Akopia Consulting, LLC ™

Debt Negotiation - Repayment Options

Compare your debt reduction options. It is not uncommon for us to receive calls from consumers with twenty, fifty or even a hundred thousand dollars in credit card debt who are unable to make their payments any longer. They have fallen into the credit trap, getting further and further in debt until something comes along like an illness, loss of a job, or simply a downturn in the economy (something that has affected us all) that negatively impacts their income and their ability to pay, until they simply cannot service the debt any longer. Our debt negotiation program allows consumers to settle their debts with their creditors under terms more favorable to the consumer and gives them an easy to follow plan with manageable monthly payments that allow them to get back on track financially in a short amount of time.

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Avoid Debt Consolidation Loans

Debt consolidation loans are one of the most common traps people fall into when trying to solve their financial issues. Sadly, about 75% of those people who utilize a debt consolidation loan find themselves in much more grave financial trouble than they began with!

Why is this? Well, all a debt consolidation loan really does is transfer your debts. A debt consolidation loan does not reduce the amount of debt that you owe. You are still liable for the full amount of the debt plus interest. In most instances, a debt consolidation loan is a short term fix that will leave you in worse shape financially over the longer term.

Most debt consolidation loans are secured with some form of asset that you own. In essence, you are simply converting an unsecured debt into a secured debt and putting your assets at risk. This is great for your creditors but potentially devastating for you and your family. What if you continue to have financial difficulties in the future? If you fall behind on your payments, you are now open to losing the assets that secured the loan-most likely your home. Don't bet the house!"

In fact, most people get into even greater financial difficulty with debt consolidation loans because they find that they have a new line of spending power-empty credit cards! It is often not long before these accounts are again maxed out and now the consumer has both the consolidation loan and more maxed credit cards to pay off. Keep in mind that although a consolidation loan may give you a lower payment and some room to breathe in the short term, where is this situation going to leave you in 10 to 20 years time?

Debt consolidation loans are not a practical way out, but often a fatal step into even greater financial issues.

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Avoid Consumer Credit Counseling (CCC)

Many consumers mistakenly think that consumer credit counseling organizations are a good option.

Did you know that consumer credit counseling organizations were originally set up by VISA as a means of recovering a portion of the money from their thousands of clients who had fallen behind on their payments?

Now you know why credit card companies are so willing to work with these companies- many of these companies work for the creditor, not you!

Consumer credit counseling may allow you to reduce the interest rate on your debt and in some cases can lower your monthly payment. They may also be able to re-age the account and stop late fees and over limit charges as well. However, they are still not reducing the total amount you owe in any way. They work for the credit card companies, remember? Since these consumer credit counseling organizations essentially work for the creditors and not you, they are really just another form of collection agency.

In fact, many people who work with these organizations find that they end up paying higher monthly payments than the original minimum payments that they had been paying on their credit cards! This is the main reason for failure with consumer credit counseling programs. If a consumer is having problems making minimum payments now, how can they be expected to pay these even higher monthly payments and maintain those payments for many years? This is precisely why it is very rare that consumers successfully complete these programs in the time specified, usually 4 to 5 years.

It can often take up to three times the amount of time originally estimated to successfully complete these programs. Most consumers will be dropped somewhere along the way for not being able to keep up with their payments, only to have to start over again with a new consumer credit counseling program. This vicious cycle is clearly not in the best interests of the consumer, and is therefore not a viable option for most consumers struggling to manage their debts.

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Avoid Bankruptcy

Consumers today are filing bankruptcy in record numbers. Why? Sadly, due to the lack of education about alternative methods of helping consumers manage their debt burden, many consumers think bankruptcy is their only option.1 In fact, many people who file bankruptcy today owe as little as $5,000. A primary reason people are choosing this most unattractive path is the overwhelming and relentless pressure from overeager collectors trying to recover their money. Most organizations, such as consumer credit counseling organizations, actually suggest bankruptcy to people they are unable to help!

New laws have been passed that make it substantially harder to file bankruptcy to eliminate your debts. Commercial creditors have increased lobbying efforts seeking broad-sweeping bankruptcy reform. Each year since the mid 1990's, congressional favor for bankruptcy reform has flourished as these large financial organizations are estimated to have invested over $75 million dollars in so-called "educational programs' for lawmakers. These large institutions do not want you to have any options-they want you to be beholden to them, until your debt is paid in full, on their terms.

Even though bankruptcy can eliminate most of your debts, a bankruptcy filing will normally continue to appear on your credit report for up to 10 years after your debts are discharged. This will negatively affect your credit report and severely limit your financial options for years to come. Additionally, most people are not aware that bankruptcy will stay on your court records for 20 years and can haunt you for the rest of your life. For example, if you apply for a loan, a job, or insurance, one of the questions most commonly asked is "have you ever filed for bankruptcy?" As you can see, bankruptcy is not the answer that many make it out to be. In our opinion, bankruptcy is a poor choice for most consumer financial issues, with its negatives far outweighing any benefits.2

1 As with any financial or savings alternative, before making any decision you should consult with your legal and tax advisors. Akopia does not provide specific legal or accounting advice, and each consumer must determine the suitability of Akopia's programs for themselves. Individual results may vary and are contingent upon debt amount enrolled in program, savings schedule and complete of all program terms. Read and understand Program Agreement carefully before signing or sending any money.

2 Akopia does not engage in credit repair or restoration. As such, Akopia's program is offered to assist consumers in setting up a saving plan to address their unsecured obligations. Akopia's program is not offered to improve credit score, and in some cases, credit scores may decline during the program based on your own ability and choices relating to creditor obligations.