Knowledge Center Library

Debt Consolidation

Reduce Your Credit Card and Unsecured Debt

Debt consolidation and management is more about living and learning. In order to get the most out of life, understanding how to reduce your debt is the key. Provident Debt Solutions Knowledge Center Library is your guide to knowing why you're in debt and how to reduce your credit card and unsecured debt. Get started now and take back your life! Get a free debt consultation today by filling out the simple form to the right or calling Toll-Free 1-800-315-1444.

Is Ignoring Your Debt The Right Option?

No one likes paying bills, especially when the money just isn’t there.  Surely everyone, at one point or another, has contemplated simply throwing their bills away as a means of dealing with debt.  Ignoring your debt sounds great, and is the option that requires the least effort, but is it really a feasible solution?

Simply ignoring your debt could work if the statute of limitations has run out, or will run out soon. The statute of limitations is the maximum amount of time available to a lender, after the date of the last payment to be made on the loan, to pursue legal action against you to reclaim the debt. Statues of limitation vary by state.

If the statute of limitations has expired and your creditor has not sought to reclaim the debt, you may no longer legally required to repay it. However, the likelihood of this happening is slim to none. You should seek legal advice from a qualified attorney in your state.

Every contract is different, but some debts are referred to as being secure, which means that the amount you owe your creditor is “guaranteed” by collateral such as a house, car, jewelry, or other items. Ignoring your debt would result in the loss of personal property.

Due to the lengthy paperwork and red tape involved, many creditors typically do not want to deal with the hassle of seizing collateral. If forced to, however, they will. If your property is seized and the value of the item is less than the amount of money you owe, then you will still be held responsible for the remainder, compounding your loss.

In addition, creditors may also seek to garnish your wages and report delinquent payments to a credit bureau. This will not only shrink the amount of money you have coming in, but reduce your ability to borrow in the future. Not only is this embarrassing, but it may damage your relationship with your employer.

If you find yourself short on a payment, talk to your creditor about the possibility of making a partial payment or revising your payment plan. Often times, creditors are much more willing to work with you than start the complicated and costly process of legal action. If this is not possible, seek the advice of a credit counselor. Your debt has too many consequences to be ignored.

Tax Debt

Tax Relief: Settle Your Debt, Relieve Your Stress

Tax debt can be quite overwhelming, but during tax time, there is nothing sweeter than tax relief – a reduction in the amount of tax you have to pay to the IRS by way of offer in compromise.

Tax refund, tax deduction and tax credit are a few that rank right up there with tax relief.

But in the end, tax relief is what you’re looking for, because tax relief is a reduction in the amount of tax you have to pay. Remember, tax debt does not just disappear and there are only a few ways to get out of tax debt.

If, after you’ve filed your taxes, you find you owe the IRS money, the questions become:

Do I qualify for tax relief? If so, how do I get it?

There are programs available for special circumstances, such as natural disasters, but for the most part, tax relief falls into three classes:

•Innocent Spouse Relief
•Allocation of Liability
•Equitable Relief

The IRS has its own language when it comes to taxes. To make sure you get your fair share of what Uncle Sam has waiting for you, you have to understand just what the IRS is saying, and what it means to you.

You can learn the language of the IRS by going to its website, www.irs.gov, and studying it thoroughly, but in the end, you’re likely to leave as confused as you were when you started.

Bankruptcy

In the United States, there are two types of bankruptcy provisions for individuals: Chapter 7 and Chapter 13. Both fall under federal jurisdiction, which means these cases are filed in United States Bankruptcy Court, even though they generally are governed by state law.

Chapter 7 Bankruptcy

A straight bankruptcy or liquidation procedure in which a person is allowed to keep certain exempt property, however, some of your property will probably be sold/liquidated to pay down your debt.

What's the benefit?

•You retain most liens, such as real estate mortgages
•Security interests for car loans survive.
•Most if not all debt is erased.

Learn more about Chapter 7 Bankruptcy by going to the United States Government Courts website at www.uscourts.gov.

Chapter 13 Bankruptcy

A consumer reorganization or debt adjustment case in which a debtor (you) proposes to pay creditors over a three- to five-year period. This written plan details all transactions, and their durations, that will occur. Repayment must begin within 30 to 45 days after the case has started. During this period, creditors cannot attempt to collect on debt except through bankruptcy court. In general, the individual keeps the property, and creditors end up with less money than they are owed.

Learn more about the details concerning Chapter 13 Bankruptcy.

Bankruptcy isn’t always the best option to get out from under a massive debt load, so it’s wise to carefully weigh the pros and cons of bankruptcy before rushing into it.

Getting the advice of a bankruptcy specialist in usually your best option.

Take control of your finances by calling Provident Debt Solutions Toll Free at 1-800-315-1444 to speak with one of our friendly and knowledgeable Debt Consultants.