Reason to Avoid Debt-Settlement Firms

While other businesses struggle to stay afloat, the debt-settlement industry is flourishing.

For many cash-strapped consumers, debt settlement may seem like the only option -- short of declaring bankruptcy. In such cases, the consumer hires a debt-settlement company to negotiate a one-time payment -- usually totaling about 40% to 60% of their total debt -- that will be paid to their creditor. The creditor then forgives the remaining debt. While this tactic is perfectly legal, it can cost consumers dearly and, in many cases, leave them even deeper in debt.
Here are sine things you need to know before hiring a debt settlement company.

You'll pay a hefty priceDebt-settlement companies charge fees that often run into the thousands of dollars. Payment structures vary. Some companies charge 13% to 20% of the consumer's total debt, which gets paid over the first 12 to 15 months. Other companies charge up to 35% of a projected settlement amount. For someone with $50,000 in debt that's as much as $10,000 in fees that need to be paid before the consumer can start paying off the settlement itself.

Expect the process to be contentious
Most banks strongly oppose working with debt-settlement companies. The reason? Debt-settlement companies instruct clients to stop paying their bills in order to save for a future settlement. (The savings are deposited in a special account, from which the debt-settlement company withdraws its monthly fee.)

Attrition rates are astoundingly high
If you decide to go the debt-settlement route, the odds are stacked against you. While debt-settlement companies don't release their completion rates, a look into the records of one organization -- the National Consumer Council, which the Federal Trade Commission sued for misleading advertising and shut down in 2004 -- paints a grim picture. Of the company's 44,844 clients, only 638 (a meager 1.4%) successfully completed the debt-settlement program. Nearly half (43%) canceled after paying an average $1,780 in fees.

You could get sued
Since debt-settlement companies instruct consumers to stop paying their bills while they're saving for a settlement, their balances continue to swell with interest and late fees and their credit scores plummet. In order to get paid, creditors may even sue -- and these days, companies do that some time in the second year of nonpayment, says Phelan. With most debt-settlement plans taking 36 months or longer to complete, the chances of getting sued are pretty high.
By Aleksandra Todorova
Source: SmartMoney/www.smartmoney.comClick here to read the entire article

Color it Sold!

Color influences people at the subconscious level. It can entice a person to buy everything from diamonds to detergent. Retail customers respond to the color of a product before they even read the name on a package. How does this relate to real estate? Homebuyers are the customers and the listing is the product.

1. Front Door. Adding color to the entrance makes a great impression with prospective buyers - even before they step inside. The color of the front door needs to create an inviting focal point. Reds and other colors with warm undertones are welcoming - eggplant, burgundy or teal blue are sophisticated.

2. Living Area. The traditional wisdom is to paint every wall in a home off-white, sandy beige, or another neutral color. This is great advice for open, airy spaces with lots of light. In areas with little or no natural light, use a mid-range or darker color to help the shadows disappear and bring a dark room to life.

3. Kitchen. Warmer colors like yellow, gold or terra cotta are good choices for kitchens because they add warmth and comfort. Other colors such as sage green, banana cream or café latte are also perfect for the kitchen.

4. Bathroom. Family or master bathrooms require a backdrop that is flattering for anyone who looks in the mirror. Colors like peach, warm beige and soft tan make just about everyone look good. Watery blues and aquas also work well.

This information was featured in Texas Realtor, May 2009 and provided by Kate Smith, a color expert and home industry consultant, is the managing director of Color For Your Home (ColorForYourHome.com), a professional color-consultant certification program. She shares her knowledge on her web site, SensationalColor.com, and blog, LiveInFullColor.com.