We ask what costs are involved in setting up a debt management plan and whether there are alternatives to paying these costs.
If you are thinking about using a debt management plan (DMP) to solve your debt problem then an important factor to consider is what costs will be involved.
If you want a debt management company to provide a DMP service for you they will normally ask you to pay two types of costs.
There will be an initial cost to set up the debt management plan for you and then you will have to pay an ongoing cost if you want the debt management company to run your DMP for you.
Most debt management companies will make an initial set up charge for putting your debt management plan in place.
This initial charge will cover preparing your income and expenditure statement with you and carrying out the negotiations with your creditors to reduce your monthly payments.
The cost of setting up your debt management plan will normally be equal to the first one or two payments that you pay into the plan.
In other words, the first one or two payments you make will not go to your creditors. They will be kept by the debt management company for the set up work that they do.
Once your debt management plan is up and running the debt management company will then start to charge and ongoing management fee.
The cost of this management fee will normally be around 17% of the amount you pay into your plan each month.
The fee is charged to cover the cost of managing the monthly payments to each of your creditors and any ongoing negotiations that are required to ensure your creditors freeze their interest charges.
The DMP management fee will be automatically deducted from the payment you make into your plan each month.
You need to understand that by paying this fee, not all of the money you pay into your debt management plan each month will go to your creditors and this will add to the overall time it take to repay your debt.
If you are concerned about the costs involved with setting up and running a debt management plan, there are some cost free alternatives you could consider.
The first thing you could look at is the possibility of setting up and managing a DMP yourself.
There is nothing to stop you negotiating a debt management plan with your creditors yourself and then managing the ongoing payments.
Alternatively you could pay a debt management company to set up the plan and then manage the ongoing payments yourself thus saving the ongoing management fee.
If you do not want to set up and manage your debt management plan yourself, you could consider using a free service. There are one or two organisations that will set up and manage a debt management plan for you for free
Many people decide to pay a debt management company to set up a DMP on their behalf rather than doing it themselves or using a free service. There are various different reasons for this.
You may feel that you do not have the time or the confidence to negotiate with your creditors yourself.
Using a reputable debt management company means you can be sure that any objections raised by your creditors will be dealt with and the company will do their best to get interest and charges stopped.
You may also want to be confident that the company you are working with focuses on your interests.
If you use a free debt management service there is always a question as to whether the company is working in your best interests as ultimately the DMP service is paid for by the creditors themselves.
As with all debt management solutions, the cost of a DMP is an important thing to think about when deciding if it is the right thing for you.
The key thing is to understand exactly what you will be charged and why. Then you can make a sensible decision about whether the DMP is the most suitable option for you.
James Falla is a debt management solutions expert and author. He has fourteen years of experience of implementing debt management plans for people who are struggling with personal debt.
In 2004 James co founded Thomas Charles a specialist debt management solutions company where he personally helped hundreds of clients implement debt management plans. James is now the managing director of and senior debt advisor for Wilmott Turner Financial Services which operates debt solution websites such as www.beatmydebt.com.
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I AM A DEBT COLLECTOR FOR A MAJOR COMPANY, BANKRUPTCY IS THERE FOR A REASON . IF YOU ARE FACING FORCLOSURE, REPOSSESIONS, CREDITORS FILIEING JUDGEMENTS, THERE HAS BEEN A SEVERE LOSS OF INCOME, OR YOU WILL NOT HAVE THE ABILITY TO EVER PAY YOUR DEBT BACK BASED UPON A REALISTIC OVERVEIW OF YOU CURRENT AND FUTURE FINANCIAL POSITION .. I RECCOMEND THAT YOU FILE .. AND START OVER. IT WILL TAKE SOME TIME BUT YOU CAN START OVER.
ALTERNATE METHOD. DONT GO THROUGH CONSUMER CREDIT COUNSELING. ALL YOUR MONEY NEEDS TO GO TO PAYING OFF YOUR DEBT NOT PAYING SOMEONE TO TELL YOU WHAT TO DO AND HAVING BAD FOLLOW UP WITH YOUR CREDITORS. I PERSONALLY THINK CONSUMER CREDIT COUNSELING IS A RACKETT.
ALL YOU NEED TO GET OUT OF DEBT IS MONEY. YOU NEED TO SAVE UP ENOUGH SO YOU CAN START MAKING DEALS WITH THE DEVIL.lol
START AT THE SMALLEST AND WORK YOUR WAY UP YOU CAN PROBABLY SETTLE ALL YOUR DEBT FOR ABOUT 40-50 CENTS ON THE DOLLAR
WHEN YOU ARE MAKING THESE DEALS BE CONFIDENT.
CALL THE COLLECTION OFFICES AT THE END OF THE MONTH THE VERY LAST DAY IF YOU CAN .THEY WILL BE PUSHING FOR THE URGENCIES ON A CLOSE AND WILL TAKE RIDICULOUS SETTLEMENTS.. I ONCE SETTLED A 123,000.00 NATIONAL CITY BOAT LOAN FOR 45,000 AT THE END OF THE MONTH.
WE WERE PUSHING FOR A GOOD CLOSE AND TOOK IT.
MAKE SURE BEFORE YOU PAY ANYTHING OUT YOU GET SETTLEMENT IN WRITING SIGNED AND DATED. HAVE THEM FAX THE OFFER TO YOU. BE WILLING TO SET UP CHECK BY PHONE OR PAY BY PHONE AT THE TIME YOU MAKE THE OFFER.
ALSO, STAY IN CONTACT WITH YOUR CREDITORS MAKE SURE THEY HAVE YOUR CORRECT ADDRESS AND PHONE #'S . ALWAYS STAY IN CONTROL OVER THE CONVERSATIONS DONT SOUND DESPERATE SCARED OR DOWN TRODDEN.. COMMUNICATE EFFECTIVELY TELL THEM THAT YOU ARE OFFERING 25% SETTLEMENTS TO ALL OF YOUR CREDITORS AND THE ONES WHO DONT TAKE THE OFFER WILL BE INCLUDED IN YOUR BANKRUPTCY. EXPLAIN TO THEM THAT YOU ARE TRYING TO DO THE RIGHT THING IN PAYING EVERONE THAT YOU OWE SOMETHING BECAUSE YOU FEEL THAT IT IS THE ETHICAL THING TO DO. BE SINCERE BUT BE FIRM. IF THEY DONT TAKE IT END THE CALL. .DONT ARGUE AND DONT LISTEN TO THE REBUTTLES ..
STICK TO YOUR GUNS.
TELL THEM U UNDERSTAND THEY CANT TAKE IT AT THIS TIME, BUT IF THEY WANT TO CHECK TO SEE IF IT CAN BE DONE ,THEY CAN GET BACK WITH YOU ..GIVE THEM A PHOME NUMBER. I ASSURE YOU THEY WILL CALL BACK WITH A COUNTER OFFER AROUND 30-40% ESPECIALLY AT THE END OF THE MONTH.
YOU MAY EVEN WANT TO PICK UP A SECOND JOB .. PUT ALL THE MONEY YOU MAKE INTO A SETTLEMENT ACCOUNT AND START NEGOTIATING.. YOU CAN GET OUT OF THIS WITHOUT FILING CHAPTER 7, BUT IT IS NOT EASY IT TAKES HARD WORK DELIGENCE AND DISCIPLINE… GOOD LUCK
Consolidating is a good idea. Most creditors (and their collection agencies) are willing to accept settlements, or a smaller portion of a debt that is owed.
Here's one idea: Apply for a loan with a company like CitiFinancial (a lender with more lenient credit terms than most banks) and use the money to pay off the remaining debt. Then pay the loan off using the money you were sending to the debt management company. Your delinquent debts are paid and you're building credit history at the same time. Good luck!
Note: Credit entries by creditors can be deleted once the debt is paid, IF YOU REQUEST IT. You don't have to let it sit on there for 7 years. Just remember to ask for a CBR delete and a settled in full letter once you pay the account off.
Dont do either option. You can do this yourself for free. Plus, there are many scam companies that simply take your money and ruin your credit. If you can't make the minimum payments, the accounts will go to collections (same thing if you pay someone else to handle this). Find books or do research online (even here) about settling debts and collection accounts. If you go against the advice given here, DO NOT use any company that has bad reviews online; they prey on people in trouble.
A good firm would be this one : http://debtreliefprogram.esuperfind.com/?ddh
They are an Experian company, if they take you on you are safe with them.
I don't know Cesi, sorry. But if in doubt, online scammers can be spotted immediately.
They are NEVER Verisign approved and they are NEVER BBB approved.
in other words, when on a site and not sure about it, look for a Verisign or BBB logo.
If found, click on them. If they lead to the Verisign and BBB sites and on those sites there is an entry about the site you are worried about, then they are legit.
If there is no working logo back to those or any other reputable Business Bureau sites then walk away.
See http://www.esuperfind.com/lowermybills.phpp?id=hra0tt16koo9 the affiliated site is an Experian company BBB approved so very safe.
They might or they might not have you on. It depends on many factors and how big the debt is.
Although it would be next to impossible to keep your cool, I'd suggest going to the VA office in person. That way, it's not just a voice on the phone that's easy to forget about and write off. If you're standing there, they can't ignore you and you might get some real answers and help.
It's rediculous that they withheld money without asking (or even informing) you. There are rent assistance places around here (montana) that help with rent when there are circumstances such as yours. Same with utilities. I'd check out and see if there are anything like those in your area.
you really need to speak to the C.A.B about these financial problems. Citizens advise will be able to give you free, and more importantly, sound advise. Debt management should be free in my opinion, and the scum that charge fees and promise everything but deliver nothing should be branded criminals.
Wishing you and your mum best wishes and a successful outcome. Good Luck
ok listen .. this is how i think its going to be according to the givin data
1st of all you have to know wat is required from ya is the roe which is = Rerutn / Equity
so we need to calculate the new return and the new equity
Return (Net Profit) = Ebit – Intrest expense – Taxes
1000000 – 200000 – (42% x 1000000)
= 380,000 now we got the new Return
Equity= as you know that the balacne sheet is totally balance
(Total Assets = Liab + Owner's Equity)
As Given in the question , Total Asset Turn over = 2
Total assets Turn over = Sales / Total Assets
since 2 = 10 000 000 / x then by a simple cross multiplication x = 5 000 000
Now that we got the value of the total assets = 5 000 000
Then we got the other side of the balance sheet equation which is Liab + Owner's Equity = 5 000 000
so if we knew that The Debt Ratio (liab / Total assets) = 40%
simply 40% x 5 000 000 = 2 000 000
Then the other 60% will be the equity = 3 000 000
now that we got the two required items to complete the equation
ROE = Return / Equity = 380 000 / 3 000 000 = 12.7%
well thats how i got it .. so i really hope that you got the benfit out of this and good luck
this made me feel ..later