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How To Avoid A Bankruptcy Filing And Eliminate Credit Card Debt

Debt relief is a great opportunity to place all your credit card debt behind you financially without paying even the minimum amount due. Professional negotiators work very hard to obtain you the greatest savings possible on your debt. Whenever you are able to agree one of your smaller debts with the total owed on other larger ones, call you for approval and authorization to settle the balance. A debt relief expert in New Mexico can help you determine which settlement offers are the most beneficial to your situation.

When you begin the debt relief process, your first order of business is to stop making payments to your creditors. You will be instructed by the creditors to stop any communication and follow up correspondence with them until the negotiations have begun. You must follow this instruction and ignore any further contact from your creditors. Your goal is to minimize your financial exposure. If you do not get started soon, you may find that you are severely overextended and unable to continue making payments to your lenders.

Once you stop communicating with your creditors, the debt relief services will become more active in qualifying you for repayment plans with each of your individual creditors. Each month you will be notified of the status of your case and given a date by which you will have to file a tax return with the government. You will also be expected to create a monthly budget to reflect all your income and expense. You will be required to document all income and expenses on paper for your personal records. You will then receive a letter from your creditors that will outline the repayment plan that is in effect for you.

The repayment plan should be feasible for you and your family. Your debt relief service will discuss this matter with your creditors. In most cases, a debt relief plan that is too expensive will not be accepted by the financial institution that is having trouble with giving you a line of credit. They have been negotiating with you and will probably not agree to a settlement that involves you paying back less than you owe. A creditor who is not receiving a payment plan from their account will likely pursue collection efforts and then proceed with a chapter 7 bankruptcy filing.

If your creditors are unwilling to enter into a settlement, then you will need to consider enrolling in a debt relief program through an IRS approved charity. There are a number of nonprofit organizations that provide such services. You will need to obtain a form from the IRS that allows you to enroll in an IRS approved charity program. If the IRS is not willing to provide you with a copy of this form, it is essential that you seek legal counsel. Only a lawyer can provide you with a copy of the proper forms that must be provided with IRS debt relief services.

Once you have received the IRS form, your work is not done. Your debt relief counselor will need to gather all of your relevant financial information and work with you to create an individualized debt management plan. This plan will outline how much money you will pay to each of your creditors and how you plan on making payments to each of your creditors. With your counselor’s assistance, you will then be required to make one monthly payment to the debt relief service. Your debt management plan should be completed within a reasonable amount of time, as any late payments are not added to your debt and do not decrease the total amount of money that you owe.