Lower, Eliminate & Pay Off Unsecured Credit Card Debt Free Help

Services to Reduce Debt

We believe that FDR's "New Deal" is the best solution for most consumers. If you would like to learn more about services that reduce your debt, feel free to contact one of our friendly debt consultants for a free consultation at
(877) 274-1260

Credit Counseling

In credit counseling, a client can have their interest rates reduced and be debt free in 5 years. You send your monthly payment into the credit counseling firm, and they distribute that payment to your creditors.

Advantages:
	Save money versus paying minimum monthly payments on high interest credit cards
	Can eliminate some late charges and over the limit fees
	One simple monthly payment

Disadvantages:
	If you’re concerned with a lower monthly payment, credit counseling typically offers minimal if any relief.
	Total cost in credit counseling is typically 3 times the cost of FDR’s “New Deal” program
	Length of program is typically 2 years longer than FDR’s “New Deal” program
	A high percentage of consumers drop out of credit counseling programs because they are difficult to manage
	Most credit counseling firms are funded by your creditors, which gives them the incentive to make you pay as much as possible

Debt Consolidation

Home Equity Loan

With a home equity loan, or second mortgage, a consumer borrows money against the equity in their home and repays it in equal monthly payments for a set period of time.

Advantages:
	One simple monthly payment
	Typically a home equity loan offers lower interest rates

Disadvantages:
	Monthly payment may still be too high for some consumers
	If your loan is secured (you signed over collateral), you could lose your home or car if you default
	May not qualify if a) you’re asking for a lot of money; b) your credit history has negative marks, especially in the 6 months prior to applying for the loan; and/or c) you don’t have enough equity in the property the bank wants to secure the loan with.

Unsecured Debt Consolidation Loan

A debt consolidation loan is one of the most common solutions used by consumers suffering from overwhelming debt burdens. With a debt consolidation loan, a bank pays off some or all of the debts owed by a consumer and in turn the consumer pays back the bank with interest.

Advantages:
	One simple monthly payment

Disadvantages:
	The interest is typically extremely high
	Lenders interpret these loans as a sign of being overextended (see the first sentence of this section if you’re wondering why)

Bankruptcy - Chapter 7

In a Chapter 7 bankruptcy, you ask the court to erase your debts completely. In exchange you must turn over all your non-exempt property (or its equivalent in cash) to a court-appointed trustee, who in turn sells your property to pay back your unsecured creditors.

Advantages:
	All collections activities must cease once upon filing
	If your wages are being garnished, bankruptcy can stop it
	If you have no assets (or exempt property), then you don’t have to pay anything to become debt free.
	Can remove some liens from your property
	Provides debtor with a fresh start

Disadvantages:
	Extremely intrusive and unpleasant experience---the bankruptcy trustee must approve almost every financial transaction you make while the case is open, which can be several months
	Impacts your credit for up to 10 years, stays on court records for 20 years
	Private employers have the right to refuse employment to anyone who has ever filed bankruptcy
	Emotionally depressing, sense of guilt and failure associated with bankruptcy (this shouldn’t be the case, especially since most bankruptcies are the result of unexpected financial hardship, not month long shopping sprees).
	In October of 2005, Congress changed the bankruptcy laws, making fewer consumers eligible for Chapter 7
	Believe it or not, in cases where a person has assets that can be liquidated by the bankruptcy trustee, some consumers can save more money by enrolling in FDR’s “New Deal” program.
	Despite popular belief, you cannot get rid of student loans or back taxes in a Chapter 7 bankruptcy (unless you meet very specific requirements)

Bankruptcy - Chapter 13

In a Chapter 13 bankruptcy, you set up a court approved plan to repay your debts. Under the plan, the court determines your monthly disposable income, which you must pledge to a court appointed trustee , who in turn distributes it to your creditors for up to 5 years.

Advantages:
	If you’ve fallen behind on car, mortgage payments, taxes, and student loans you can pay back those missed payments throughout the plan.
	Like a Chapter 7, all collections activities must cease after you file a Chapter 13 bankruptcy.
	One simple monthly payment

Disadvantages:
	Impacts your credit for 7 years, stays in court records for 20 years
	It’s still considered a bankruptcy by future employers, lenders, ect.
	Required to pay back a good portion of your debt plus interest and the trustee’s monthly fee, which often times makes it more expensive than FDR’s “New Deal” program
	What the court deems “disposable income” can be very strict. If you pay more on your rent or mortgage than the average person in your county, you could be trouble. (Ironically, this is the solution that the courts push on higher income individuals).
	Paying all of your disposable income for 5 years can be extremely difficult----roughly 50% of all Chapter 13 bankruptcies are never completed.

Credit Card Monthly Payment

Advantages:
	If you’re expecting a significant increase in income, a big tax refund, the sale of some valuable property, or a winning lottery ticket, then paying the minimums can buy you some time before you finally able to pay off the debt.
	Preserves your positive credit history, which makes up 35% of your credit score

Disadvantages:
	You can lose your job or get sick, the real estate market could crash, which leaves you with only one option---bankruptcy.
	If you can only pay the minimums, it’s probably a sign that you owe too much; amount owed accounts for 30% of your credit score.
	It’s the most expensive route by far. If you owe $30,000 in credit card debt, then it could be 20-30 years and over $100,000 before you’re finally debt free.
	If you’re late on even one payment, then your interest rates could jump up to as high as 32%.
	Highly stressful and unhealthy to have to worry about being able to make the minimum payment every month.