Priority Financial Managment

DEBT MANAGEMENT OPTIONS :

   Priority Financial Management, LLC is an alternative to bankruptcy. We are not a collection agency or a credit counseling agency. We are a debt negotiation company specializing in reducing unsecured debt. As experienced lawyers have built relationships within their industry for maximized results, we too have built similar relationships with the top creditors, collection agencies and law firms in the financial industry. Our solid relationships with these creditors allow us guaranteed results when negotiating your debt settlement. Our Debt Negotiation program continues to be refined as we strengthen our established relationship with creditors. Nothing beats experience, and at Priority Financial Management, we have handled thousands of debt settlements. Have the peace of mind in knowing that your interest will be handled professionally.

   Are you struggling to make the minimum payments on your credit card balances? Is debt affecting other aspects of your life? Are you living paycheck to paycheck? Maybe you are receiving those annoying creditor calls at work, during dinner, or late at night. Or, maybe you are "robbing Peter to pay Paul" - constantly transferring balances in a fruitless attempt to stay ahead of rising interest rates. Due to some type of hardship (divorce, illness, layoff, business failure, reduction in hours or pay), you may have fallen behind in your bills. Are you considering bankruptcy? If any or all of these sound familiar then you most likely require relief through debt reduction.

   At Priority Financial Management, LLC we understand your situation and are here to help. We believe our debt settlement plan is the most powerful way to reduce unsecured debt while avoiding bankruptcy. What follows are the five most common debt management options: Continue to make minimum payments, credit counseling, home equity loans, debt arbitration (also known as debt settlement), and bankruptcy. Each debt management option has its strengths and weaknesses, depending on your particular situation.

Option1

Option2

Option3

Option4

Option5

Option 1

Continue to make minimum payments or pay nothing at all

Interest rates average over 15% and creditors can raise rates at any time.
By making minimum payments, you pay nearly 50% of your original balance in interest alone over the first 3 years and barely make a dent on your principal balance.
If your rates are 24% or higher, it is physically impossible to pay off your debt by making minimum payments.
If you only make minimum payments, you do not reduce your balances and therefore do not help lower your debt to income ratio.
There is no guarantee that your minimum payments will not increase as creditors maintain the right to raise interest rates at any time.
If you stop the minimum payments and do nothing, you will destroy your credit while not eliminating any debt in the process.

Option 2

Credit Counseling

Credit Counseling companies are typically funded by the same creditors that you owe.
Credit Counseling is like another form of "collections" as they charge interest and fees and disburse your payments directly to your creditors.
Credit Counseling conveniently consolidates your bills into one monthly payment.
It will typically take 5-6 years to pay down debt in a Credit Counseling program.
You will pay nearly 25% of your original balance in interest alone over the first 3 years.
Credit Counseling companies have pre-negotiated interest rates with your creditors. These rates may be higher, lower, or the same as your current rates.
In Credit Counseling, you will repay the full balance plus interest to your creditors.
Credit Counseling companies charge both a set-up fee and monthly fee, often called a "donation". Monthly fees may range from $20-$50.
You remain current with your creditors while in Credit Counseling as long as the credit counseling company pays your creditors correctly and on time.
While Credit Counseling will not have a negative affect on your FICO score, it will usually lead to "Credit Counseling", "CC", or "Credit Management" marks on your credit report. These marks are not viewed positively by lenders.
Many mortgage lenders view Credit Counseling as being on par with bankruptcy.

Option 3

Consolidation Loan or Home Equity Loan

To secure home equity loans or consolidation loans, you must first qualify.
Home equity loans require ownership of Real Estate property or a pledge of collateral.
Home equity loans reduce the future equity available in your property.
If you qualify, you can use home equity loans to eliminate your credit card balances.
Rates on home equity loans are typically much lower than credit card interest rates.
You will probably be required to pay a transaction fee upon closing the home equity loan. This fee is paid upfront or built into the interest rates.
Missing payments on home equity loans may cause you to lose the real estate or collateral you pledged, often your home.
You will still repay the full amount of your credit card balances.
By paying credit cards with home equity loans, you exchange unsecured debts for a secured debt.
Home equity loans should not have a negative affect on your FICO score although they do not lower your debt to income ratio until you repay the home equity loan itself.

Option 4

Debt Settlement (Negotiation)

Also known as debt arbitration, debt settlement is the process of negotiating lump settlements on your unsecured debt.
The debt settlement firm negotiates down your whole principal balance, irrespective of the interest and finance charges creditors try to add on your account.
Debt arbitratiors are independent companies not affiliated with your creditors.
Debt settlement companies charge fees but may finance the fees over time.
Your debt is paid off in anywhere from three months to three years depending on your cash availability.
While in debt arbitration, payments are not made to your creditors. This results in an 'open delinquency' on your credit until the debts are settled.
Debt arbitration is not a positive on your credit and may adversely affect your FICO score.
Debt arbitration lowers your debt to income ratio more quickly than any other debt reduction option outside of bankruptcy. Debt to income ratio is a significant factor used by lenders to qualify you for a loan.
With debt settlement, you will typically repay 40-60% of your current debt balances.

Option 5

Bankruptcy Chapter 7 or Chapter 13

Bankruptcy has a severe negative impact on your credit rating for 7-10 years.
Bankruptcy may cost $1,000 or more to file, not including attorney fees.· Bankruptcy may have a negative impact on your employment status.
In Chapter 13 bankruptcy, you may still repay 25-75% of your debt.
Chapter 7 bankruptcy will eliminate all of your unsecured debt.
Bankruptcy will prevent most creditors from attempting to collect your debts.
Bankruptcy hurts your FICO score and may result in higher interest rates on future loans.
Bankruptcy carries a negative stigma, mental stress, and other burdens.
Bankruptcy should be avoided if at all possible.