Let’s Get You Some Debt Relief
Are you physically and emotionally exhausted? Tired, ashamed, and scared about what the future holds for you and your family. Life shouldn’t be like that, your children deserve better, and we know exactly how it feels when life has become a struggle. Although the name on the door says Pacific National Funding, we pride ourselves on being human. Life is never black and white, which is why our entire ethos is based around helping people.
In our experience, the majority of people got themselves into financial difficulty by trying to provide the best for their family. It is so difficult to look your little boy or girl in the eye and tell them that they cannot have the latest toy, birthday party or computer game. Everyone has been there, and as an organization, we understand that. But rather than criticize you or make you feel worse than you already do, we believe it is our role to find solutions. You are here today looking for help from the people who deal with these types of predicaments on a daily basis, and so that is precisely what we are going to do. We will work out the best solution for you by working together in partnership.
We will educate and empathize, laugh and cry with you, but make no mistake, at Pacific National Funding, we will be with you every step of the way. We know that for most breadwinners you are trying desperately to keep your head above water, in many cases you have not even told your partner the severity of the problem, because you want to protect him or her. Being in financial difficulty can be a very lonely and exhausting place, which is why we will put our arm around your shoulder and share the burden. You will be surprised at how quickly the stress of the situation reduces once you have talked it through and gained some clarity. Although it might seem that you have no options, there are five potential solutions available to you, which our team can and will explain in more depth. But to give you some hope for the future, let’s briefly look into them here.
Option 1
The Do It Yourself Option
Although we would love to help you through the process of getting out of debt, as a company of integrity we wanted to put it out there straight away, that you can do this all on your own, provided you have the discipline and structure to make a plan and stick to it. All of us suffer from weaknesses, whether that is the newest gadget, car, or vacation, but if you want to get out of debt, then things need to change. The first step is to stop adding to your debt; sit down with your partner and commit to the process of only spending money on essentials. In order to achieve this, you need to work out a weekly budget.
How To Create A Weekly Budget
If you were going to take a road trip from Los Angeles to Nashville, most people would invest in a map or a sat nav system to plan the route and guide them safely to their destination. This is common sense and excellent preparation. The problem with debt is that it creeps up on us, and in the majority of cases, it is due to poor financial habits established over many years. The first thing you need to do is break those bad habits and get a firm understanding of your financial situation. Start by creating a spreadsheet with five columns.
Income
The first column will be a list of all your forms of income. This could be salary, rental payments if you own a rental property and anything else which brings money into the family. Once you total all of these up, you know how much money you have to spend every month.
Creditors
This is where you list the name of the companies who you owe money to, be totally honest and list them all, as this is the only way that you can get a complete picture of the problem.
The Total Amount Owed
Honestly, this is where things can begin to be a little scary, and it can make for uncomfortable reading. All of those $30 here and $50 there quickly add up, but sometimes understanding the severity of the situation can provide you with the motivation to change.
The Minimum Payment
Every debt you owe will typically have a minimum payment, so list that down in the next column.
Payment Due Date
This helps with your monthly cash flow, and prevents you from spending money you don’t have because you had no idea another payment was due to come out of your account.
Probably for the very first time, you are now looking at the complete picture of your financial health. Do not panic, we have lots of help and advice to give you, but you needed to understand the situation before you can tackle it head-on.
If your monthly payments are higher than your incomings, then it is time to move forward to the next step, which involves calling your creditors to explain your current financial predicament. Do not begin this process, until you have all of the facts and figures on hand; you need to demonstrate that you are taking the issue seriously, and you will need to have documented proof to confirm everything you are telling them. If you can convince your debtors that you are genuinely suffering from financial hardship, then they may offer you a range of options to help with the problem. Always remember they want to get their money back, and it is generally easier to work with their own customer than to sell the debt to another company at a loss. There are four options that most creditors will consider
Interest Rate Reduction
Interest rates can make a drastic difference to your debt, particularly if you are paying anything about 15%. Many companies will offer to lower the rate of interest to something a little more manageable, perhaps as low as 12%, which not only saves you money but will also reduce the payments.
A Payment Holiday
Sometimes, all that is needed is a break from the repayments, time to catch your breath, and gather your thoughts. When the pressure is constantly on, you are forced to make decisions based on emotion, rather than logic, so a payment holiday, could be just what is required to let you concentrate on some of the other debts, and get things back on an even keel.
Convert Your Credit Card Debt To A Repayment Loan
Part of the problem with a credit card is that it is easy to carry on spending. By talking to the credit card company, you may be able to get the debt converted to a repayment loan. This would mean that the credit card is no longer valid, and you agree to set repayments over an agreed period of time. Once these payments are completed, then the debt would be gone, so this assists in the process of getting debt free.
Debt Settlement
This is an option where you negotiate the amount of debt you can afford to repay. In many cases, it will be less than the amount owed, but when done successfully, it can be an excellent way to clear your debt quickly.
The problem with trying to complete this process on your own is that this is not your area of expertise. At Pacific National Funding, we eat, sleep, and breath personal finance. We understand the processes, and how the credit card and other banking companies operate, which puts us and as a consequence, our clients, in a much stronger position. Although we would never try to talk you out of dealing with the situation yourself, we are confident that our expertise and knowledge will deliver much better results than most people would ever achieve on their own.
Option 2
Consumer Credit Counseling
If the thought of dealing with all of your creditors fills you with dread, then the next option could be to self-refer yourself to a consumer credit counseling service. The vast majority of these will provide you with between 45 and 60 minutes of counseling, where you can discuss your current financial situation. Most of these services are offered free of charge, so confirm that this is the case before enrolling. Search the internet to find companies who provide this service, and check their reviews before committing. During your consultation, the counselor will decide on the severity of your situation, and if he or she is concerned about it, he might suggest a debt management plan.
In essence, this option is very similar to the do it yourself option, except that the counselor will do the heavy lifting for you. Your counselor will work out how much you can afford to pay every month and then negotiate with your creditors to try and reach an agreement. Because they are not emotionally involved, and they understand the intricacies of the different financial companies, they are also more likely to be successful in agreeing on a repayment plan, although this is never guaranteed. The aim will be to get you lower payments, and this could be achieved by agreeing on a lower interest rate, or longer payment terms. If all, or at least a majority of your creditors agree to the debt management plan, then you would no longer pay them directly, you would pay the debt-counseling agency, who will then distribute the money on your behalf. Remember that the aim of all of these options is to become debt free, which may mean there will be certain hard decisions to be made, as part of the agreement.
In most cases, the agreement will take a minimum of five years to complete, which is a significant time obligation. In addition, be prepared to cancel all your credit cards and commit to not applying for any new credit until you have completed the plan. Although this might sound harsh, the idea is to break bad habits and instill good ones, but unfortunately nearly half of all debtors who sign up for a debt management plan fail to complete it. It is vital that you maintain the desire and determination to become debt free, there will always be temptation, and it will not be easy, but imagine how wonderful life would be if you had no debt in the world.
If you can manage to remain focused and stick to the plan, there are certain advantages. The most significant benefit is that you will be debt free upon completion of the plan, but it is also highly likely that your monthly payments will drop. Many companies will also cancel or waive any penalty charges and most of the fees. And one last benefit is that you will no longer have to deal with the stress and strain of being confronted by your creditors. Many people tell us that this makes such a difference to their lives, as they are no longer scared to answer the phone or open their mailbox.
Option 3
Embark On A Debt Consolidation Program
Debt consolidation is another option available to you, although it is not one that we would personally recommend. Debt consolidation works by basically consolidating your numerous debts into one manageable account. There is a range of benefits to this process, which includes only having the one payment, every month, and the opportunity to get rid of all your higher interest debts. The idea would be to take out a large loan at a comparatively low-interest rate and use that loan to pay off all your other debts. It also gets rid of the debt collectors, threatening phone calls, and the stress of dealing with debt collection agencies.
The problem with this concept is that you think you have made progress, but the reality is that all you have done is move the money from several companies to one provider. The overall amount of debt has remained the same, but your payments have dropped as a result. Many people who follow this method keep their credit cards open, and spend the extra money they have due to reduced payments, and within a few months their original credit card balances have risen once again, but in addition, they now have the consolidation loan to repay.
Thinking things through logically, there is a reason you are in your current financial predicament, and that is mainly down to bad habits. Taking out a consolidation loan is rarely a good option until you have totally kicked your spending habits and got your impulse buys firmly under control. At Pacific National Funding, we aim to set you up for success, which is why in our professional opinion a debt consolidation program is doomed for the majority of people from the second they sign on the dotted line.
Another negative consideration regarding this method is that many people who own their own home will end up getting a homeowner equity line of credit (HELOC), which is a secured loan. A secured loan means that your property is effectively used as collateral against the debt. Although the lower interest rates and payments may seem to be appealing, you are putting your home at risk, should you be unable to make the repayments. In our opinion, this is a risk that is simply not worth taking and one which we would recommend against wherever possible.
Another negative that people tend to forget when signing up for one of these types of loans is that although the payments and interest rates are lower, the total cost is much higher. This is because you will be repaying the debt over between 7 and even 30 years, so cumulatively the cost is much more severe.
Option 4
Debt Settlement
For some reason, debt settlement seems to cause a lot of confusion among many of the people we speak to, and it is essential to understand that it does take a lot of work, hundreds of phone calls and hours and hours of time, but in many cases, the ends do justify the means. The concept of debt settlement is straightforward; in essence, you are trying to negotiate with your creditors to settle the debt. The aim is to clear the debt, and in the process, you end up re-paying a lot less of the debt that you currently owe.
Why Would Your Creditors Agree To Debt Settlement?
The reason why this is often a lengthy process is that your creditors will not want to accept anything less than they are owed. However, if a significant life event has happened, such as an unexpected but severe medical condition, or being made unemployed, your creditors may decide that it is better to get as much money from you as possible, rather than getting none at all. This is where an understanding of the system, strong will, and determination come into play. Be prepared to phone your creditors on a daily basis, offer them a payment that you can afford in full and final payment. Never send your creditors any money unless you have a written confirmation that the payment you make is a full and final payment. Once you have made that payment then ensure that you store all of the agreements including the final payment confirmation securely so that if there is any dispute in the future, you have written proof from the company that the debt was paid.
Rather than embark on this long and stressful procedure yourself, it may be a good idea to hire an experienced debt settlement company, who will conduct the negotiations on your behalf. Bear in mind that your creditors are not just going to accept your word about a medical issue, or being made unemployed. They will want to see paperwork which demonstrates and verifies the fact that you are experiencing legitimate and severe financial problems.
In many instances, you might have to stop making payments to all of your creditors individually, and save everything you can into a separate savings account. Then at the end of the month, you contact one of your creditors and make them an offer of a full and final payment to clear their debt and close the account. This takes a lot of bravery and goes against everything most of us have been taught about paying our debts on time every time. However, for most people, their situation will be dire, and this option is preferable to that of filing for bankruptcy, which is the next step.
Although this is a better option than bankruptcy, it is important that you understand that any debt settlement program will severely impact your credit score, but if your ultimate aim is to get yourself out of debt, then this may not be a concern for you.
Option 5
Bankruptcy
For many people, this is the word that strikes fear into their hearts, but in certain situations, bankruptcy may be the best option. If you are in a position where you do not have enough income every month, to meet all of your financial commitments, and the likelihood is that this is a long term issue, rather than a short-term blip, then your final option is to file for bankruptcy. Although this is a scary option, many people have gone on to be very successful, having previously filed for bankruptcy. We like to think of bankruptcy as the opportunity to press the reset button on your finances, but bear in mind that it will have a significant impact on your credit score for many years to come. Most people will not be able to get any credit for at least three years following a bankruptcy, and when they do qualify, the interest rate will be very high. It is not just credit applications that will be affected, your car insurance will increase, and some landlords may refuse to rent you a house or apartment. The bankruptcy will show on your credit history for ten years, and in your personal file for the remainder of your life. Some employers will run a credit check on you before offering you a job, and there is a possibility that you could not be offered a job as a consequence of being declared bankrupt.
Are All Bankruptcies The Same?
There are main types of bankruptcy which apply to individuals a Chapter 7 and a Chapter 13 Bankruptcy.
Chapter 7
A Chapter 7 Bankruptcy is the scorched earth approach and is much more severe than a Chapter 13. It is classified as a liquidation bankruptcy, because the aim of this type of bankruptcy is to liquidate any and all of your current assets, with the intention of repaying your creditors. This could mean that you have to sell your home and vehicles, so it can be very severe and it does have serious implications.
Chapter 13
A Chapter 13 bankruptcy is still a significant and stressful procedure, but the concept at play here is to reorganize your finances rather than liquidate them. A Chapter 13 bankruptcy is different in that it’s called a reorganization bankruptcy. The goal of this type of bankruptcy is for you to re-organize your finances so that you can repay most of your creditors.
Not everyone will qualify for bankruptcy, and the process will take some time even if you do qualify. You will have to provide physical proof that you are incapable of repaying your debts. You have to undertake a credit counseling course, from an agency, which has been approved by the U.S Trustee’s office, and this must be completed within 180 days before you file for bankruptcy. Once you have successfully completed this course, you will be issued with a certificate of completion, and this must then be filed no later than 15 days after the date you filed for bankruptcy. You will also be required to work out a repayment plan with the agency and submit a copy of that with your papers.
As you can see, there are many options, and quite a few challenges and complications. You need to decide what is best for you, and if you are worried and concerned about the process, then it is probably a good option to work with a company that has experience and knowledge within the industry.
At Pacific National Funding, we are committed to helping you through the process. All of our staff are carefully chosen because they have the heart of a teacher and will work with you to find the perfect solution for your individual situation. We are confident that we are the best company to work with, and choosing us could be the best financial decision you have ever made.
We care for you, that's what we do.
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Are You Looking To Lower Your Debt?
Not everyone who applies for a loan from us is looking to purchase a car or finance a holiday. For some people who have many loans with stores, credit cards, and banks, a consolidation loan may be a much better solution. By combining all of your debt into one manageable payment, one payment date, and in many cases a better rate of interest, many of our customers save a lot of money in the process. This not only makes everything easier to manage on a daily basis, reduces your payments, but could save you significant money in the long term in interest payments alone. There is also a good chance that you could be debt free quicker allowing you to start planning for the future.
How to lower your debt? Easy.
A Simple Three-Step Process
Applying for your loan as with everything at Pacific National Funding is quick, straightforward and hassle-free. Everything is completed quickly using a tried and tested three-step process.
Calculate Your Rates
The process for obtaining your rate takes no longer than thirty seconds. Simply answer a few straightforward questions, and you will get a quotation returned within seconds. No more stress hassle, or worry. In fact, the biggest regret we get from our customers is that they wish they had discovered us earlier.
Agree and Accept the Terms
Once you have received your quotation, all that remains is for you to agree to and accept the terms and conditions. Once again this is all done electronically from the comfort of your own home or office. Believe it or not, that’s all the effort required on your behalf
Get Your Money the Next Day
In less than 24 hours your money will be deposited in your account, and then you are free to use it to do whatever you wish. Don’t waste any more time, fill in the form and start living your life to the fullest once again.
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