Latest news with #debtors
Yahoo
31-05-2025
- Business
- Yahoo
How to choose the right debt settlement company for you
Debt settlement requires you to pay a lump sum to creditors for less than you owe and have the remaining balance forgiven. To choose the right debt settlement company, compare the cost, eligibility requirements and reputation of each company. There may be other options for relief, including debt management or consolidation. You might have seen ads promising that you can settle your debt for much less than you owe. If you have a lot of debt with accompanying and persistent collection calls, you might wonder if these companies can provide the debt relief options they promise. To an extent, they can. Debt settlement companies can be a solution to freeing yourself from debt. But finding a reliable, trustworthy agency goes beyond calling the 800 number in the ads or even doing a quick internet search. Before you choose a debt relief company, you should determine if it's the right solution for your situation, then research legitimate companies with agreeable terms. What is debt settlement? Debt settlement is the act of negotiating with creditors and lenders to accept a lump sum payment lower than what is owed and forgive the rest. Debt settlement companies differ in their terms, plans, requirements and even their legitimacy. Consider these factors when choosing a company to work with. Debt-settlement companies earn revenue by charging fees equal to a percentage of the initial or settled debt — typically between 15 and 25 percent. Possible additional costs might include account setup fees and monthly service expenses. These costs could pose an additional burden if you're already struggling financially. A legitimate debt relief company can't legally ask for upfront payment, so any such request is a red flag. Ask for a breakdown of anticipated costs and fees before signing the dotted line. You might not owe enough to work with some debt relief companies. These firms obtain the majority of their revenues on a percentage of existing or settled debt, so you'll need to have a minimum amount to make it worth their while. The generally quoted debt requirement is at least $10,000, though some debt-relief companies can go as low as $7,500. Debt relief scams are prevalent in the finance industry, so it's important to be on guard. Sure signs of a scam are a company that: Contacts you first. Has repeated complaints of fraud, poor customer service or failed results. Uses aggressive sales tactics or over-promises. Another way to determine if a debt relief company is legit is to check how long it has been in business. If that company has been in business for several years, chances are it isn't a 'fly-by-night' firm with dishonest aims. Along those lines, the Federal Trade Commission has a database of banned debt relief companies that are essentially prohibited from offering debt settlement services. Another way to determine reputability is with accreditation. Membership in and accreditation by the American Association for Debt Resolution — formerly the American Fair Credit Council — isn't essential for debt relief agencies. It does, however, lend a level of credibility to the company. AADR members are held to strict operating standards and are audited regularly to ensure they follow regulations. As an added protection, be sure you're working with an accredited debt settlement counselor rather than a salesperson. A counselor certified by the International Association of Professional Debt Arbitrators (IAPDA) can generate trust that the individual will support your best interests rather than doing it for the commission. Additionally, some states require that debt settlement counselors be IAPDA-certified. During the research process, be sure to explore the following with any company you consider: Length of time in business. How much debt the company helped settle. Whether commissions are involved — if the answer is 'yes,' you could be dealing with salespeople rather than accredited debt counselors. The debt settlement process and estimated time frame. While you're asking these questions, be wary if you run across these red flags: The company claims it can settle your entire debt for a promised percentage reduction. The company touts a 'new government program' to get rid of your credit card debt. The company issues an iron-clad guarantee that it can cancel your debt. The company claims it can stop all debt collection calls or lawsuits. The company says it can pay off your unsecured debts for pennies on the dollar. If any debt settlement company makes promises that seem too good to be true, they probably are. When to consider debt settlement Debt settlement may be a good option when: The debt is unsecured. You're already behind on payments. You've tried other methods, like debt management or consolidation. You're okay with settling between 10% and 50% of your debt. Your only other option is bankruptcy. You get a windfall that could pay a lot, but not all, of your debt in one lump sum. Debt settlement comes with risks. Because you're asked to stop making payments as part of the debt settlement plan, your credit score may drop significantly and you may continue to get debt collection calls and threats. According to Andy Manthei, Change Cultivator at GreenPath Financial Wellness, creditors may take legal action and the debt settlement may show up in your credit report. He also warns that the IRS may see the forgiven debt amount as income, which you'll be taxed on. If possible, consider these options first. Debt management programs help you lower your monthly payment through actions like interest rate reduction and debt consolidation, and are created and managed by credit counseling agencies or nonprofits. Instead of paying creditors, you pay the agency or organization and they make the payment on your behalf. According to Manthei, debt management can drop your monthly payment by hundreds of dollars, while also decreasing the payoff timeline, total interest paid and total cost. If the various debts, payments and interest rates are overwhelming, consider consolidating your debts into a 0 percent balance transfer card or debt consolidation loan. Doing so will create one debt with one interest rate and monthly payment, making it easier and potentially faster to pay down your debt. Use a debt consolidation calculator to see if this option makes sense for you and get an idea of what your payment would look like. Get in touch with creditors or lenders directly, explain your situation and ask if you can work out a plan that includes reasonable monthly payments. Creditors may already have a preset plan for when life happens, which may include certain hardship programs, late-fee pauses and rate reductions. 'Some creditors, depending on the level of hardship, may even go to 0% [interest],' Manthei says. Those late-night ads might paint debt settlement companies as the answer to your woes. But before you make the call, carefully examine the background of the advertised company. If you're having severe financial difficulty and can't pay what you owe, debt settlement companies can be a solution. The above tips for choosing a debt relief company can help you find one that's reputable and trustworthy. This, in turn, can help alleviate the stress connected to seemingly insurmountable debt so you can work toward a fresh financial start. Remember, too, that it isn't the only option. According to Manthei, borrowers should try to avoid tunnel vision, take a step back to see the broader picture and see that there are options. Do a little research to understand the differences and find the best route. Most importantly, says Manthei, 'know you are not alone and it's going to be ok.' Sign in to access your portfolio
Zawya
26-05-2025
- Politics
- Zawya
Kuwait exempts three categories from Debtors Imprisonment Law
KUWAIT CITY - The Enforcement General Department at the Ministry of Justice has specified three categories of individuals exempted from the provisions of the Debtors Imprisonment Law. These categories are student stipends, rent allowances paid by the government to some citizens, and social assistance disbursed by the Ministry of Social Affairs. The department emphasized that these benefits granted by the State to some individuals will not be seized if those receiving them are in debt. Meanwhile, sources confirmed to the newspaper that the department continues to hold meetings to develop mechanisms for implementing arrest and summons against debtors, taking into account the humanitarian and social aspects of some categories of debtors. Sources said the department's meetings concluded that the law will be implemented in the best possible manner, 'without prejudice to the rights of creditors,' while taking into account the humanitarian and living conditions of some categories of debtors. They pointed out that the legal amendments aim to prevent defaults on debt and fines, given the large percentage of people who, despite their financial ability, delay paying their children's monthly expenses after separation from their mothers without justification. The new law aims to rectify these conditions and oblige debtors to fulfill their financial obligations, not evade them.
The Sun
20-05-2025
- Business
- The Sun
Thousands urged to look out for letters about £90 refunds following major debt rule change
THOUSANDS have been urged to claim £90 refunds after a major debt rule change last year. Almost 4,000 people who took out Debt Relief Orders (DRO) before April 2024 are owed cash. 1 Previously, anyone taking a DRO out had to pay a £90 fee, but this was scrapped in April 2024. However, the Insolvency Service has found around 5,000 people who took one out before this date and since 2016 didn't finish the application process and are owed the £90 back. The agency has written to the cohort due a refund with around 1,000 having responded and receiving the money they're owed. But there are still roughly 4,000 who have not and need to apply to get their hands on the £90. The first batch of letters to those eligible for a refund was sent around two months ago, with another round being posted "in the coming days". It is understood some people may receive emails telling them they're eligible for the refund as well. Caroline Shanahan, senior leader in the Personal Insolvency Team at the Insolvency Service, said: "In some cases, people may have changed their email address or moved home, meaning we do not have their current details to contact them. "Those people can still apply for a refund if they paid towards a debt relief order that was not submitted, they just need to get in touch and let us know." If you are due a refund, you should email You can request the £90 payment to be paid directly into your bank or building society account or via cheque. Four methods you can use to clear debt You must include the following details in your email to the Insolvency Service: Debt Relief Order application number (if known) Your name Your address Your telephone number Bank/building society Name Account name (as shown on bank statement) Bank account number (full 8 numbers) Bank sort code (full 6 numbers) Building Society roll number (if applicable) If your contact details have changed since making the DRO application, include your previous name and address alongside your current details. If a charity or third party paid for the DRO on your behalf, provide the details of the organisation that made it. How to cut the cost of your debt IF you're in large amounts of debt it can be really worrying. Here are some tips from Citizens Advice on how you can take action. Check your bank balance on a regular basis - knowing your spending patterns is the first step to managing your money Work out your budget - by writing down your income and taking away your essential bills such as food and transport If you have money left over, plan in advance what else you'll spend or save. If you don't, look at ways to cut your costs Pay off more than the minimum - If you've got credit card debts aim to pay off more than the minimum amount on your credit card each month to bring down your bill quicker Pay your most expensive credit card sooner - If you have more than one credit card and can't pay them off in full each month, prioritise the most expensive card (the one with the highest interest rate) Prioritise your debts - If you've got several debts and you can't afford to pay them all it's important to prioritise them Your rent, mortgage, council tax and energy bills should be paid first because the consequences can be more serious if you don't pay Get advice - If you're struggling to pay your debts month after month it's important you get advice as soon as possible, before they build up even further Groups like Citizens Advice and National Debtline can help you prioritise and negotiate with your creditors to offer you more affordable repayment plans You can also write to the Insolvency Service with any questions at: The Insolvency Service DRO Team, C/O Met Office, Fitzroy Road, Exeter, EX1 3PB. What is a Debt Relief Order (DRO)? A DRO freezes your debts for 12 months and bans creditors from contacting you about any money owed during that window - known as a moratorium. If there is no improvement in your financial situation after 12 months, the debt is wiped completely. You qualify for a DRO if you have debt worth less than £50,000 but won't be eligible if you have assets worth more than £2,000, or a car or motorbike worth £4,000 or more. You also must have £75 a month or less spare income after paying for bills and other essentials. You can use a DRO for the following debts: credit cards, overdrafts and loans arrears with rent*, utility bills, telephone bills, council tax and income tax benefits overpayments hire purchase or conditional sale agreements buy now - pay later agreements bills for services like vets or solicitors debts you owe to friends and family business debts You can't use a DRO to pay off the following debts: magistrates court fines and confiscation orders relating to criminal activity child support and maintenance student loans social fund loans compensation for death and injury You can also only apply for a DRO if you have lived in England or Wales for the last three years and have not taken one out in the last six years. However, you may still qualify if you submitted a request for a DRO in the last six years but it was cancelled. You can apply for a DRO through an approved debt adviser which you can find via the Government's website. If you live in Scotland or Northern Ireland you won't qualify for a DRO, but should speak to a debt adviser about what to do. You also can't take out a DRO if you have an IVA in place or if you're going through bankruptcy. Bear in mind that if you do take out a DRO, it stays on your credit file for up to six years after the date it was approved. This can make it harder to get approved for loans, credit cards and even a mortgage. Meanwhile, if your circumstances change, such as you receiving a pay rise, the DRO may be cancelled. .
CBS News
07-05-2025
- Business
- CBS News
Want to have your debts forgiven? Here's what will (and won't) qualify
We may receive commissions from some links to products on this page. Promotions are subject to availability and retailer terms. Debt forgiveness can offer big relief in the right circumstances, but it won't help with all types of debt. Getty Images Whether it's sky-high credit card balances, expensive medical bills, high-rate personal loans or lingering student loans, carrying costly debt has become a common thread for households across the country. According to the latest Federal Reserve data, total household debt hit a new record high of $18.04 trillion in the fourth quarter of 2024. And, that uptick in total debt coincided with an increase in delinquent credit card and auto loan payments, both of which are indicators of how difficult it is for Americans to keep up with their debts in today's inflationary environment. If you're one of the many who are struggling right now, you may be exploring your options, like debt forgiveness, to find relief. When you pursue debt forgiveness, the goal is to work with your creditors to try and settle the debt for less than what you currently owe. That, in turn, can provide some serious relief, helping you get your finances back on track. But here's the thing: Not all debts are created equal when it comes to forgiveness. While certain types of debt can be reduced and partially forgiven, others are excluded. So, before you sign on the dotted line for a debt forgiveness program, you need to know what debts might actually be eligible for forgiveness and which ones you'll still be stuck with. Below, we'll detail what qualifies — and what doesn't — if you're trying to have your debt forgiven. Get started with the debt forgiveness process today. What types of debts qualify for debt forgiveness? Several types of debts qualify for debt forgiveness, including: Credit card debt: Credit card debt is one of the most commonly forgiven types of debt, so if you're carrying a hefty card balance that you can no longer afford, this debt relief option could be smart to pursue. In many cases, you may even be able to reduce your credit card debt by 30% to 50% by offering a lump-sum settlement to the creditor. However, you typically need to be significantly behind on your payments and be experiencing serious financial hardship before a creditor will consider reducing what you owe. Medical debt: Medical bills can be a major source of financial stress, but fortunately, these types of debts are often eligible for forgiveness. Many hospitals offer financial assistance programs that can reduce or eliminate bills based on income and need. Medical debt is also a common target for debt collectors, so like credit card debt, it can often be settled for less than the full balance by negotiating on your own or with the help of a debt relief company. Private student loans (in certain cases): Some borrowers with private student loans may qualify for partial forgiveness through debt settlement. This usually requires showing that repayment is not feasible due to long-term financial hardship, but as with other types of debt, lenders aren't required to forgive any portion of private student loans, so outcomes vary widely. If you go this route, working with a debt relief professional who understands the private loan landscape can help improve your chances of a successful outcome. Unsecured personal loans: Like credit card debt, unsecured personal loans, which are loans not tied to collateral like a car or house, may be eligible for forgiveness through debt settlement. If the lender believes you're unable to pay the full amount, they may agree to take a reduced balance to recover at least part of the debt. This is more common when the loan is already in collections or severely delinquent. Learn more about your debt relief options now. What types of debt won't qualify for debt forgiveness? And, these are the debts that typically won't qualify for forgiveness: Federal student loans: Federal student loans don't typically qualify for settlement programs, but they generally have their separate channels, like income-driven repayment plans or Public Service Loan Forgiveness. If you're not eligible for those types of forgiveness or reduced repayment options, you'll be expected to repay the full student loan debt. Tax debt (unless you qualify for an IRS program): Tax debt owed to the IRS or your state can be extremely difficult to get rid of through traditional debt forgiveness. That said, the IRS does offer programs like Offer in Compromise (OIC), which allows you to settle for less than you owe if you can prove serious financial hardship. These programs can be complex to navigate, though, and approval isn't guaranteed. Many people will need professional help during the process. Child support and alimony: Debts related to court-ordered child support or alimony payments are not eligible for forgiveness, either. These are legal obligations, and failing to pay them can result in wage garnishment and even jail time in some cases. If you're struggling with these payments, your only option is to go through the legal system to request a modification. Secured debt like mortgages and car loans: If you fall behind on a mortgage or auto loan, the lender has the right to repossess the asset (your home or car). These loans are backed by collateral, so lenders have more security and less incentive to forgive the debt. In some rare situations, such as a short sale or a voluntary surrender of a vehicle, you might be able to negotiate a reduced deficiency balance, but true forgiveness is rare. The bottom line Debt forgiveness can be a powerful tool if you're overwhelmed with unsecured debts like credit card balances or medical bills, but it doesn't apply to everything. Understanding which debts you can realistically reduce or eliminate can help you avoid wasted time and frustration. If you're unsure where to start or which options you qualify for, it may be worth speaking with a debt relief expert. The more informed you are about what will (and won't) qualify for forgiveness, the better your chances of building a clear path out of debt.
Arab Times
15-03-2025
- Business
- Arab Times
Donation Drive for Debt Relief Collects 400,000 Dinars on First Day
KUWAIT CITY, March 15: The Ministry announced that the third national campaign to collect donations for paying off the debts of indebted individuals raised nearly 400,000 dinars on its first day, with contributions from 5,740 donors. The campaign, which will run for a month, emphasizes a revised donation collection mechanism compared to previous initiatives. This effort aligns with the directives of the political leadership to mobilize all available resources and promote the values of social solidarity. It also seeks to localize charitable work by engaging individuals, charitable organizations, government entities, and private institutions in developing sustainable solutions to address various humanitarian crises. The campaign aims to provide financial and social rehabilitation to debtors by offering them the necessary support and assistance. Those seeking help can submit their requests through the central platform for charitable work and donations, accessible via links dedicated to charitable societies or through the donation link (
