If you can get that person to change their habits, then there’s no stopping you!

Sometimes you just need to see your progress to know how far you’ve really come in your journey. That’s why we created our Debt Snowball Tracker for you! Download it today and get started imagining a life without payments. 

Are you ready to dig in and get to work on your debt snowball? Learn how to pay off debt, make wise spending decisions, save for the future and more with Dave Ramsey’s course Financial Peace University.

Here is the link to the full article: https://www.daveramsey.com/blog/how-the-debt-snowball-method-works

How to Avoid Bankruptcy and Spare Your Credit

Debt is a way of life for many consumers. It can be so overwhelming that bankruptcy seems to be the only way out. Because bankruptcy can have such a devastating effect on your credit score, it’s better to seek other alternatives before filing Chapter 7 or Chapter 13 bankruptcy. One of these alternatives may save you from bankruptcy and save your credit, it’s better to take it, even if it will take a little longer or cost a little more to get rid of your debt.

If you ultimately have to file bankruptcy, you can have peace of mind knowing you explored the alternatives. Once the process is complete, you can work toward rebuilding your credit score.

Selling Some of Your Assets

Sell whatever you can spare and use the money to pay off your debts. Take action immediately when you notice you can’t afford to make payments. If you wait until you’re behind on payments, it may be too late to get caught up and avoid further action from your creditors.

You can sell your furniture, jewelry, and electronics on eBay, Craigslist, even in your front yard. Is this a radical way to avoid bankruptcy? Perhaps. Many people can’t get past the inconvenience of living without their things, but you can adjust and it’s only temporary. It will help you avoid bankruptcy and spare your credit.

Pay Your Way Out of Debt

Can you afford to pay off your debts over a period of time? You’d have to if you file Chapter 13 bankruptcy either to save an asset or because you failed the means test for Chapter 7. If you take a closer look at your budget, you may be able to cut out those nice-to-haves like cable or satellite television, landline and cell phones. These are examples of some expenses you can cut without too much pain.

If you’re already living on a barebones-budget, how about increasing your income by working overtime or part-time? Hobbies and skills can also help you get some extra money to avoid bankruptcy. Here are dozens of ideas for getting extra money to pay off your debt.

Ask Creditors to Help You Avoid Bankruptcy

Your creditors would rather get some money from you than no money at all. Let your creditors know you are having financial difficulty and want to avoid bankruptcy. Express your willingness to pay the debt and ask if they can help ease the burden by lowering your monthly payment or decreasing your interest rate (or both). Many credit card companies and banks have hardship programs intended for this type of situation.

Before you enter a hardship program make sure your monthly payment and interest rate actually go down. Otherwise, you could be stuck with an even higher minimum payment.

Seek Consumer Credit Counseling

If you don’t have luck working with your creditors on your own, enlist the help of a professional. Find a consumer credit counselor who has experience working with creditors to get your payment and interest rate reduced.

The new bankruptcy law requires credit counseling prior to bankruptcy filings anyway so it’s worth it to strongly consider credit counseling as a bankruptcy alternative.

A consumer credit counselor can work with you and your creditors to put together a debt management plan to repay your debts over three to five years. The debt management plan payments may seem out of reach, but if you look, you may find holes in your budget that allow you to make the payments.

Get Help From Family and Friends

Normally, borrowing money from family and friends is a bad idea. It’s been known to create hardships and even end relationships. But there’s an exception to every rule, and bankruptcy is one. Take the time to calculate how much money you need to avoid bankruptcy.

Carefully consider how much you’re able to contribute to your debt, then ask friends and family to help you make up the difference. Before you approach them with your wallets turned out, come up with a plan for how you will repay them once your financial situation has turned around.

Settle With Creditors and Debt Collectors

Debt settlement is another of those things that should be avoided under normal circumstances. However, the brink of bankruptcy isn’t normal. If you have to choose between settling a few debts or filing bankruptcy, settle the debts, but do it right.

First, consider using a debt settlement company. The best debt settlement companies can save you time, trouble, and a lot of money. Second, look for a debt settlement company that specializes in your state and offers some kind of guarantee. Ask for references and look at their Better Business Bureau report and record. Finally, be ready to pay the lump sum settlement amount as soon as an agreement has been made and be aware that settlements can often be spread out over a period of months. Again, this is where the experience and expertise of a reputable debt settlement company can help you.

Use Everything in This List

Rather than read through this list and decide that none of these things will work for you, consider the entire list as an arsenal of tools you can use to avoid bankruptcy. For example, you may be able to avoid bankruptcy if you sell some assets, cut back on your budget, make a deal with your creditors, and borrow money from family and friends.

What Does the Bible Say About Credit Card Debt?

What does the Bible have to say?
Perhaps the most important, yet most difficult, aspect of our Credit Card Relief Education (CCRE) program at Integrity Debt Solutions has to do with what the Bible says about money, debt, usury (interest), repayment, forgiveness, and a host of other equally relevant topics.

As a company owned & operated by Christians, and because many (if not most) of our Clients are Christians, our prayer at Integrity Debt Solutions is that you will take some time to patiently & thoughtfully explore this Special Report as we attempt to share what we have learned from hundreds of hours of study of both the Bible (God’s revealed word) and the moral issues surrounding the CCRE program.

While not an exhaustive study of the topics, this report will hopefully explain the major reasons why we believe that CCRE is not an unbiblical service nor is it encouraging irresponsibility, “debt avoidance”, or the like. In fact, it’s quite to the contrary! Our goal for our Clients is to negotiate a drastically reduced amount (which the banks agree to settle on) and/or show our Clients how they can position & protect their families from the very shady and questionable practices of the banks/credit card companies. We encourage you to read on….

The concept of forgiveness. . . .
Much like the concept of having your sins forgiven by Jesus Christ’s death on the cross (covering a debt we could not pay), so too does the CCRE process strive to forgive/reduce a debt that holds people in bondage setting them free from something they may never be able to pay.

When a person realizes that he or she is a sinner that needs to be saved, receives forgiveness, and starts life as a new creation in Christ, the realization of this spiritual truth serves as motivation to love the Lord with all your heart, mind, and strength – committing never to return to the past lifestyle. This is what being born-again is all about!

Allowing the CCRE process to serve you and your family and “forgive” as much of your debt as possible, will hopefully motivate you to never again become enslaved to the worldly system of credit card debt. Our prayer is that you will then have the freedom & desire to follow biblical principals that have stood the test of time!

It is our hope & prayer that having an overwhelming financial burden forgiven will save marriages, alleviate undue stress, reduce serious health problems (both physical and emotional), and most importantly restore a deep spiritual relationship with God that has been lost or damaged.

With love & appreciation now motivating the church and a renewed realization of financial stability, perhaps the body of Christ will now make giving (a lost biblical mandate!) of primary importance once again!!

A Simple Parable. . . .Real or Counterfeit?
As Jesus often taught in parables to illustrate a deeper truth, please allow us to share with you a simple parable that perhaps will shed some light into the issue of debt in specific relation to credit card companies.

Imagine that, over the years, your neighbor Joe has graciously loaned you $20 here and there to cover gas fillups, a hot dog & lemonade at the ballpark, and other little events that found you short on cash. Each time you paid him back and your record of stewardship in Joe’s eyes was solid.

However, one particular month you find yourself very much behind on your bills and, needing some money to get you through the month, you approach dependable Joe saying, “I’m really embarrassed to ask you this Joe, but things are very tight for us right now and we’re finding ourselves in a bit of a bind. Could you loan us $1,000?”

With his usual willingness, Joe hands you ten crisp $100 bills and says, “No problem, you have always paid me back before, so I have no reservations about helping you. In fact, I’m glad to do it!” You take the money and pay your energy bill, purchase some groceries, and send some checks to several creditors – each time the vendors accepting payment with no problem whatsoever.

Several days later, you look out your living room window only to see Joe being led into the back of a squad car handcuffed & humiliated. Come to find out that dependable Joe was printing new money in his basement!

Here is the dilemma in which you are now confronted: Do you owe Joe $1,000?

You spent the money he gave you. You received goods & services – many of the items still in your home! Your vendors & creditors freely accepted your payments as did the bank in which you deposited the money.

We believe the answer is no – you did not borrow money from Joe even though you thought you did! And here’s how this story relates to the credit card companies. . . .

Credit Cards and Money Creation. . . .
Contract law states that in order to enter a legitimate loan transaction two parties must be at risk – the lender is at risk (they may not get their money back) and the borrower is at risk (they may pay back more money than what they borrowed). This legitimate loan practice is followed in most loaning cases EXCEPT when it comes to credit cards.

When a credit card application is approved and a consumer is issued an account with a line of credit, what actually occurs is that new money is added into the money supply & economy. The credit card companies are not using their own assets or money for you to access, they are creating new money by “monetizing your signature”, and thus they are never at risk and violate contract law.

There are many cases that have already been decided on when it comes to the issues of money, credit, and banking. The collection of interest on credit issued by a bank or a credit card company is in direct violation of all usury laws. The laws are very specific concerning the corporate authority of banks and credit institutions.

Contract law states: Two Parties Must Be At Risk; your bank enters into a contract with you and don’t take on any risk because they don’t lend you depositor money, they create it out of thin air by monetizing your signature. You are the only one at risk (because of interest rate risk which means your risk is that you will pay back more money than what you thought you borrowed). This violates contract law. They charge you interest on an alleged loan which is against Usury laws. They don’t provide Full Disclosure in their contract explaining how they create a promissory note using your signature.

We base the initial phases of the CCRE process on Federal Laws, U.S. Supreme Court decisions, Title 15 of the United States Code section 1692, the Fair Debt Collections Practices Act – Section 1601, the Fair Credit Billing Act, the Uniform Commercial Code – Section 203, and numerous Banking and Lending laws.

Banks are breaking the laws as stated in the US Codes Title 15, Section 1666 and 1692, Truth in Lending Laws, Usury Law, and The Fair Credit Billing and Reporting Acts.

From these foundational truths & laws, we help you initiate a legal administrative dispute which then can develop into a dramatically reduced settlement saving you and your family thousands and usually tens of thousands of dollars! (Our average client enters $42,000 which guarantees at least a $21,000 reduction!)

Perhaps another “parable” to illustrate this truth would be helpful except this time it’s not fiction. . . .

The Credit Card Story. . . .
Imagine that you walk into your local bank to apply for a credit card rather than completing an application in the mail or on the internet. For illustration sake, this particular small local branch has $1,000,000 of deposits (actual cash) and you are approved for a $9,000 line of credit.

Because of GAAP accounting (Generally Acceptable Accounting Practices) the minute you are approved for your $9,000 credit card line, the bank will claim this as an asset (this is monetizing your signature – creating new money based on your signature) thus claiming to now have $1,009,000 of assets on the books.

Suppose you max out this $9,000 credit card and, for whatever reason, don’t/can’t pay the balance on the account. Where does that leave the bank? Well, first of all, the bank is allowed to write-off the $9,000 as a bad loan after 180 days and receives their tax deduction/credit. Secondly, after writing it off, they are now back to their original $1,000,000 of deposits they had before you were approved for the account. Thirdly, they did not lose one penny during this entire ordeal. Result: (1) the bank received money from you while you paid the interest on the “debt” thus receiving interest on money they just created; (2) the bank also received a tax deduction when they wrote of the $9,000; (3) the bank did not lose any money because they never had any of their own money at risk.

To reiterate (because if you tell the truth enough times, people will start to understand it), contract law says that in order to enter into a legitimate loan transaction BOTH PARTIES INVOLVED must be at risk….the loaning institution must be at risk (they may not get back their own money) and the borrower or consumer must have a risk (we may pay back more money because of interest).

However, this is not what the credit card companies are doing. They are simply creating new money and adding it into the money supply & economy.

This is the reason our CCRE process has worked so powerfully well for hundreds of Texas families. It is also the reason that you should consider allowing us to serve you and your family – because this is a LEGAL, ETHICAL, and BIBLICAL solution to get you back on the straight and narrow path AND because of the state’s consumer protection laws in Texas, we can now help even more powerfully!

Every Christian’s Goal. . . .
The Christian’s goal & desire in our opinion should be to owe nothing to anyone except to love one another (Romans 13:8) and not be a slave to money (Matthew 6:24), but a bondservant of Christ (Colossians 4:12, Romans 1:1).

Credit card debt (and any debt) takes away our freedom and makes us a slave/servant to that which is unbiblical and ungodly. We should do whatever we can – legally – to get out of these situations (repent?) and do a 180 degree turn to remove ourselves from this worldly bondage.

We’re glad you read through this information. The next step is to contact us to complete the Confidential Profile so we can explain exactly how the CCRE program can & will reduce your debt by at least half – guaranteed!

In Your Service & In His Grip,

The Team at Integrity Debt Solutions – Texas!

A List of Scriptures to Consider. . . .
(All scripture is from the New American Standard Bible – NASB)

Nehemiah 5 – “Usury Abolished” is the title of this section where God commands the forgiveness of money/debt and usury….a must read!

John 8:32 – “…and you shall know the truth, and the truth shall make you free.”

Hosea 4:6a – “My people are destroyed for lack of knowledge.”

Proverbs 24:5-6 – “A wise man is strong, and a man of knowledge increases power. For by wise guidance you will wage war, and in abundance of counselors there is victory.”

1 Timothy 6:10 – “For the love of money is a root of all sorts of evil, and some by longing for it have wandered away from the faith, and pierced themselves with many a pang.”

Exodus 22:25 – “If you lend money to my people, to the poor among you, you are not to act as a creditor to him; you shall not charge him interest.”

Leviticus 25:36-37 – “Do not take usurious interest from him. . . . you shall not give him your silver at interest, nor your food for gain.”

Deuteronomy 23:19 – “You shall not charge interest to your countrymen: interest on money, food, or anything that may be loaned at interest.”

Psalm 37:21 – “The wicked borrow and do not pay back, but the righteous is gracious and gives.” (If you borrow, we absolutely agree – you should pay the money back. If you were led to believe you borrowed but NEVER did, is there really a debt? If the credit card companies NEVER loaned you any of their money, but created new money into the money supply, did you borrow from them? We believe the answer is no.)

Proverbs 22:7 – “The rich rule over the poor, and the borrower becomes the lenders slave.”

Deuteronomy 28:12 – “The Lord will open for you His good storehouse, the heavens, to give rain to your land in its season and to bless all the work of your hand; and you shall lend to many nations but you shall not borrow.”

Please visit our website at www.DebtSettlement-Texas.com.

What Clients are Saying About Integrity Debt Solutions

Below are some actual client testimonials from people across the great state of Texas. Read for yourself as they explain in their own words what they experienced and how much money they saved in getting a fresh financial start with the number one company in Texas.

Integrity Debt Solutions has been specializing in Texas since 2004 and they have an A+ rating with the Better Business Bureau. They also offer a money back guarantee in writing which states that if they cannot help you reduce your debt at least 40%, then you will get the program for free.

Listen to these satisfied clients . . .

“Back in 2006, I had over $142,000 in credit card debt and wasn’t sure what to do or where to turn. I researched my options and chose Integrity Debt Solutions-Texas because of their vast experience and their thorough knowledge of Texas law. I also had excellent credit that I was concerned about, but I had to do something! After 2 years, I’ve saved well over $100,000 and have credit scores of 604, 590, and 642, which I consider pretty good. I really didn’t need perfect credit these last couple of years – I needed to get out of debt first! Good credit was only sinking me deeper! I’m now starting credit repair, I’ve found out that I easily qualify for a new car loan, and am excited about my future again!”

Terry – Insurance Representative

Dallas, TX

Age 41

“I found myself in a very stressful & frustrating position – lots of different accounts, one account over $16,000, and a huge monthly minimum payment. When I researched my options & prayed for direction, Integrity Debt Solutions was the clear answer. They are a Christian-based company, I have received ongoing and consistent support, and now, more than three years later, I know I made the right decision!”

Sandra – Self-employed

Fort Worth, TX

Age 50

“I was really backed into a corner with not many places left to turn…..the credit card relief process has given me hope and a bright financial future once again – simply amazing! I saved over $100,000 and some people didn’t think it was possible. Well, it is – feel free to share my name & number with others, I’ll be happy to share my story with them.”

John – College Professor

Irving, TX

Age 55

“IDS-Texas . . . I just want to thank you from the bottom of my heart . . . my stress level has gone WAY down and I actually can breathe a little now! We just settled our final account with Chase at 35% and I can hardly believe we’re totally done! We will certainly recommend you to anyone that calls us – $143,000 down to $55,000 – simply amazing!  Feel free to share our number with ANYONE researching your service.

Hal & Fran – Semi-retired

Richmond, TX

Age 79

“I went through a divorce 4 years ago and if that wasn’t expensive enough I incurred some medical bills. I was swimming in debt up to my ears and felt like I was about to drown when I did a simple web search and came across your website. After completing the online form, I went through the interview process and then did some thorough looking into your company. All I can say is that everywhere I turned I found good news and solid evidence, but I still had this lingering doubt that a fresh start could really happen to me. Well, after completing the program and settling all my accounts for 35%-40% and saving $38,000 I am definitely a believer! I almost can’t believe it happened, but it did and I’m more than happy to have you add my name to your reference list – have any future clients call me and I’ll share my story & great results. Oh, and one more thing . . . my middle credit score is now 657 and I will continue to take steps to improve it!

Jeff – Software Consultant

Austin, TX

Age 36

“One of the main reasons we decided to use Integrity Debt Solutions is that they are Christian based. We have been served in a very competent, trustworthy, and kind manner! We praise God that He led us to this company for our fresh start!”

Sherri – Homemaker

Bonham, TX

Age 39

www.DebtSettlement-Texas.com

“The Credit Card Relief Education program saved me over $33,000, and looking back, I wish I would’ve started sooner!”

Tino – Retiree

Encino, TX

Age 65

“At first we felt hopeless, stressed-out, and doubtful that there was a solution to our problem. . . . now, all of those fears are gone and hope, confidence, freedom, and a bright financial future are all here again!”

Dan & Kristi – Construction

Mesquite, TX

Age 43 & 42

“In June of 2006 I entered the CCRE program with 9 accounts, 65K in debt, and a great credit score. At the time, I knew that whatever path I chose, it would negatively affect my credit unless I paid the entire 65K plus another 30K in interest by the time it was all paid off (I had already paid about 40K in interest!). Today, I’ve saved over 50K on the principal, plus the 30K in eventual interest and my credit score is back to 638. It will climb more as I take the appropriate steps, but looking back, I’m surprised at how stubborn I was about my credit rating. IDS-Texas told me everything up front and I highly recommend their service!”

Lance – Businessman

Plano, TX

Age 40

“We had been praying for almost 2 years that God would forgive the debt according to the story of the debtor and the King in the gospels. When we came across your information we knew that God had answered our prayer and He was showing us the way to proceed. We are now totally debt free and free to serve without that old burden around our neck!”

Thomas – Missionary

Arlington, TX

Age 37

“I had researched several options and none of the other company’s math seemed to work. I did a lot of due diligence into IDS-Texas, spoke with several of their current & former clients and saw the good that was done for them and now I’m seeing the good for myself! I’ve saved over $100,000 – Thank You!!”

Jack Moss – Retired Accountant

Lubbock, TX

Age 67

“Bankruptcy was not an option for us because our income was too high and we didn’t qualify. So I tried to call and work out a deal with the credit card companies, but I had absolutely no success. My minimum payments more than doubled and I could no longer afford to send in a $1,000 monthly payment. I did my research and IDS-Texas was the clear winner for us and we’ve saved more than $40,000!”

Ed & Tonya – Business Owners

Alvarado, TX

Age 46

“I had some old credit card debt that I desperately needed help with. My goal was to settle them and a friend of mine referred me to Integrity Debt Solutions. The first two accounts they’ve worked on for me were both settled at 20% – I can hardly believe that I saved 80%! If I didn’t see it for myself, I hardly would believe it. You are welcome to use my name & phone number because I know some people won’t believe it unless they speak with me themselves!

Troy – Teacher

Dallas, TX

 Age 38

www.DebtSettlement-Texas.com

“My wife & I are a young couple starting out with two young children. We slowly accumulated credit card debt that was going to bury us for the next 10 years unless we took some proactive steps. We were very uncertain at first, but now that we’ve been working with Integrity for about 8 months now, we know we made the right decision. Our fears have now been replaced with hope & confidence and getting a fresh start is awesome!”

Brad & Monica – US Army

Lubbock, TX

Age 33 & 30

“I came across Integrity Debt Solutions-Texas with $70,000 in credit card debt on 6 accounts. It took me ONE YEAR to finally decide to go through with their CCRE program. I was skeptical, doubtful, and scared – even though they had been doing this for a long time and even though they offered a money-back guarantee. I still refused to go forward. That was over 2 years ago and now my wife & I have saved over $50,000. I wish I hadn’t waited so long, but I’m sure glad we used this service!”

Mike – Allstate Insurance

Keller, TX

Age 33

“My husband & I had started a business and then the economy had come to a crashing halt at the end of 2003. We kept our head above water for a year or two and then we realized that we needed to take some kind of action. With more than $90,000 of debt on 8 accounts, we researched, compared, and prayed about who we would go with. IDS-Texas was our choice and their competence has truly been a live saver – we’ve saved more than a year’s salary and I don’t know where we’d be today without them!”

Dana – Business Owner

Corsicana, TX

Age 42

“Just as a regular guy & hard worker, it was very humbling to admit I was in this situation to ask for help with such a private issue such as credit card debt! However, IDS-Texas was professional, showed me what needed to be done, and saved me $22,400. If I could, I would shout their praises from the mountain top!”

Chad – Businessman

Big Spring, TX

Age 41

“The insight & expertise that I received from the very start was a HUGE relief. From the advice & recommendations I received, I was able to position myself and our accounts for great success. I ended up settling one MBNA account for 33% of the original balance and a Chase account for 33% as well. I had some doubt at the beginning and was hoping that their program would work and now that I have saved so much money I’m happy to be a reference. Feel free to have people call me if they want to hear a wonderful success story!”

Jeff – Businessman

Combine, TX

Age 46

It took me and my wife a LONG time to decide if we wanted to sign up with IDS-Texas…but after hemming & hawing, we finally got to the point where we HAD to make a decision. We hoped & prayed we were making the right decision. Now, after completing the program, we can’t believe the apprehension we had and we are more than happy to HIGHLY recommend IDS-Texas and their entire staff. Everyone we had contact with treated us with respect and gave us the service that turned us into “raving fans”! Oh, by the way, we saved over $29,000.”

Carl & Patty – Business People

Katy, TX

Age 52 & 50

“Because of my Mexican background, I wasn’t sure who to trust. But after saving $18,500 I have become a BIG believer in Integrity Debt Solutions-Texas and I strongly recommend them to anyone needing help with credit card debt!”

Danilo – Businessman

Spring, TX

Age 32

www.DebtSettlement-Texas.com

“As a single female, I didn’t know who to trust or who to ask for advice. I was so scared at making the wrong choice, but being able to call the many references that IDS-Texas provided and finding out for myself that other clients were never left alone made the choice easier for me. The company will actually walk you thru each step of the process and show you what needs to be accomplished. I’m happy to say I saved a little over $40,000 and I endorse IDS-Texas whole-heartedly!”

Robin – Nurse

Fort Worth, TX

Age 36

 “When my wife & I first started this journey, it seemed like a daunting task to figure out WHICH direction we wanted to pursue and then WHICH company was the most trustworthy. After interviewing several companies and doing a lot of research online & calling references (I was a HUGE skeptic!), the decision became an easy one – IDS-Texas was the hands down winner because they specialize in Texas and because they took so much time with us EVERY time we called to review things & discuss our situation. Their knowledge is deep and their concern is sincere and we ended up saving 65% of our total debt which was about 60K so we paid about 20K. Oh by the way, 6 months after completing the program, I qualified for a new car loan for up to 50K – was I pleasantly surprised!

Steve & Gina – Business Owners

Rowlett, TX

Age 53 & 49

“I was really depressed and wondering what I could do about my finances & debt problem – it was almost a hopeless situation. We had over $65,000 of credit card debt, a large $50,000 loan against my 401K, and then a loss of my job. I was kind of frozen with fear and it was hard to even openly look at things. However, I mustered the courage & energy to call you and then do some research on your service. I called many of the references and also the BBB – I was greatly encouraged and felt that our prayers were answered! Now, after more than 2 years, I know we made the right decision and our finances have turned around dramatically! I can’t recommend your company & service highly enough. Thank you for your integrity and the unending support you’ve offered . . . you all have been a real blessing to me & my wife!”

Lee Muncy

San Antonio, TX

Age 58

“We had over 90K in total credit card debt and were just about hopeless. Depressed does not begin to describe our mood when we first talked with IDS-Texas. But after our initial consultation (which was free), we had such a strong sense of hope and relief that we knew we had arrived at the right place. A little more checking & research confirmed our suspicions and we never looked back. We saved about $53,000 and we would be happy to speak with anyone looking into IDS-Texas!”

Steve – Corporate Professional

Houston, TX

Age 56

“My wife & I have a family, make a modest income, and a few years ago we found ourselves in a tough situation. We had 10 credit card accounts adding up to over $34,000 as well as some hospital bills from one of our children’s illness. We didn’t know what to do so we got on the internet and started doing some homework. We came across IDS-Texas and slowly and diligently went through more homework – we called the Better Business Bureau to make sure you were legitimate and reviewed all the materials you sent us and we were convinced this was the best direction for us. After completing the program, we paid a little over $13,000 on all our debt which came to a savings of about 60% and we now have a fresh start! Feel free to use our name & phone number as a reference and keep up the great work – we thank you very much for helping us!”

Jon Patajo

Katy, TX

Age 37

www.DebtSettlement-Texas.com

Avoid bankruptcy in Texas – Debt Settlement instead

If you want to avoid bankruptcy and are considering some kind of debt relief option like debt settlement, debt consolidation, consumer credit counseling, or some other debt management program, this report is a must read! We reveal the main lures that unscrupulous companies implement to scam unsuspecting consumers.

Plus we tell you the dirty little secrets that scammers don’t want you to know making you a wise & informed steward rather than an uninformed victim.

Do you want to land on your feet with a fresh financial start? Do you want to avoid

major embarrassment and serious disaster? This report will empower you and give you valuable insights from years of experience and it will allow you to do business on your terms – not theirs.

An All Too Common Story

Carol & Jim were very much the average couple struggling with the average problems in life including some credit card debt. After losing her job and having Jim’s income reduced because of economic hard times, Carol began looking at options to relieve the burden. She was willing to share her personal horror story as long as her last name was not used.

It all started with a phone call from a debt settlement company. The representative told Carol that their company could get her creditors to lower their interest rates. This would let Carol pay off her credit card, mortgage and car loan debt three to five times faster and even lower her monthly payments – which was her most important need.

“She specifically told me that I would save at least $2,500 in a very short time and then would save much more over time,” Carol states in her declaration to the Federal Trade Commission.

Carol was skeptical, especially when she heard the price was $499 to start. But the salesperson assured Carol she would see lower interest rates within the first 30 days of the program and that these savings would more than cover the initial fee.

“She spoke with such confidence and zeal that I was moved to tears,” Carol says. “I was thrilled and full of hope to know that I would receive immediate help and then finally be able to pay off my debts.”

But it didn’t turn out that way. Despite repeated attempts, Carol’s “financial consultants” could not lower the rates on any of her credit cards. The company would not refund Carol’s $499 fee as promised. The Federal Trade Commission has sued the firm.

A Widespread Problem
In the last few years, the Federal Trade Commission has sued more than a dozen credit card debt relief companies. “They simply lie to consumers,” says the FTC’s Alice Hardy. Now, there are industry standards and compliance issues & laws companies are required to adhere to.

FTC ad IRS investigators have also found some counseling and debt settlement services that claim to be non-profit when they are actually a for-profit company. The non-profit pitch can make a potential client feel confident about signing up for the service. “They’re preying on the consumer’s trust without fully checking out the company,” Hardy says.

Some of the bad apples in this industry mislead people about their charges. “They either say there are no fees involved or just a small fee,” Hardy explains. “Sometimes, they don’t mention fees at all. Then, after a few months, the consumer discovers that there are additional fees or even worse that the money they’ve already sent has not been going towards their credit cards or their escrow account in order to settle in the future.”

Bruce, another average American who encountered your typical financial setback, turned to a company that promised to lower his interest rates. He was told to send them a monthly check for $265.

“It was my clear understanding that the money I began sending them was going to be held in an escrow or trust account in order to pay off my credit card bills,” Bruce told me. In reality, it turned out to be a “referral fee” to find him a company that would supposedly help him.

“It was a nasty experience,” Bruce says. “They basically stole my money.”

SECRET #1: Not All Debt Settlement Programs Are the Same
Some companies now claim they can negotiate a “one-time” settlement with all of your creditors at the same time which will reduce your principal by as much as 40 to 70 percent. By doing this, they say, your monthly payments will drop dramatically.

However, in truth, credit card accounts can only be settled one at a time – unless you have multiple accounts with the same bank or credit card company. And many credit card debt relief or debt settlement companies claim to have experience in settling debts for consumers when all the experience they really have is how to swindle unsuspecting victims.

Yes, legitimate debt settlement companies have been able to reduce consumer accounts by 40%, 50%, 60% or even 70%, but you need to be careful between the authentic & the counterfeit companies.

A general rule to go by – ask for proof!! If the company you’re dealing with does indeed have much experience settling debts for their clients, they will have written proof and be able to provided it. The smart ones get their proposals in writing. Simply ask to see copies of the negotiated settlements with the client’s name blacked out to maintain privacy. Then, once you receive these copies, ask them if you can call the client to see if they were satisfied with the settlement. If the company refuses to share this information claiming “client privacy” protection, don’t believe them. If you had a company settle an account for you for 30%-50% of the balance (saving you 50%-70%) would you be willing to share your story with a prospective client or two in the comfort of your own home while keeping the issue private? So would we (and our clients too – we have a looong list of client references we’re happy to share with you!).

Another huge warning sign is this: if a debt settlement company asks you to send money that will be deposited into a “trust” or “savings” or “escrow”account in your name to be applied to future settlements, be VERY careful. A good part of this money usually ends up being taken by the company for “additional” fees that they were sure you understood. Some debt settlement companies have a legitimate account where your savings will be safe and used for the proper purpose with no extra fees, but conduct your due diligence well before committing.

The best thing to do is to create your own settlement account at an insured financial institution that only YOU can control. The fewer people that have access to your settlement account, the better. Let the settlement company negotiate on your behalf and when they’ve reached an acceptable level of settlement for you (and you’ve received it in writing), then send the money.

Even if you have a good settlement offer (a 40% reduction of the balance where you pay 60% of the balance is an excellent average according to industry standards), it is best if you can send the pay-ment directly to the bank, credit card company, or whomever you’ve settled with (like an attorney or collection agency). Sending money to the debt management company can sometimes be dangerous as they may charge additional fees before forwarding your payment.

SECRET #2: How to Expose Weaknesses and Evaluate Good & Bad Companies
Facing mounting bills can be frightening, but getting credit card relief is not a decision that should be based on hearing a radio commercial or visiting a website or getting a sales call. You want to find an organization that will design a debt relief plan specifically for you.

Shop around. Compare a couple of services and get a feel for how they operate. The credit counselor should spend at least 20 to 30 minutes with you in order to get a complete picture of your finances. If they don’t do that, you’re not really getting any counseling. And don’t allow them to rush you.

Ask a lot of questions and get those answers in writing. Ask if they guarantee their services. Ask if they have a list of client references that you can call from your surrounding area. If they balk, then be very wary.

Don’t rely on names or the claim of a non-profit status. Most debt settlement companies are actually for profit, but you should run from those that claim to be non-profit and actually are not.

Check any company out with the Better Business Bureau and find out if they have any outstanding complaints against them. Most companies will have a few complaints submitted each year, but they should also have a record of resolving these complaints to the satisfaction of both the client and the BBB. Complaints in and of themselves are not bad, but if they cause the company to have a BBB rating of C+ or lower, then find out why and don’t accept vague answers. A good name is what you want and all you have to do is find out where the company is located and go to that city’s BBB website – you will discover not only their complaint history but other valuable information.

By doing your homework you should be able to find a service that doesn’t over-promise and then under-deliver. Because the Better Business Bureau has only recently allowed new applications from debt settlement companies to be officially accredited with them (a BBB decision that was implemented late in 2011), you will likely not see the BBB torch or symbol on company websites unless they were just recently accredited. If you see the BBB torch on a website, don’t just take the company’s word for it either – confirm with the BBB that they are indeed accredited. Many websites simply copy & paste the BBB logo onto their website because they know prospective clients will almost never check it out!

However, you should still be able to check out any debt relief company in the city/state in which they are incorporated or do business and the BBB will usually have information on them. And whatever you find will be 100% credible because the BBB is an independent institution that cannot be controlled or manipulated and they have a long track record of being unbiased and protecting consumers.

The following is a shameless promotion for our company – Integrity Debt Solutions LLC – and something that we’re quite proud of and something that you will find quite revealing . . .

The rating that the BBB assigns to a company is extremely revealing and valuable and our company was recently awarded a Gold Start by the Better Business bureau due to the fact that we have had zero complaints within the last 3 years.

While the other companies we compete against have indeed helped many people in the past and while they may have delivered real results for consumers, the differentiating factor is clear for our clients: we offer a money back guarantee (no other company does so), our fees are lower than every single nationwide company, and we are a Christian-owned & operated company.

So the bottom line is this: in this day & age in which we live, with information being so readily available, there is no reason that you cannot find out if a company is for real or not. There is no reason that you can’t discover which company is going to deliver the best results for you and be accessible to you on a consistent basis.

Please remember that Integrity Debt Solutions is headquartered just outside of Denver, Colorado and to find our BBB record, simply go to www.denver.bbb.org and click “For Consumer” and then “Check out a Business of Charity”. Integrity Debt Solutions LLC is our licensed name.

It’s very comforting and beneficial as a company when you can point to SOMEONE ELSE who holds you accountable and rates you as the BBB does . . . basically the BBB is sharing who you can trust the most!

SECRET #3: The Issue of Guarantees
Does the company offer any type of service guarantee? If so, what is it? Find out specifics. If a company does offers no guarantee, be very careful – the best ones will and it should be in writing.

Additionally, steer clear of any debt settlement company that promises a quick fix to your debt related problems or tells you that debt settlement will not have a negative effect on your credit. Upon enrolling in a debt settlement program, your credit score will probably get worse before it gets better. This is a minor price to pay for a substantial debt reduction and not having to file for bankruptcy! Saving tens of thousands of dollars is a wonderful experience and something we share in the joy of with our clients – this is exactly what keeps us going and what gets us charged up!

However, it is important to realize that if you want to maintain a “great credit rating”, you have to pay your bills on time; anything else will cause your credit score to suffer.

While it is true that you can improve or repair your credit history later, realize that it may take a year or more of diligence on your part or even the hiring of a credit repair company/agency. Again, if you can live with a less than perfect credit rating for a while, the rewards are usually well worth the time and temporary inconvenience as you can often save substantial amounts of money and get a fresh financial start & new lease on life.

Some debt relief companies will offer specific strategies that can help you position yourself to minimize the negative impact on your credit. You will be pleasantly surprised to learn the relatively simple steps you can take to keep your score in the higher range, but the key is that you have to be proactive! A little diligence goes a long way especially in this important area!

SECRET #4: Companies That Specialize Are Most Desirable
Find out if the company you’re considering offers any specialized services or if they have specific expertise in a given area in the industry.

For example, some companies not only offer debt negotiation or counseling services, but they also may have a specialization in credit repair, monthly budget preparation, or asset protection.

Most settlement companies operate all across the US, but some are state specific, offering a great deal of expertise into your state’s consumer protection laws. While it may be true that nationwide companies deal with more clients and, as a result, have more experience in negotiating with different banks, what you gain in sheer numbers may be lost in the fact that those larger companies do not know very much about your particular state’s consumer protection laws.

It is very rare for a debt settlement company to specialize in a specific state, but if you find one they will typically offer you a much more targeted & specialized approach which will benefit you well in the long run. Additionally, hiring a company that specializes in your state will often turn your stress & anxiety into confidence as you become more educated on the specific laws in your state and the rights & protection you have by living in that state.

Another issue to be aware of is that larger companies tend to treat their clients as a number and do not offer the one-on-one, personalized attention that people in debt trouble really need. Larger companies typically have more overhead & expenses so their fees are much higher. A smaller company is able to pass down the savings to their clients and normally offer lower fees.

It’s not very hard to find complaints against nationwide companies that are just trying to attract a large volume of customers rather than servicing their existing clients to a high degree of satisfaction, building a good name & solid reputation, and then allowing good business to be the catalyst for future growth.

Smaller companies that specialize will give you more time, attention, and deliver better results – this is a consistently true fact. Plus, large companies often will not return your phone calls in a timely manner nor give you the personalized focused attention you will need.

And even though we are the ones who wrote this report, our A+ track record, zero complaints since 2004, and long list of client references (just let us know if would you like to call them) are more than enough proof of our reliability and something no other company can match!

SECRET #5: The Fallacy of Debt Consolidation
One of the easiest & fastest ways to receive relief is to consolidate all or as much of your debt as possible into one account that offers a decent interest rate and one convenient (and hopefully lower) monthly payment.

Some things you need to be aware of however are the following…

First, you must realize that transferring many balances to one account all of a sudden creates a zero balance on many of your accounts and those companies may even increase your available balance to attract your future business. You will have the false impression that you now have lots of breathing room and a new (false) sense of freedom.

Most likely, these old accounts that now have a zero balance on them will begin to lure you back by sending you “convenience checks” that you can use “for any purpose including writing a check to yourself”. And they usually have a very low promotional interest rate attached to them creating the illusion of free money! Using these checks, will take you back to them same situation you were in not long ago except much worse because now the total amount of debt you’ll have will be double!

If you don’t use these checks, we all know that “life happens” and suddenly you may start using those old cards just for a “small” charge here and there and you convince yourself that you will pay it off in full at the end of the month.

However, the next thing you know, you’ve charged up these old accounts and created a bigger problem than before and just like using the convenience checks, you now have double the debt you had before you consolidated all your accounts!

Even if you’re extremely disciplined (be honest with yourself!) and you do not charge up any of these old accounts, have you thought about what happens to the principal that you now have with the one large consolidated account? You have now virtually guaranteed that you are going to add years & years to the time it will take to pay off the outstanding balance.

But what happens if you are only one day late with your new consolidated payment in the future?

You guessed it – interest rate hike up the ying-yang! The banks are counting on a certain percentage of their clients being late and the statistics are overwhelming and bear the truth to their strategy. And now they can legally increase your interest rate to 19.99% or 24.99% or whatever is in the fine print (Did you read the fine print? Have you ever read the fine print??).

If you do choose to implement a debt consolidation strategy, whatever you do, do not close the old accounts that now have a zero balance. Go ahead and cut up the cards and commit to never using them again, but when you call the bank to close the account, you lower your credit rating/score dramatically. Leaving accounts open with a zero balance will actually increase your credit score as long as you can maintain the discipline NOT to use them.

Bonus Secret: Consumer Credit Counseling – Not All it’s Cracked Up to be
One option that consumers have in their quest for debt relief is Consumer Credit Counseling or CCC. This is a viable option for many, but again, you must know much of the truth before making the best decision for your specific situation.

With nowhere left to turn, many Americans look to credit counseling in a last-ditch effort to repair their finances. Credit counseling can be found advertised in nearly every medium, and it always looks great on the surface. Repair all bad debt? Great! Get lower interest rates? Perfect! Lower my monthly bills? Sign me up! However, as we all have learned at one time or another, appearances can be deceiving, and credit counseling has a few major drawbacks that you should consider.

It is estimated that about 60% of individuals who sign up for credit counseling drop out of the program before it is completed. And is it any wonder? When you enroll in CCC, they will examine how much money you have coming in and then they will tell you how much money needs to be sent to each creditor and for each bill you have. In other words, they will tell you how to run your life and what you can & cannot do. If you need someone to control your every financial move, then this accountability will be very helpful and you will achieve success.

Most credit counseling programs last about four years, and require a serious amount of budgeting and willpower in order to be successful. When most of your paycheck goes to paying off debts and you don’t have any extra money every month, you may easily become depressed and vulnerable because you are now in a “prison” of sorts with no freedom and someone else running your life. Credit counseling programs are stressful and sometimes not practical.

Although most credit counseling services advertise the ability to lower interest rates, this isn’t always the case. In fact, many of the major credit card companies will actually raise your interest rate as soon as you sign up for credit counseling, which seems a little bit counter-productive. However, creditors realize that those who pursue credit counseling services have one foot inside the bankruptcy grave, which would mean the inability to collect any money at all and therefore they deem you a “higher risk” thus raising your interest.

While credit counseling services might be able to reduce the monthly payments that you owe to your creditors, this isn’t set in stone. You mustn’t forget that the credit counseling company must take a cut in order to make a profit, which might actually increase you monthly payment. Further, a reduction in monthly payments doesn’t always mean a sizable amount. If they lower your monthly payments by $2.00, they have delivered what they promised you.

Another important fact about CCC is that your credit score will be negatively affected even though they may tell you it won’t. Don’t believe it. You also will not be allowed to apply for any new credit in the future. If you do, you will usually be forced out of the original terms of your deal.

If you are able to live within the confines & restrictions of a CCC agreement and you are comfort-able with someone telling you where your money needs to go each month, then you will definitely

receive relief and you will benefit from this service. Find one that has been in business a long time and has a respectable track record and find a person within the agency that you can work with and is compatible with your personality.

FINAL WORDS . . .
This report is by no means exhaustive but we hope that it has helped you discover the most obvious secret tactics and information that may not be readily available or at least that you need to search for.

Creditors began establishing debt negotiation departments in the late 1980s with the specific purpose of negotiating and settling credit card debt. They settle credit card debts at a discount because they understand that the alternative is often bankruptcy, in which case they get nothing.

Settlement benefits everyone involved: the creditors receive money from consumers who would otherwise have paid nothing had their debts been discharged in bankruptcy; the court systems are not as overloaded with collection/bankruptcy cases; and most importantly, clients can eliminate their debt and can enjoy the peace of mind that comes with a debt-free life and a second chance.

Debt settlement programs can help eliminate your credit card debt faster and for less money. You can explore whether debt settlement is the right debt relief option for you with no obligation.

If you are ready to pursue credit card debt relief and you want to learn more about what debt settlement can do for you, call us at 303-914-0233 and one of our friendly & knowledgeable debt consultants will listen to learn about your situation, explain our debt settlement and negotiation program and answer your questions. The consultation is free and there is no obligation.

If you have read this far, you are obviously serious about getting relief and you are also desiring to do your due diligence to find a reputable company. If you would allow us to speak with you for 30-60 minutes, one of our Authorized Agents at Integrity Debt Solutions can explain exactly how our company can help you and give you valuable insight into your specific situation.

Issues that you will want to know include…

(1) How can I minimize the negative affects to my credit score?

(2) What proactive steps can I take to keep my credit score as high as possible?

(3) How can I position myself for the greatest reduction in my overall debt?

(4) What is the difference of entering my debt versus including my spouse’s debt? (it’s HUGE!)

(5) What is special about living in Colorado & what specific benefits does it provide?

(6) What are the federal, state, and bank laws that protect me and exactly how does it help?

We can answer all of the above questions for you and more if you would allow us to chat with you for a brief period of time. An attorney would charge you $250 or more to share this information with you. We hope you will allow us the opportunity to serve you and we look forward to speaking with you soon!

Thank You,

Integrity Debt Solutions

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Does Debt Settlement Really Work?

Debt settlement companies often charge expensive fees, however, some companies charge very reasonable fees. Be sure to do your homework first. Debt settlement companies typically encourage you to stop paying your credit card bills. … Some of your creditors may refuse to work with the company you choose however most banks and credit card companies will usually settle for a reasonable amount. In some cases, the debt settlement company will be unable to settle all of your debts. Again, do your homework and look for a company that offers some kind of minimum results or even a guarantee.

Debt settlement companies approach your creditors and negotiate a plan in which each creditor agrees to cancel the loan for less than what you owe in exchange for a lump sum payment. … You also pay fees to the debt settlement company for its services.

Debt settlement isn’t the only option for people who are swimming in debt. … The fees are minimal, and much lower than you’ll pay a settlement or consolidation company — and you’ll pay off your debts, typically in less than five years, without all the damage to your credit and credit scores.

Go over your income and expenses with a fine-tooth comb, figure out what you can afford, and only agree to pay a realistic amount. Generally, you can negotiate the best settlement on a debt if you can come up with a lump sum amount to resolve the debtIf you agree to a payment plan, you will likely pay more over time.

Lump-sum settlement. This option involves negotiating with your credit card company to pay less than you owe. However, it only works if you have access to a significant amount of cash that you can use to pay the card company upfront. Your credit card company may agree to reduce your debt to the principal you owe.

Start low by offering to pay 30 percent or less of what you owe and negotiate your way to an amount that you and the collector can both agree upon. Make your offer attractive. If you’re going to ask that they settle for 70 percent off of what you owe, you should pay it in a lump sum payment.

It may take some time to get there, but most unsecured creditors will settle for around 30 to 50% of the debt. Therefore, you should start with a lower offer (around 15%) and negotiate from there. Have cash on hand to make payments soon.Creditors are more likely to settle if funds can be transferred right away.

Debt settlement companies are for-profit companies and charge fees for their services. These are often a percentage of the amount of the debt it’s settling and can be anywhere from 15% to 25%. If you owe, say, $30,000 and the settlement company charges a 20% fee, do the math.

 

How to negotiate with your credit card company

If your monthly credit card payment rivals your mortgage or rent, or if high interest rates are making it impossible for you to get rid of the debt, it might be time to negotiate with your credit card company.

According to Experian’s 2016 State of Credit data, American consumers had an average credit card balance of $5,551. With a median household income of $59,039 in 2016, it’s likely that most Americans use a substantial portion of their earnings to pay down consumer debt.

But when this debt becomes an unbearable financial burden, what can you do? One option may be to try to negotiate with your credit card company.

Credit card debt is typically unsecured debt, meaning a credit card company can’t come after your assets if you fail to pay what you owe. Since credit card companies don’t have this recourse, many are willing to negotiate a settlement with customers to recoup as much of the debt as possible.

“Credit card companies are about collecting the money. They’re going to size this up and if they say, ‘This is a person who sounds like a good risk and is likely to eventually repay this bill,’ then they’re likely to make concessions,” says Mike Sullivan, a personal finance consultant with Take Charge America, a national nonprofit credit counseling agency.

If you’re drowning in credit card debt, it may take a phone call (or several) to your credit card company to devise a workable solution. Don’t know where to start? Here’s a guide for how to negotiate with your credit card company.

Step 1: Understand how much you owe

The first step is to assess your credit card debt. If you have multiple credit cards, go through your statements and make an itemized list of how much you owe on each card and the respective interest rate.

Also jot down the customer service phone numbers. Now you’ll have all this information stored in one place once you’re ready to call your credit card companies.

Step 2: Explore your options

Before you pick up the phone, understand what settlement options are available and how much you can afford to pay. Each choice can affect your credit scores, and some may have tax implications. The most common settlement options are described below.

Workout agreement

With a workout agreement, you can ask your credit card company to do the following:

  • Waive or reduce the minimum monthly payment
  • Lower your interest rate
  • Remove past late fees

These actions can reduce your overall debt and help you pay off the balance in a shorter time frame. If you have some money coming in but not enough to meet your current monthly obligation and are facing longer-term financial challenges, then a workout agreement may be a good option.

Lump-sum settlement

This option involves negotiating with your credit card company to pay less than you owe. However, it only works if you have access to a significant amount of cash that you can use to pay the card company upfront.

Your credit card company may agree to reduce your debt to the principal you owe.

Hardship plan

If your financial difficulty is due to job loss or a serious illness, your credit card company may be willing to put you on a hardship plan. This is an arrangement that may lower your card’s minimum payment, interest rate and fees. The hardship plan will also typically include a structured payment plan.

Consumers who have temporary financial challenges should consider asking their credit card company if they have a hardship program.

Debt management

Nonprofit organizations like the National Foundation for Credit Counseling offer debt management programs. Under a debt management plan, the credit counseling agency works with you and your creditors on a financial plan. You deposit money with the credit counseling organization each month, and the organization uses your deposits to pay your creditors on schedule.

These programs do have qualification requirements and there is typically a fee. One typical requirement is that you must be able to pay off the debt in 60 months or less.

Debt settlement

For-profit companies offer to negotiate with your credit card company and try to get them to agree to a “settlement” to resolve your debt (typically, the “settlement” is a lump sum payment that is less than the full amount you owe).

With this arrangement, a consumer pays a debt settlement company a monthly payment. The company puts that money into an account. When the company reaches a settlement amount with the creditor, the funds are withdrawn — along with the settlement company’s service fee — and the creditor is paid.

However, because of the associated fees and detrimental impact on your credit scores (more on that later), using a debt settlement company should be considered a last resort before filing for Chapter 7 bankruptcy.

Common Question

Should I choose debt management or debt settlement?

If you qualify for a debt management program, this is the better option because less costly and doesn’t hurt your credit scores as much as debt settlement.

Step 3: Understand the risks

All these negotiation options come with downsides, and it’s important for you to be aware of them. The settlement you choose will depend on your financial situation.

With a workout agreement, your credit card company will likely cut your credit line, rendering your card unusable. This also will ding your credit scores because it lowers your available credit and increases your credit utilization ratio, which is the amount of debt you owe compared with your available credit.

Depending on how your credit card company reports the debt to the major credit bureaus, a lump-sum settlement can affect your credit scores.

If they report the debt as “settled” or a “charge-off,” which is debt that is at least six months delinquent and likely won’t be paid, then your credit will likely be negatively impacted. If the company reports the debt as “paid as agreed,” “current” or “account closed,” there may not be a negative effect on your scores.

There are tax implications too, since forgiven debt of $600 or more may be considered taxable income, Sullivan says.

A hardship plan may also affect your credit scores, depending on how it’s reported to the credit bureaus. And your debt is deferred — not forgiven — so you still must pay it.

Many credit counseling organizations offer debt management programs for a small monthly fee, and negotiating this way generally doesn’t hurt your credit scores (but your credit reports may indicate that you are enrolled in a debt management program).

“I would tell consumers who want the least impact on their credit scores to go to a nonprofit debt management company rather than a settlement company,” Jacob says. “The consumer pays back the entire amount borrowed, so the creditors realize that working with us is to their advantage.”

On the other hand, a settled account can remain on your credit reports for seven years, which makes it challenging to take out a future loan, Sullivan says. It also can hurt your credit scores significantly because you aren’t issuing payments, making it more likely your account will go into collections.

Also note that debt settlement companies charge hefty fees for their services. Keep in mind your forgiven debt may be considered taxable income as well.

Step 4: Call your credit card company

“Consumers can use a settlement company [to negotiate], or they can do it on their own,” says Linda Jacob, a financial counselor with Consumer Credit of Des Moines. “There’s no need to pay a company to settle for you. Save the fees and do the work yourself.”

If you’ve decided to negotiate on your own behalf after weighing your options, it’s time to call your credit card company. First, ask for the department that handles debt settlements or collections. You may want to prepare a script beforehand so you know exactly how to frame your request.

Clearly and politely explain your financial situation and ask for exactly what you want. The initial answer may be no, but that doesn’t mean you can’t be persistent — even if it takes multiple phone calls.

Document every conversation you have. Write down the names and job titles of anyone you speak to so you can reference them in follow-up calls if necessary.

“You can’t be afraid to ask for a supervisor or the supervisor’s supervisor,” Sullivan says. “The higher you go, the more likely you are to find someone who is willing to make a concession.”

Step 5: Get everything in writing

Once you’ve found someone at the credit card company who is willing to negotiate, make sure you get the terms of the deal in writing.

The credit card manager you made a verbal agreement with may leave the company or your account may accidentally be sent to collections. Anything can happen, so protect yourself by putting it all on paper.

Bottom Line

 Having deep credit card debt can feel as if you’re in financial quicksand — the harder you try to get out, the more futile your efforts. Among the five options we listed, you’ll have to weigh the financial pitfalls and impact to your credit before you decide which is the best way to settle your debt.

However, Jacobs and Sullivan say not to discount tried-and-true money management strategies before declaring bankruptcy or paying a debt settlement company.

These management strategies include sticking to a strict budget, getting part-time work to boost your income or negotiating lower interest rates and monthly payments. For consumers at the end of their financial rope, “all of this can alleviate the debt without trashing their credit,” Jacob says.

 

What To Do When You Find Yourself Deeply in Debt

If debt is mounting and you continually find yourself struggling every month, it may be time to seek debt relief. An important part of selecting the best way to eliminate your debt is to realize when it’s time to ask for help. Debt consolidation and debt settlement programs are both very popular ways to help consumers get out of debt in a short period of time, but are they right for you? Neither of these programs are available for people who are simply tired of paying their bills, but they are available to those who are already late with payments, have bills in collections or have had a sudden change in their income.

There are a number of non-profit organizations currently offering debt management services, which include both debt consolidation and debt settlement. Some companies may offer both, while others may specialize in one or the other. In order to be eligible for either of these programs, you must be able to show that there is not sufficient income to pay your bills as they currently require. If this sounds like your situation, debt relief may be just a phone call away.

If you are receiving calls from your creditor’s collections department, speak with them openly and honestly regarding your situation. Once you have signed up with a debt management company specializing in either debt consolidation or debt settlement, inform your creditor(s) of the name and telephone number of the company. In most cases, this will stop the collection calls while the creditor verifies the information that you provided. By explaining the fact that you are working with a company who will be submitting a proposal on your behalf, most creditors will accept this information as your good faith desire to repay your debts. As the telephone begins to stop ringing, you will gain some much needed relief from the stress associated with being constantly reminded of your financial woes.

When a debt management company sends your proposed new monthly payments, interest rates and/or debt settlement offers, the creditor(s) will either accept or deny the offer. Within weeks, you will be informed of their decision and will have the ability to call the debt management agency to remain updated with creditor’s responses. After 1-3 months of consecutive payments made through a debt relief agency, most creditors will begin to list your account as current with credit reporting agencies.

It is recommended that consumers check their credit report periodically in order to maintain the accuracy of the content and to prevent them from being a victim of identity theft. Each year, you are entitled to receive a free copy of your credit report from each of the three credit reporting agencies, including Equifax, TransUnion and Experian. If you enroll in a debt consolidation or debt settlement program, it’s a good idea to check your credit report prior to enrollment and then again after six months. When you compare the two timeframes, you will likely see a great improvement as creditors begin to receive their payments and update your credit reports accordingly. If any of the information is inaccurate, you can file a dispute with the credit reporting agency and get the corrected version updated in a short amount of time.

Dealing with debt is not an easy task. In fact, it can be a very exhausting experience. Once you have faced your finances and made an important step toward eliminating your debt, your life will begin to improve right along with your credit score.

Getting Out of Debt – The Pros & Cons of Debt Settlement in Texas

If you are swimming in debt, you’re bound to start looking for a way out. Many people see debt settlement –an option that advertises to help you pay off your debt for much less than what you owe– as a way out of their financial woes. However, the truth isn’t quite as simple as all that. Debt settlement isn’t without pitfalls and consequences — and it isn’t for everyone.

What Is Debt Settlement?

Debt settlement is, simply put, hiring a debt settlement company to help negotiate lower payoffs on personal loans, collections, and open accounts like credit cards. Sometimes these companies misleadingly advertise their services as a way to consolidate debt — or “debt consolidation,” — but make no bones about it, this is not a debt consolidation loan. Their main objective is to negotiate a settlement with all of your creditors and lenders.

How Debt Settlement Companies Work

When you hire a debt settlement company you are hiring them to negotiate with your lenders on your behalf. Their job is to negotiate a new, much lower amount for you to pay on the account. In turn, you pay the debt settlement company a monthly payment and they pay your creditors, minus their commission or fee which they deduct from your payment.

When you hire a debt settlement company the first thing they will tell you is to stop communicating with your lenders or collectors. Their objective here is to get your lenders so desperate for some sort of payment that they’ll be more open to accepting a settlement deal. A settlement means that the lender, collection agency, or credit card company agrees to take a significantly lower payoff amount than what you actually owe, wiping your slate clear from the financial obligation.

Pros of Debt Settlement

There’s one obvious pro to debt settlement: a much lower, single monthly payment that you can afford. And, if a settlement is negotiated and accepted, you will pay much much less than you initially owed on the account. Many times this amount is less than 50% of the original debt, which can end up saving you quite a lot of money in the long run.

Cons of Debt Settlement

The cons from going down this road is that your credit score will be negatively impacted until your debts are negotiated and the payments have all been made. This means that you will not be able to obtain new credit cards while going through the process. This also means that if you want to buy a home or refinance your current existing mortgage, you will have to wait until you are finished with the debt settlement program.

In addition, if you want to buy a new or used car, you will have a higher interest rte and monthly payment than if you wait until you have paid all of the settlements and your credit report reflects that your credit card balances are now zero.

You will also be turned down if you apply for a personal loan or another unsecured loan. In other words, if you absolutely need perfect credit and if you will be purchasing big ticket items that a higher interest rate will affect you in a large way, than debt settlement or debt negotiation is not the direction you should go.

However, if you will not be purchasing any large things like a home, boat, or vehicle, than you should seriously consider debt settlement. Once you are finished with the debt settlement program, your credit score will improve dramatically and if you implement some basic credit enhancing strategies, you will start receiving credit card offers in the mail 3-6 months after you complete the program. This time though, you will be much wiser and hopefully more careful as to how you handle credit cards.

Another con is that you have the potential of getting sued on a delinquent account. Lawsuits can easily be avoided by settling the account, but some people are scared that a lawsuit will ruin their credit report or credit score. The truth of the matter is that a settlement on any account means that this particular account is finished and settled and you can never be sued on it.

Finding a company that will assist you in the event of a lawsuit or offers you asset protection is a great way to determine if that company offers a complete type of debt relief service.

Avoid Getting Scammed

It goes without saying that you do NOT want to get scammed by a debt settlement company. Some ways to do your own due diligence when it comes to dealing with debt settlement companies include:

– Ask lots of questions, like how long the company has been in business, what type of training its employees have. You want to go with a company that’s been around and has a staff who understand personal finance.

– Avoid companies that contact you rather than the other way around.

– Read — and understand — the fine print before you sign anything.

– Most companies offer free consultations before you sign anything. Use the opportunity to ask lots of questions and avoid any company that isn’t interested in answering them.

– Settlement companies with a proven track record of getting clients out of debt will have a long line of people willing to testify to that effect. Check the Better Business Bureau to see what people are saying about the company you’re looking into.

– Ask for references from the company so you can speak with former clients of theirs. If they will not or can not offer this, run away as fast as you can. A reputable company can easily locate clients willing to share their success stories with prospective clients.

– Find out if the company has any specialization in the area of debt you have or specializes in the state in which you live. Many companies offer state specific advice because each state has different consumer protection laws and if they can help you implement those laws, it will save you a lot of money and heartache down the road.

The Alternative: Debt Management Programs

Debt settlement isn’t the only option for people who are swimming in debt. If you’ve tried debt management on your own and are still struggling and need help, you may want to consider a Debt Management Program (DMP). DMPs are often run on a non-profit basis through a consumer credit counseling service, and have no motivation other than wanting to see ordinary people get out of debt. The fees are minimal, and much lower than you’ll pay a settlement or consolidation company — and you’ll pay off your debts, typically in less than five years, without all the damage to your credit and credit scores.

Another great thing about legitimate credit counseling services that offer DMPs is that they can also help you evaluate your debt situation, and if you’re not a good candidate for a DMP, they can help you determine if bankruptcy is an option — always a last resort, but there are cases where it’s the only option left.

Before you decide on a credit counseling service, make sure they are legit. You can do this by verifying that they are a member of the National Foundation for Credit Counseling by visiting their website or by calling 1.800.251.CCCS.

Best Ways To Get Out of Debt

Using a HELOC

A HELOC, or a home equity line of credit, is a revolving line of credit secured by equity in your home. That line of credit can be tapped and used for whatever you like; to pay off debt, to buy a car, to pay college tuition, or just to have as an emergency fund. HELOCs are commonly used to pay off credit card debt because the interest is tax deductible and the interest rates are relatively low.

The danger when using a HELOC is what happens if you go into default. Because a HELOC is secured by the equity in your home the bank can foreclose on your house if you don’t pay back the loan. For some people that’s far too much of a gamble just to pay off a little credit card debt.

Using a Balance Transfer

If you’ve got good credit then you’re probably already getting offers for zero percent credit cards. These are tempting, and for good reason. Converting your expensive credit card debt to zero interest credit card debt is a considerable trade off in your favor.

Many of these credit cards allow you to transfer your entire interest accruing balances from other cards AND allow you to make new purchases, all at zero percent interest for some period of time. If you’re disciplined you can use the grace period, normally between 6-12 months, to aggressively attack the balance and get out of the debt.

Using a Personal Loan

A personal loan is an unsecured installment loan. If you’ve got good credit it’s not that hard to qualify for personal loans well above $10,000. If you use the funds from a personal loan to pay off credit card debt then your credit scores should shoot through the roof because you’ll be converting score damaging revolving debt into score benign installment debt.

As far as the cost of the installment loan, it’s possible the interest rate will be considerably lower. If you have good credit you can get an installment loan in the low teens, while your credit card debt might be as expensive as the high 20s. Plus installment loans have a much shorter payoff period compared to credit cards.

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