Restoring Your Credit Before You Go Live Online, Part 2

Last Update: April 16, 2010

Welcome Fellow Wealthy Affiliate Buddies,

If you're reading this post, I wish to assure you that this is not a sidebar to Internet marketing. At one point in my Internet marketing career, I owed as much as $40,000K. Today, I'm on the "good buyer" list ...and I use as little credit as I possibly can.

If we go back to the $40K debt I owed, you can image that there was a lot of lost sleep. Worse still, many people owe as much as $150,000 and more. But..., this isn't about me. This is about you. I'm here to spare you heartache and worries. You don't have to buy anything from me. Just read these helpful tips I learned the hard way, after one debt settlement company walked away with $1,600 of my hard-earned cash. In the final end, the banks got their full balances plus plenty of interest to boot, but I walked away victorious. I was able to borrow from myself by paying prime + some interest to my own account.

However -- many people do not have this option.

One of the things you must do before you go live online is -- 1) settle prior debts, 2) learn to live by cash whenever possible, 3) keep 1 credit card (at a low interest rate) for emergencies, 4) find a steady way to generate seed money for your Internet marketing business, 5) work to stay out of future debt.., and 6) consider the use article marketing before you move into pay-per-click advertising. That's because it's free. It will cost you time.

Many ppc advertisers make online donations when they're tweaking campaigns. It is unavoidable in part because setting up ads that work can be both art and science..., and because they're setting up hundreds of ads targeting a several smaller niches within a major niche.

(Hint: When you set up your Google Adwords campaign to set up your first Google ads), look for the pause button. This button will help you control your daily ad budget without losing your shorts, and it will help you budge your monthly expenditures.

Many Internet marketers who are new to adwords can spend an entire monthly ad budget in one day ! So ...kindly be careful. Avert trouble altogether and seriously consider WA's ppc certification course.

Do not spend a ton of money on affiliate offers promising to deliver you the moon when ...in reality...you won't use most of them...and will most likely work your way into consistent profit. This is true because most of us (in Internet marketing) learn a few skills we can definitely monetize like -- website construction or general consulting for small businesses (dentists, doctors, attorneys).

Another way to find your Internet marketing stride is to find a solid system you can promote. That system should showcase many products and services housed under that one umbrella.

Let's move on.

Now let's talk about the tough issue -- credit restoration or debt settlement. Here is the information I promised earlier as part 2..., expanding debt settlement information in part 1.

A lot of people have been miserably duped out of substantial money when they hire a debt settlement company...and worse..., they still wound up owing creditors a lot of money. My job is to spare you unnecessary cash losses and to help you kill your debt in the smallest amount of time possible.

Plan on a repayment debt schedule varying anywhere from 2 - 5 years. The best companies will set a repayment schedule for 3 years or 36 months, on average.

Always research federal agencies and your state district attorney (D.A.) before you choose any debt settlement company, credit counseling service, or an attorney. Look for certifications, specific association memberships, and positive or negative reviews.

Historical recap -- we've have significant numbers of people (investors and more) who lost a lot of money during the last financial storm of 2008. I lost six figures so maybe that will help you ease your concerns, but you can absolutely turn your losses into profits!

Many debt settlement firms (at legal levels) are settling as much as $1.5 million in consumer credit card debt, each month. I talked about that point in "Restoring Your Credit Before You Go Live, Part 1". In that post, I promised to deliver more results...so here they are.

Credit Counseling Agencies

Credit counseling agencies offer precisely what the name implies.., however, within the U.S., these debt agencies help consumers pay back full debts over a scheduled period of time by reducing interest by whatever the creditor will allow. Banks are tough. They don't like to reduce their 15% interest rates. Department stores will sometimes go as low as half of what you originally agreed to pay. Some will go as low as 0%, but they are rare.

These agencies may or may not be for profit. They usually do not provide consumers with debt relief (discounted savings on their debt).

Here's the big point about these agencies like National Consumer Credit Counseling Service of America. It's nearly the same as filing for bankrupcy if you use this service. Here's why. They set up your money in a savings account and in some cases will claim to pay out money to creditors on your behalf. Take care if you agree to these terms. If you can, make sure you control your payments.

Debt Settlement By An Attorney

Here's where things can get confusing. Which company should you choose? Credit counseling? Legal help (called a debt settlement attorney). Bankruptcy? Your selection depends on a few things.

Have you had any late or missed payments? Have you incurred higher interest fees as a result of late payments? Are you 90 days past due? Sometimes, legal council can be best if you want to hire protection under law. That's true if any of your creditors think about taking you in court (should you elect debt settlement without an attorney). I'm saying this with care because a lot of people are sitting in this boat so don't feel that you're standing alone in an empty field.

Debt Settlement Without An Attorney

Debt Settlement is a viable option to help you Negotiate your debt. However, if you choose the wrong company, you may find yourself in worse shape than you were before. It is critically important that you choose the right company. Like any other industry, there are good companies and there are bad companies.

Good companies encourage people to shop before making a final decision. After your due diligence is done, here’s what you want to look for to make a solid decision. Make certain your choices are as clear as your debt settlement company.

Be careful!

If you don’t know what to look for it’s easy to get ripped off. This checklist is designed to assist you in making the right decision regarding the debt settlement company fitting your unique financial situation.

Here are 15 major questions you should ask your debt settlement company before signing any agreement:

1. Are you a member of TASC?

<!--[if gte vml 1]> http://www.neweradebtsolutions.com/images/14Question_flag.jpg" style="width: 20.25pt" height:31.5pt;visibility:visible;mso-wrap-style:square'> file:///C:\\\\DOCUME~1\\\\Barbara\\\\LOCALS~1\\\\Temp\\\\msohtmlclip1\\\\01\\\\clip_image001.jpg" o:title="14Question_flag"/>The Association of Settlement Companies is the largest trade association serving the debt settlement industry. TASC members voluntarily agree to comply with TASC’s strict industry standards. Any company you choose should be a member.

If not –Red Flag!

2. What are your fees?

<!--[if gte vml 1]> http://www.neweradebtsolutions.com/images/14Question_flag.jpg" 'width:20.25pt;height:31.5pt;visibility:visible;mso-wrap-style:square'"> file:///C:\\\\DOCUME~1\\\\Barbara\\\\LOCALS~1\\\\Temp\\\\msohtmlclip1\\\\01\\\\clip_image001.jpg" o:title="14Question_flag"/>A company should charge fees based on performance and results. Most companies charge a flat fee based on a percentage of your debt amount. The problem is that they collect their fees up front, before your debt is settled.

The majority of fees should only be paid AFTER the work is done, NOT before. Don't let any recruiter pressure you into accepting even a percentage of the total debt to be settled. This is how consumers lose money online.

If a company is collecting their fees in advance of the work being done -Red Flag!

If the company you choose doesn’t save you money, they simply don’t get paid.

3. Are you being paid commission?

If they say yes –Red Flag!

<!--[if gte vml 1]> http://www.neweradebtsolutions.com/images/14Question_checkMark.jpg" 'width:24pt;height:31.5pt;visibility:visible;mso-wrap-style:square'"> file:///C:\\\\DOCUME~1\\\\Barbara\\\\LOCALS~1\\\\Temp\\\\msohtmlclip1\\\\01\\\\clip_image002.jpg" o:title="14Question_checkMark"/>Debt settlement companies you research should involve people working for the firm who are not paid by commissions.

These people should be paid to give you honest answers and solutions regarding your debt situation.

4. Is there a money back guarantee if I change my mind?

5. If I have faithfully made my payments for one year and the company hasn’t settled any of my debt, how much money would I get back if I decided to quit?

If fees are based on a percentage of the debt and not tied to results, the company will probably refuse to make any refund of your fees –Red Flag!

6. How long have you been in the debt settlement business and how much debt has actually been settled?

If the company cannot provide proof of their experience – Red Flag!

<!--[if gte vml 1]> http://www.neweradebtsolutions.com/images/14Question_checkMark.jpg" 'width:24pt;height:31.5pt;visibility:visible;mso-wrap-style:square'"> file:///C:\\\\DOCUME~1\\\\Barbara\\\\LOCALS~1\\\\Temp\\\\msohtmlclip1\\\\01\\\\clip_image002.jpg" o:title="14Question_checkMark"/>Better debt settlement firms service their clients by a headquartered company (in parent form). You want to make certain that the parent company has been settling debt for at least 7 years and have settled more than one hundred million.

7. Can you stop my creditors from calling me?

<!--[if gte vml 1]> http://www.neweradebtsolutions.com/images/14Question_checkMark.jpg" 'width:24pt;height:31.5pt;visibility:visible;mso-wrap-style:square'"> file:///C:\\\\DOCUME~1\\\\Barbara\\\\LOCALS~1\\\\Temp\\\\msohtmlclip1\\\\01\\\\clip_image002.jpg" o:title="14Question_checkMark"/>The debt settlement company you choose should provide the services of Consumer Justice Group at no charge for help with abusive collectors.

8. Will you be making monthly payments to my creditors?

<!--[if gte vml 1]> http://www.neweradebtsolutions.com/images/14Question_flag.jpg" 'width:20.25pt;height:31.5pt;visibility:visible;mso-wrap-style:square'"> file:///C:\\\\DOCUME~1\\\\Barbara\\\\LOCALS~1\\\\Temp\\\\msohtmlclip1\\\\01\\\\clip_image001.jpg" o:title="14Question_flag"/>Settlement companies do not make monthly payments to your creditors. If they claim to do so or if they give you the impression that they do – Red Flag!

<!--[if gte vml 1]> http://www.neweradebtsolutions.com/images/14Question_checkMark.jpg" 'width:24pt;height:31.5pt;visibility:visible;mso-wrap-style:square'"> file:///C:\\\\DOCUME~1\\\\Barbara\\\\LOCALS~1\\\\Temp\\\\msohtmlclip1\\\\01\\\\clip_image002.jpg" o:title="14Question_checkMark"/>Creditors are not paid until after a mutually agreeable settlement is negotiated and approved.

9. Can I get sued?

<!--[if gte vml 1]> http://www.neweradebtsolutions.com/images/14Question_flag.jpg" 'width:20.25pt;height:31.5pt;visibility:visible;mso-wrap-style:square'"> file:///C:\\\\DOCUME~1\\\\Barbara\\\\LOCALS~1\\\\Temp\\\\msohtmlclip1\\\\01\\\\clip_image001.jpg" o:title="14Question_flag"/>The answer to this question is yes; it is a possibility. Many companies will try to brush this risk under the carpet by telling you that only in 1% of all cases will this happen. In truth, creditors are creditors and they are protected by the law. In court, consumers have no protection under law unless they hire a bankruptcy attorney.

If they say anything to the contrary – Red Flag!

<!--[if gte vml 1]> http://www.neweradebtsolutions.com/images/14Question_checkMark.jpg" 'width:24pt;height:31.5pt;visibility:visible;mso-wrap-style:square'"> file:///C:\\\\DOCUME~1\\\\Barbara\\\\LOCALS~1\\\\Temp\\\\msohtmlclip1\\\\01\\\\clip_image002.jpg" o:title="14Question_checkMark"/>Make certain that the company you choose will continue to negotiate a settlement even if a lawsuit is filed.

10. Will this have a negative effect on my credit report?

<!--[if gte vml 1]> http://www.neweradebtsolutions.com/images/14Question_flag.jpg" 'width:20.25pt;height:31.5pt;visibility:visible;mso-wrap-style:square'"> file:///C:\\\\DOCUME~1\\\\Barbara\\\\LOCALS~1\\\\Temp\\\\msohtmlclip1\\\\01\\\\clip_image001.jpg" o:title="14Question_flag"/>The answer to this question is yes. All debt management programs will have a negative impact on your credit report. Don't worry. For every problem.., there is a positive solution. You can repair any credit trouble. It takes time but it can be done.

If they say anything to the contrary – Red Flag!

<!--[if gte vml 1]> http://www.neweradebtsolutions.com/images/14Question_checkMark.jpg" 'width:24pt;height:31.5pt;visibility:visible;mso-wrap-style:square'"> file:///C:\\\\DOCUME~1\\\\Barbara\\\\LOCALS~1\\\\Temp\\\\msohtmlclip1\\\\01\\\\clip_image002.jpg" o:title="14Question_checkMark"/>Your number one concern should be to negotiate your debt as a primary goal, settling your debt as quickly and inexpensively as possible.

11. When can I expect my first settlement?

Any longer than 12 months – Red Flag!

<!--[if gte vml 1]> http://www.neweradebtsolutions.com/images/14Question_checkMark.jpg" 'width:24pt;height:31.5pt;visibility:visible;mso-wrap-style:square'"> file:///C:\\\\DOCUME~1\\\\Barbara\\\\LOCALS~1\\\\Temp\\\\msohtmlclip1\\\\01\\\\clip_image002.jpg" o:title="14Question_checkMark"/>The company you choose should be able to state that their clients begin seeing settlement offers in as little as 90 days, and sometimes even sooner.

12. Can you tell me exactly how much this will take and exactly how much this will cost?

<!--[if gte vml 1]> http://www.neweradebtsolutions.com/images/14Question_flag.jpg" 'width:20.25pt;height:31.5pt;visibility:visible;mso-wrap-style:square'"> file:///C:\\\\DOCUME~1\\\\Barbara\\\\LOCALS~1\\\\Temp\\\\msohtmlclip1\\\\01\\\\clip_image001.jpg" o:title="14Question_flag"/>Debt Settlement is not an exact science, and there are too many variables to quote exact time frames and figures. Many companies will tell you anything to get you in the door.

Any attempt to provide exact information would be a Red flag.

Your debt settlement company provides estimates only of time frames and costs. These estimates are based on current company averages.

13. Are there tax consequences I should be made aware of?

The answer is yes.

The debt amount forgiven may be a taxable event. This should be explained. Some companies will tell you that there is an I.R.S. form you can fill out to avert this kind of tax-related trouble. However, as consumers, you must make the final choice yourself. If you have any doubt, continue your research.

If not – Red Flag!

A savings of over $600 may or may not be taxable depending on your individual and unique situation.

14. Who is holding my money while I’m waiting on a settlement?

If the company tells you to save your own money or to send the funds to them – Red Flag!

15. Look for lawsuits (at Google) related to specific debt settlement companies, agencies and even attorneys. The best companies often work with regulators to prevent lawsuits from happening, and while no company is entirely perfect, look for a company that will be FTC (Federal Trade Commission) compliant.

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Restoring Your Credit Before You Go Live Online, Part 2