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August 15, 2017

Unsecured Debt & Credit (All You Need to Know in a Quick Guide)

The Ultimate Guide On "Unsecured Debt" - Learn how to increase your income by thousands of dollars each year -- by using credit cards!

Unsecured debt and credit cards can be used as powerful tools to transform one’s finances and increase a person’s income. This guide will protect you from making the same mistakes that I made when I was young.


Most people associate unsecured debt with stress and frustration, but it doesn’t have to be that way. In fact, unsecured debt and credit cards can bring great joy to your life. You are about to learn the true definition of “unsecured debt” and how to use it in the most beneficial ways.


Are you looking to get out of debt? Have negative marks on your credit report that you want off?


Perhaps you are trying to get your first credit card or even looking to increase your credit score.


Whatever the case is, all the answers you’ve been searching for that are related to “unsecured debt”, can be found in this comprehensive guide. (SEE TABLE OF CONTENTS BELOW)


You will even learn how to use unsecured credit cards to earn thousands of dollars of additional income every year (Tax-Free) — it’s all inside this exclusive guide!


And NO gimmicks,  just basic finance 101.

The Ultimate Guide On "Unsecured Debt" - Learn how to increase your income by thousands of dollars each year -- by using credit cards!


If we missed answering a question, please do let us know about it in the comments section below.


Paul J Paquin, the author of this post, is Certified and Accredited by the International Association for Professional Debt Arbitrators (IAPDA) and the Association for Student Loan Relief (AFSLR).


But even more importantly, the bulk of insights inside this guide came from Paul’s 15-years of experience at Golden Financial Services as the CEO…


Ready to get started?


…Delay no further!


Unsecured Debt Guide


What is Unsecured Debt?


An unsecured debt is one that doesn’t have collateral attached to it.


The information on your credit report and credit score are the factors that determine if you are eligible for “unsecured credit.”


If you have a high credit score creditors are likely to issue you an unsecured loan.


If you have a low credit score with derogatory information on your credit report such as late or collection marks, to get approved for a credit card or loan, creditors may require collateral such as your car or home to be part of the agreement.


If you don’t make your monthly payment on a secured debt, the creditor can legally take whatever asset you put up as collateral.


If you have an unsecured loan and stop making your monthly payments on it, the creditor cannot take any of your assets, including your home or vehicle, so your property is protected; — unless they first bring you to court, sue you, and win (winning is getting a default judgment).


An exception to this rule is with a federal student loan.


With Federal Student Loans (Wages Can Be Garnished)


Federal student loans are considered to be unsecured debts. However; if you fall behind on your federal student loan payments, the Department of Education can garnish up to 15% of your disposable income — without having to take you to court.


You can call this “excessive use of government power.” Shame on the government for taking advantage of their power!


Fortunately, for students who fell behind on their student loan payments — outstanding income-based student loan relief options are available in 2017.


Here is information on private student loan relief options and here is how to get assistance with federal student loans.


Need Student Loan Forgiveness? (See Step-by-Step Instructions)




An unsecured debt can be your — worst enemy or best friend.


The good news is…you get to pick – shall I make unsecured debt my friend or enemy?


Your social security number connects you to an “unsecured debt,” much like a pair of “invisible handcuffs” — making sure you don’t get away unpunished. Your credit will take a beating if you fail to pay your monthly bills on time.


On the other side of the coin…


…Your social security number can act as your “bodyguard,” making sure you get paid for good work – meaning, your credit score goes up with good payment history!


Unsecured Debt Examples

— credit cards

— private and federal student loans

— unsecured bank loans

— medical bills

— a repossessed car; after it gets sold at the auction — that remaining balance is an unsecured debt (we will explain more on this subject in the chapter called “Is a car loan unsecured debt?”)

— cell-phone bill that went to collection

— utility bills that went to collection


What is an Unsecured Credit Card Debt?


To understand what an unsecured credit card is, let’s first talk about an secured credit card.


When a person gets their first credit card, often they start with a secured credit card because it’s easier to get approved for, since you are putting up collateral. Unless you use “The Piggyback Trick to Hack a High Credit Score in Under a Year,” which I wrote about here


But for most people…


…Your first credit card will be a secured credit card, where the bank guarantees the card with cash.


So, if you get a secured credit card with a $500 credit limit — you must give the bank $500 to guarantee that your credit card bill will get paid.


Therefore; when you get an unsecured credit card, you are not required to put up collateral or even show that you have the funds in your checking or savings account.


You get the unsecured credit card by signing a piece of paper. Keep in mind; that piece of paper includes your social security number and signature agreeing to certain terms. If you are late on even one monthly payment, fees will be added onto your balance and your credit report will be negatively impacted.


Rick Sorrentino, a Credit Expert and Senior Account Executive at Golden Financial Services says it best;


“If you aren’t using credit to make money, you are using it wrong & should call it exactly what it is…debt! Creditors won’t call it a “debt card” or state what your “debt limit” is because psychologically credit sounds so much better, but the fact is, when you’re dealing with the effects, you know you’re dealing with DEBT!


What is the Meaning of an Unsecured Loan?


A loan is a “credit” — money that can be used to purchase items.


A debt is a bill – a balance that you must pay.




Mike has a $5,000 credit card debt that he needs to pay off by the end of this week. (this is a debt)


Mike received a $5,000 loan from Bank of America that will be used to fix his car. (this is a loan)


See the difference?


An unsecured loan is a loan that has no collateral attached to it.


Any lending institution may offer an unsecured loan, not just the banks.


You are at risk of ruining your credit if you go into default (fall behind) on your loan’s monthly payments.


On the other side of the coin, you have an opportunity to improve your credit score if you pay all your monthly payments before the “due date”.


Unsecured loans can be an excellent tool, for increasing a person’s credit score.


Unsecured Debt Consolidation Loans


Debt consolidation loans are another type of unsecured loan. Debt consolidation loans are used to save money by lowering interest rates.


You get a low-interest loan to pay off debts that have high-interest rates, leaving you with one low-interest loan to payback.


If you are on the urge of falling behind on an unsecured credit card or loan payment, it is imperative for you to take action immediately and get on either a debt relief or consolidation program. Bad credit can cost you more than your car or home is worth.


Talk To A Debt Counselor For Help (866)-376-9846


Pros and Cons of Unsecured Debt:


Pro: An unsecured loan has a shorter repayment term.


Pro: An unsecured credit card can raise your credit score faster than a secured credit card.


Pro: An unsecured loan doesn’t put an asset at risk of being taken.


Cons: An unsecured loan comes with a higher interest rate.


Cons: An unsecured loan is harder to get approved for.


Cons: An unsecured loan offers no tax benefits.


Cons: The amount that can be borrowed, with an unsecured loan is lower than a secured loan.


What is a Secured Debt?


A secured debt is one that allows the lender, bank or credit card company — to take your asset if you stop making the agreed upon monthly payments. An asset can be your car or property.


What is a Secured Credit Card?


A secured credit card is used to establish credit.


Anyone can get a secured credit card by putting up collateral, even if you have bad credit.


Collateral, in this case, is “cash” (security deposit).


The bank will put your security deposit into an individual account that they control.


This guarantees that if you fail to make your monthly payments, the bank can just take your cash to get reimbursed.


You would then lose the money (your security deposit), and your credit report would be negatively affected.


Falling behind on a secured credit card payment is probably one of the worst mistakes that young people make.


Some issuers will keep your security deposit in an interest-bearing account. For example, USAA will keep the money in a 2-year COD (Certificate of Deposit) that earns interest at a variable rate.”


Types of Secured Debt

A. Mortgage

B. Car payment

C. Home equity line of credit

D. Business loans that “are guaranteed” by your company’s “accounts receivable” (AKA: money that your customers pay you)

E. Bank or financial company loans that require collateral, including certain Payday loans

F. If we are missing any, please let us know in the “comments section” below.


Unsecured vs Secured Debt 


Positive for Secured Debt: — Tax benefits! — Example one: You can deduct the interest from your federal taxes that you pay on your mortgage and home equity loan payments.


Positive for Secured Debt: — A home equity line of credit is a secured debt. Home equity lines of credit have the lowest interest rate and offer the lowest monthly payment term, compared to any other type of loan.


Need a low-interest (6% or Less) debt consolidation loan?


And, you can even use it to pay off whatever type of debt you want — secured or unsecured debt!


Here’s how to get it…but first look at this statistic from “The Simple Dollar”:


“In mid-January 2016, the national average interest rate for a $30,000 fixed-interest home equity loan was hovering a bit over 5%.”


Yes, you guessed it right! — Use a fixed-interest home equity loan to pay off all your other high-interest debts.


There’s your answer. 


Most people I’ve spoken to over the years think that a home equity line of credit is only for fixing up their home, but they’re mistaken.


You can get a 5% home equity line of credit and use it to pay off all your other high-interest debts – then have only one low-interest home equity line of credit to pay back.


Positive for Secured Debt: — You are guaranteed to get a secured credit card — just put up the cash — the bank and credit card company will approve you.


Positive for Secured Debt: — Lower interest rates are on secured debts, such as your home and car loans — because creditors see you as a “low-risk” — since they have a guarantee of payment.


Negative for Secured Debt: — After filing Chapter 7 bankruptcy, your secured debts still need to get paid-off if you want to keep the property.


Negative for Secured Debt: — If you fall behind on monthly payments you will get hit double — 1st your credit takes a hit, and 2nd your collateral is taken.


Positive for Unsecured Debt: — It can have more of a positive influence on your credit score. Your positive payment history on an unsecured credit card will increase your credit score faster than a secured credit card.


Positive for Unsecured Debt: — At least the creditor can’t take your property or car if you lose your job and stop making the monthly payments.


Positive for Unsecured Debt: — Unsecured debt gets dismissed in a Chapter 7 bankruptcy, so you don’t have to pay it.


What is the Difference Between a Secured and Unsecured Debt?


If you have a low credit score, creditors may require collateral before approving you for a loan or credit card. Your vehicle or house can be used as collateral.


If you have “OK credit” (Above 600 Credit Score), most credit card companies will approve you for an unsecured credit card.


However; if your credit score is under 650, and you get approved for an unsecured loan or credit card — you can count on a “low credit limit” and “high interest.”


It is important to shop around before applying for an unsecured loan of any type. Carefully read the contract and compare rates, fees and terms.


How to Use Unsecured Debt to Get Hundreds of Thousands of Dollars in Available Credit — Learn How to HACK High Credit Limits!


Let’s start from scratch…


If you are new to the world of credit, here’s what you want to do…


Start with a secured credit card.


There are credit cards available, that pay you 2% cash back on every purchase you make. Go to CreditCards.com and find the best credit card for your lifestyle.


Put up $1,000 as your collateral, guaranteeing that you get approved for a $1,000 credit limit.


Use your secured credit card whenever you need to purchase gas and groceries so that you can get paid cash back on each purchase. And if you get the right card — you can get paid back a certain percentage of what you spend on all purchases.


Unfortunately, secured cards do have more restrictions than unsecured credit cards, but still — shop around — find a secured credit card that pays you best, and has no annual fees. Eventually, this secured card will be switched to an unsecured card, and you may have it for the rest of your life.


Use Unsecured Credit Cards To Earn Thousands of Dollars Per Year (Tax-Free) & Increase Your Income

The Ultimate Guide On "Unsecured Debt" - Learn how to increase your income by thousands of dollars each year -- by using credit cards!


Instead of using a debit card and paying the full price on purchases, use your credit card for all purchases and get 2% cash back.


That means — every month your credit card company will deposit money into your bank account. It’s extra income!


The best part about cash-back on credit cards is that it’s “tax-free”.


At BankRate.com they explain that; “The IRS thinks of the rewards as a discount on the purchase rather than some kind of gain in income or wealth.”


Therefore, take your time when selecting a credit card. Some cards pay you 1% on only certain purchases, while other cards may pay you 2% on all purchases.


The more you use your credit card and pay the balance in full, the faster your credit score and credit limit will rise. Don’t wait until your statement balance arrives, pay the balance in full before your statement even comes.


If you pay your balance in full twice per month, instead of just one time per month – you will show more usage, and you will establish better payment history in a quicker time-frame.


Don’t just pay the statement balance — pay the pending balance as well, so that there is no balance left.


Yes! — We are about to “HACK” – high credit limits.


After nine months of using your secured credit card every month, and paying your balance in full two times per month — your credit score will have rose by over 40 points.


Now is the right time to request for; A. the credit card company to switch your “secured card” to an “unsecured card” and, B. to raise the limit from $1,000 to $2,500.


Make sure to tell the credit card company to only run your credit one time, for both requests, to avoid getting two negative inquiries on your credit report which will bring your credit score down.


Your creditor will approve both requests because you just finished using your card every month and paid the balance in full two-times per month for the last nine months — proving that you are “credit-worthy”.


It appears you’ve had perfect payment history for 18-months in a row — that’s 18 payments you’ve made over the last nine months, by paying your balance two times each month.


Get it?


At this point, the credit card company will approve your request. If not, let them know you will be switching to another credit card company if they don’t approve your request; – They won’t let you go – you’re a good client to them!


Now immediately start using your 1st unsecured credit card to pay for all your purchases each month, and paying the balance in full two times per month as you’ve been doing for the last nine months.


Remember, you won’t pay any interest if you pay the balance in full as we are instructing you to do.


After three months of using your first unsecured credit card and paying its balance in full two times per month; at that point – you’re ready to contact another credit card company and get your second unsecured credit card.


At the one-year mark… now get that second credit card.


It’s been one year of perfect usage and payment history between your secured and now unsecured credit card — and again it’s appearing as two years of excellent usage and payment history on your credit card because you’ve been making double payments each month.


Remember to carefully research all the credit card companies and their offers, before selecting one.


In my early years, I didn’t know about cash back, interest and reward points.


I wish I did.


To this day, I still have my very first credit card (a Walmart card), that offers me nothing for using it. It is a useless card, but I’m stuck with it, because if I close it my credit score will go down, so I decided to just live with it.


Don’t make the same mistake I made.


We go over how to select the right credit card in the next chapter.


When you apply for your second unsecured credit card, request a $2,000 limit from the start. Any credit card company or bank should approve it, you’ve already established credit, finally, over the last 12 months.


Follow the cycle, use and pay the balance in full two times per month. After nine months of using, and paying your second credit card twice per month as instructed in this book, and of course continuing to do the same on your first card as well – now request to increase your limit from $2,000 to $5,000 on the second card.


The credit card company will approve it. So far, it’s been one year and nine months of following this process.


Once they raise your limit on the second credit card, from $2,000 to $5,000 – just continue the process, using your card every month and paying the balance, not one, but two times per month in full.


Try to alternate which card you use each time you go to the store. Or, have a diverse range of cards that offer you different benefits, depending on your lifestyle and where you spend money.


At the two-year mark, get a 3rd credit card. Again, start with a $2,000 limit. Use the card every month. And continue using your other credit cards – every month. You are paying your balance in full – at least two times every single month on each card.


This exact process continues until you have five credit cards. By the time, you have five credit cards and have followed this path exactly as I am instructing you to do – Your Credit Score Should Be Above 800 At This Point!


After you have five credit cards, stop applying for new cards and just focus on these five.


Every three months request a credit limit increase of $5,000 on one of your cards, whichever card is next in line.


Every three months alternate the card you are getting the credit limit increase on.


You are gaining $25,000 in available credit each year by following this system.


Before you know it, you’ll have $150,000 in available credit.


That’s only a credit limit of $30,000 on each card.


Depending on your income, some creditors may start rejecting your request for an increase due to insufficient income.


The other reason you may get rejected for an increase would be due to your spending history. The creditor may see that you never spend more than 10% of your credit limit, so they will reject your request for a credit limit increase, thinking that you don’t need it.


Therefore, if you get the opportunity to make large purchases on your credit card, go for it – just make sure to pay the balance in full immediately. Show the credit card company that you do need a high credit limit and can afford it.


If you get rejected for a credit limit increase, you can alternate to another card and try for an increase, but if you get rejected twice in a row, stop!


Stop and analyze your entire situation from income to your credit report. Figure out the problem, and fix it.


You may just need to enhance your income. So, at that point, learn new ways to increase your income.


The next chapter is extremely vital for you to read.


Unsecured Credit Cards – Don’t Just Get Any Credit Card, That’s a Big Mistake!


Always select the right credit card. Don’t just go to the bank and apply for anything.


I made that mistake when I was young, on my first credit card. The card paid no interest and offered absolutely no rewards. It’s a waste of money; I could have a card that is paying me every month if I knew better at the time.


There are credit cards available these days that offer 2% – 3% cash back on all purchases. And then traveling cards that offer free flights, and discounts on hotels.


Shop around before getting a credit card; you need to get the credit card that pays you the most. Match the benefits, to your lifestyle. What card will save you the most money? If you travel every month, you will need a credit card that offers benefits related to traveling.

Unsecured Credit Cards for Business – Use Your Business to HACK High Credit Limits


Unsecured Credit Cards for Business – Use Your Business to HACK High Credit Limits


Get a credit card that will be utilized for your business only, but make sure to verify that the credit card company will report your payment history to the credit reporting agencies. Often, a business credit card will not be reported to the credit reporting agencies.


A business credit card that does report your payment history on your credit, these are the best — because you’re using your credit card each day on high business expenses and then your business reimburses you so that you can pay the bill right off.


You are using your business expenses to help build a high credit limit. That’s smart. Just talk to an account and make sure you are not commingling business and personal funds, that’s illegal.


Here’s a personal story of mine, related to my high-school best friend…


I am very impressed with how he hacked a super high credit limit.


Good job John!


Every month John posts pictures on Facebook of his luxury vacations all over the world, staying at hotels like the Ritz Carlton and the most expensive hotels.


The truth is – John does not pay a “single cent” for these vacations. He hacks free flights and free luxury hotels.


Thanks to — “American Express.”


Here’s how he does it…


John owns a wedding business.


Someone will plan a wedding through him. Instead of making his client pay the expenses directly like most business’s do; — John pays for all the wedding expenses on his credit cards.


On average, John spends $50,000 to setup a wedding.


John pays for the ballroom in the hotel, the catering service at the restaurant, the hotel rooms and all the decorations.


The client who is having the wedding then reimburses John – John then takes the money and immediately pays the balances in full on his credit cards.


If John spends $50,000 on a wedding, he gets 3% cash back on that. Just by using his credit card to pay for his client’s wedding, John earns an extra $1,500 — that’s free money.


He can use the points for free hotel and vacation packages. Or, he can elect for the 3% cash back and make $1,500.


Now that’s smart.


He’s only 38 years old and has $250,000 in available credit.


Is a Credit Card Secured or Unsecured Debt?


Credit cards can be secured and unsecured.


Anyone can get a secured credit card. Put up the cash, and you’re guaranteed to get approved. A secured credit card can be used as a tool to establish and grow your credit score, but your goal should be to switch to an unsecured credit card as soon as possible.


An unsecured credit card offers many benefits. The biggest advantage of an unsecured credit card is that it gives you more weight towards increasing your credit score if you use it the right way.


The idea is to get an unsecured credit card and over the years raise the limit to be as high as you can get it.


As you increase your credit limit on an unsecured credit card, your credit score goes up. Take a look at this guide on how to raise your credit score quickly — by using an unsecured credit card.


Are Hospital Bills Considered Unsecured Debt?


Yes, medical bills are unsecured.


Are Student Loans Considered Unsecured Debt?


Yes, student loans are considered unsecured.


Is a Car Loan Unsecured Debt?


A car loan is a secured debt. However; it could turn into an unsecured debt.


Here’s how… If you stop paying your monthly car payments, the car will get repossessed.


The creditor who gave you the financing for the vehicle comes and takes the car back (repossesses it).


The vehicle is then sold at an auction, and whatever amount the bank can’t recover becomes the deficiency that you now owe.


The deficiency is an unsecured debt.


A creditor can sue you for the deficiency, so it’s imperative to work with them in resolving it or contact a debt relief company like Golden Financial Services.

What is Senior Unsecured Debt?


If your business files for bankruptcy its assets will be sold to pay-off the company’s debts. After filing for bankruptcy, the “senior debts” are the “priority debts” that must get paid first, and then next the “junior” debts get paid, etc…


Unsecured Debt Relief Programs


Eligible Accounts Include:


Consumer Credit Counseling to Resolve Unsecured Credit Cards:


A consumer credit counseling program is specifically for unsecured credit card debt, no other types of unsecured debts qualify.


A consumer credit counseling company will consolidate all your payments into one monthly payment.


This is not a loan.


The company negotiates with all your creditors for a lower interest rate. Most credit card companies will work with a non-profit consumer credit counseling company.


Interest rates on credit cards can be reduced from over 20% down to 8%-12% (average).


You then make one monthly payment to the company, and they disperse the funds to each credit card company but at the reduced interest rate.


To find out what your monthly payment could be on a consumer credit counseling program, use this debt calculator to get a quick quote.


On average, a person will have all their credit card balances “paid in full” within 5-years on a consumer credit counseling program, versus, 7-10 years when paying minimum payments on their own.


Consumer credit counseling can be an excellent way to get out of debt faster than if you continue paying minimum payments on your own due to interest rates getting reduced.


To learn more about consumer credit counseling, you can see a detailed summary here;– along with a full explanation of all credit card relief programs.

Debt Validation for Unsecured Debt Collection Accounts:


Debt validation forces a debt collection company to prove the debt is yours, that you haven’t paid it, and that they are authorized to collect on it.


There are laws such as the Credit Card Act of 2009 and the Fair Debt Collection Practices Act, and several other laws that can be used to challenge a debt – laws that creditors and debt collection companies must abide by.


Some laws specifically regulate the original creditor, like Chase, including the Credit Card Act of 2009; and other laws regulate only a third-party debt collection company such as the Fair Debt Collection Practices Act (FDCPA).


If a creditor violates a person’s legal rights, that person can be entitled to monetary rewards after they sue the creditor and win.


Knowing that credit card companies will dismiss a debt in some cases, trying to avoid getting sued and being in the spotlight.


Debt collection companies will cease collection on a debt and remove any negative marks that they reported on a person’s credit report after they fail to verify and validate a debt.


People don’t usually challenge a debt, or try to sue their creditors.


However; in many cases, credit card companies do violate people’s rights. And even more so, when a debt is with a third-party debt collection company.


A person could sue a debt collection company or even their original creditor and win if they had the right type of representation.


A person can also challenge a debt collection company in writing, by sending a debt validation letter to the debt collection company. You can ask for proof or verification of anything that the law requires a debt collection company to maintain.


First get familiar with the laws, and then request whatever items you want to request. You can request multiple items in one debt validation letter. The Fair Debt Collection Practices Act is a good – first law to learn and use in your debt validation request.


Here is a debt validation example letter:


A simple debt validation letter template -- to dispute a debt.

Fill in your details and use this letter to dispute a debt.


Talk To A Debt Counselor For Help (866)-376-9846


What if the debt collection company can’t validate a debt?


If a debt collection company can’t provide the documentation verifying the legally required information you requested in writing, they must stop collecting on the debt and cannot legally report anything on your credit report.


Before you settle a third-party debt collection account, make sure the debt collection company can validate the debt. It’s shocking to see how many times they can’t.


Even if you did incur the debt and it’s yours, still use debt validation to challenge it, you’d be foolish not to! — because what if the debt collection company is corrupt and has neglected to abide by laws, and is operating illegally like they often are? Is that your fault?


Make sure that before you pay a third-party debt collection account, including private student loans and credit card debt, that you first use debt validation to challenge its validity.


Contact Golden Financial Services for a Free Debt Relief & Validation Quote at 1-866-376-9846.


If a debt collection company can’t validate a debt — you may not have to pay it.


On a debt validation program, if a debt gets successfully disputed, you would only pay the debt relief company a fee for their services.


Additionally; the debt collector can no longer legally report the debt on your credit report.


Example of Debt Validation Proving a Debt to be “Legally Uncollectible” (Original Creditor: Citibank) & Getting the Debt Removed From the Consumer’s Credit Report

Unsecured debt can be disputed. If the debt collection company can't prove it's validity then they must stop collection on it immediately and remove any information reported to the credit reporting agencies.


Debt Validation’s entire concept is like when a person hires an attorney to get a speeding ticket dismissed, but debt validation deals with unsecured debt.


It’s much easier to find violations and inaccuracies when dealing with credit card debt collection companies, compared to a police officer.


Firstly, there are more laws regulating debt collection companies.


Secondly, a debt will get transferred around; from the original creditor to a third-party debt collection company — catapulting the chances of material being lost, mistakes occurring and flawed documents.


Thirdly, the debt loses more than 50% of its value after getting sold to a debt collection company, increasing the likeliness of carelessness.


Debt Validation Technicalities — “Get a Debt Dismissed” Vs. “Proving it to be Legally Uncollectible”


In some cases; debt gets dismissed, but this requires legal representation such as an attorney to be involved.


Without legal representation, a person can still prove their debt to be legally uncollectiblea “legally uncollectible” debt is one that you may not have to pay.


The technicalities behind both options are really the only difference.


From an outside perspective, both results appear to be the same.


A debt validation program can be the least expensive way to resolve a debt and get it off your credit report, preferred over any other type of program.


Debt Settlement is for Most Unsecured Debts:


A debt settlement service can drastically reduce the balance on an unsecured debt, sometimes to as low as 30-40 cents on the dollar.



A debt settlement program can lower the balances on your unsecured debts. Once your creditor agrees to reduce the balance, at that point, the reduced balance must be paid in one-lump-payment.


Hypothetically speaking, let’s say; — you stopped paying on a credit card that had a $3,200 balance. Six months later the bank writes the debt-off and sells it to a debt collection company. Now the balance is up to $4,216 (with the fees and interest added in).


A $4,216 debt can be reduced and settled at $1,475. (Click here to see this debt settlement example — it’s from an actual client of ours)


After the $1,475 (1-time, lump-sum payment) gets paid to your creditor — the balance gets reported: “paid in full.”


The downside of a debt settlement program is that your credit report is still paying the price having negative marks on your credit report for up to seven years. In some cases, the creditor agrees to have the negative marks come off your credit once they receive the settlement.


A debt settlement program allows you to settle multiple debts inside of one program.


A debt settlement program gives you one affordable monthly payment to take care of all your debt. Almost any type of unsecured debt qualifies on a debt settlement program.


Clients’ become debt-free within 42 months, on average, with debt settlement services.


Some creditors are more likely to sue a person once they stop making their monthly payments, such as Discover. At Golden Financial Services we try to keep Discover out of the debt settlement program and instead put Discover on an attorney program that comes with legal protection.


Talk To An IAPDA Certified Counselor For Help (866)-376-9846


Unsecured Federal Student Loan Debt Relief Programs


Student loan consolidation programs are the most efficient solutions for federal student loan debts. They are government programs.


When a person consolidates federal student loans — they are getting a loan and paying off all their existing student loans — then left with one loan to pay back.


There are outstanding repayment plans also available, allowing students to get a small monthly payment on their new consolidated loan if they don’t have sufficient income.


A student’s new monthly payment on a consolidated student loan can be close to “zero dollars per month.”


Always try to get a federal student loan, over a private student loan. The interest rates are lower on these types of unsecured loans, and more repayment plans are available for students experiencing any type of financial difficulties.


Student Gets a ($0 Per Month Payment) — After Consolidating: (See Example Letter)

Federal student loans are preferred over unsecured private student loans due to the interest rates typically being lower and the flexible repayment plans that are available if you have a financial hardship.


However, student loan consolidation programs are extremely confusing and require maintenance each year. When trying to sign up for a consolidation loan, one wrong click can cost a student thousands of dollars.


If you forget to recertify the next year — bam, you are kicked out and back to square one. If you forget to submit certain information, you may be told your last twelve payments didn’t even get attributed towards your loan forgiveness.


It’s like filing your taxes, and it can be worth the fee to hire an accountant.


There are seven government programs available.


If you need a low payment on your consolidated loan, these programs are your best options, out of the seven programs.

Talk To A Student Loan Relief (AFSLR) Certified Counselor For Help (866)-376-9846


Can Bankruptcy Wipe Away Unsecured Debt?


If you can’t afford a debt relief program, your last option would be bankruptcy. Bankruptcy has the worst effect on a person’s credit report when compared to any other debt relief option. It’s close to impossible to have good credit with a bankruptcy on your credit report.


Chapter 7 bankruptcy can wipe away your unsecured debts. You can literally walk away from your debt obligations without paying a dime, besides for your attorneys’ fees. Yes, it’s true.


Chapter 13 bankruptcy is similar to a consumer credit counseling program — you repay at least half of your unsecured debt, based on what your income allows. Chapter 13 bankruptcy plans last for around 5-years, just like a consumer credit counseling program, but bankruptcy does much more damage to your credit report.


Here’s the problem…


…Due to strict bankruptcy laws, it’s extremely difficult to qualify for Chapter 7 bankruptcy (the preferred option for bankruptcy). The judge looks at your income and compares it to the median income of a family of the same size in your state. Each state is different, and Chapter 7 bankruptcies are based on the median income in your state, these are not national guidelines.


Your income must be below your state’s median income per household to qualify for Chapter 7 bankruptcy.


Chapter 7 Bankruptcy – Income Eligibility Chart

If your income is less than your state's median income per household, that means your income qualifies for Chapter 7 bankruptcy. This type of bankruptcy can wipe away all of your unsecured debts so that you don't have to pay a dime.

How to find a reputable company to help with unsecured debts?


Obviously, I am a bit biased towards Golden Financial Services, since I am the CEO at Golden Financial Services.


Having said that…


These are practical ways to find a reputable debt relief company.


You can search on the Better Business Bureau (BBB) website for a reputable debt relief company (at BBB.org). You are in good hands if a company has no complaints, over five-years in business and an A+ BBB rating.


You can also check a company’s online reviews. Yelp and Trusted Company Reviews (TCR) are excellent places to find unbiased client reviews. People are quick to make online complaints, so you can count on finding out the truth by just doing a few Google searches.


Talk To A Debt Counselor For Help (866)-376-9846


About the author — Paul Paquin:


Paul J Paquin is Certified with the International Association of Professional Debt Arbitrators (IAPDA) and the Association for Student Loan Relief where he has received extensive training on unsecured debt relief options.


The programs offered at Golden Financial Services include debt settlement, debt validation, debt consolidation and student loan relief.


Paul Paquin is the author of the book called Debt Consolidation to Payoff Credit Card Debt: A Complete Debt Consolidation Guide to Becoming Debt-Free:” (take a look at his book on Amazon)


Just this year, Mr. Paquin released the exclusive… (continue reading on his author profile page) …


Paul J Paquin is a Certified Member of the International Association of Professional Debt Arbitrators; -- Trained on unsecured debt relief options.


Wikipedia, https://en.wikipedia.org/wiki/Unsecured_debt, 08/14/2017

Golden Financial Services, https://goldenfs.org/debt-relief/, 08/14/2017

Ready For Zero Blog, http://blog.readyforzero.com.WZXEy3eGODU, 08/14/2017

Magnify Money, http://www.magnifymoney.com/blog/building-credit/build-credit-with-10-a-month-on-a-secured-card714882391/, 08/14/2017

The Simple Dollar, http://www.thesimpledollar.com/best-home-equity-loan-rates/, 08/14/2017

NerdWallet, https://wallethub.com/best-credit-cards/, 08/14/2017

Slideshare.net, 08/14/2017

CreditCards.com, http://www.creditcards.com/top-credit-cards.php, 08/14/2017


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