Get the most out of debt management. Help yourself by filling out the form on the right to be contacted by a professional debt counselor.

When you are entering into a debt management plan, you should be aware right from the start that there are some debts that are impossible to negotiate to a lower rate. By understanding which debts will be hard, or impossible, to reduce, you can establish a debt relief plan accordingly. It is very important that you review the types of debt you have with the management company you are using so that problem debts can be addressed right from the start.

Types Of Debts That May Cause A Problem During Debt Negotiations

New Credit Cards. If you have recently, within the past 6 months, established a new credit card, the creditor may be unwilling to negotiate the debt. Most creditors believe that financial problems are a long-standing problem and do not occur instantly. However, as most consumers know, financial problems can occur “overnight.” These types of debts are not easy to negotiate, but reductions still can be made with extended effort.

Credit Cards That Are Current. Many people try to be financially responsible, even during the hardest of economic times. These consumers will pay on the credit cards that they can afford, and fall behind on a few that they cannot. When they finally arrive to a point that they need to seek out a debt management plan they usually include all of their debt, even the cards that are current. Creditors, however, will not reduce debt on a current credit card – ever. They believe that regardless of the financial situation the consumer is in, the card is current and therefore affordable. This type of account is impossible to reduce.

Cards That Show Recent Activity. When you make a purchase on your credit card or transfer a balance to a card, the creditor assumes that you have the intention of paying the debt and allows the transaction. If you complete one of these transactions within 3 months of applying for debt relief, the company will be very reluctant to grant your request.

Cards Used For Cash Advances. If you have credit cards that have specifically been used only for cash withdrawals you may have some difficulty receiving a settlement offer on these cards. Creditors usually red-flag a credit card that has too many cash advances on them because it is a sign of financial problems. When you approach a creditor under these conditions they will often deny your request because they assume that you have been making withdrawals from them to pay your other creditors.

Child Support or Alimony. Court ordered payments cannot be negotiated through a debt management plan. These types of proceedings must go through the court system with the assistance of a family law attorney.

Judgments. A judgment is a court enforceable debt that cannot be reduced through debt negotiations.

Student Loans. Student loans cannot be reduced through a debt negotiation program. These loans, however, often have consolidation programs available through the lender.

Taxes. Tax debt cannot be negotiated through a debt relief program. This includes past due taxes, tax liens, or repayment plans that are already in effect. Tax debts will include local, state, and federal taxes.

Secured Debts. A secured debt is any type of debt where the lender holds collateral. This includes mortgages, car loans and personal loans that are secured with an item of value. If you are unable to repay these types of loans the lender will simply take possession of the collateral in lieu of payment for the loan.

While there are other options to settle these types of debts like bankruptcy, it should be noted that bankruptcy will not discharge court ordered payments, judgments, liens, secured debts, student loans, or taxes.