You may be able to consolidate with a loan from your local bank or credit union, an online lender that offers personal loans, or by transferring a balance from a high-rate credit card to a low-rate one. If you get a consolidation loan online, be sure to deal with reputable lenders as there are scammers who will take the information consumers submit with applications and use it fraudulently.
Some people increase all their minimum payments by just a little bit, but that way your payments only drop by a small amount each month. You can make more noticeable progress by making a big payment to just one of your accounts each month until that debt is completely repaid. In the meantime, make the minimum on all your other accounts. Then do the same for another debt, and then another, until they’re all paid off.
If you use your debt consolidation loan to pay down your outstanding credit cards and become debt-free, then it should help to raise your credit score over the long term. However, it’s possible that applying for and obtaining a debt consolidation loan could temporarily lower your credit score at the outset. Submitting a new credit application often drops your credit score by a few points, as does opening a new credit account. However, as long as you use the debt consolidation loan to pay down your debts, you should see a positive impact on your credit score over time.
We really appreciate that credit.org has so much to offer at no charge. And, for many consumers, some knowledgeable, friendly coaching may be all they need for debt relief - to identify the best steps to take next and the ideal resources to get them there. Plus, credit.org's fantastic reputation over nearly 5 decades is a huge advantage in an industry where it seems like some new financial or debt service is always popping up. For their wide range of services, including free coaching for consumers, credit.org earns very high marks and is worth your consideration.
Our main reason for not giving Accredited Debt Relief a score higher than 3.5 stars was a lack of information on their website. Most of their higher-ranked competitors provide details as to the average fees charged - either by themselves or by the debt relief companies with which they partner - so that prospective clients can get an idea of those rates before making that first contact. Also, the ADR site says in multiple places that they operate in "most states", but that their service is "not available in all states and [their] fees may vary from state to state". It would save customers time if they knew in advance that their state is not one of those covered by Accredited Debt Relief's services.
Bankruptcy. Declaring bankruptcy has serious consequences, including lowering your credit score, but credit counselors and other experts say that in some cases, it may make the most sense. Filing for bankruptcy under Chapter 13 allows people with a steady income to keep property, like a mortgaged house or a car, that they might otherwise lose through the Chapter 7 bankruptcy process. In Chapter 13, the court approves a repayment plan that allows you to pay off your debts over three to five years, without surrendering any property. After you have made all the payments under the plan, your debts are discharged. As part of the Chapter 13 process, you will have to pay a lawyer, and you must get credit counseling from a government-approved organization within six months before you file for any bankruptcy relief.
Like some of the credit card consolidation loans in our review, Payoff's funds aren't required to be used specifically for paying off credit card debt. In other words, if you get your Payoff loan for anywhere from $5000 to $35,000 and use it on something else, you'll still have your credit card debt PLUS monthly payments on your new loan. That's not ideal. Interest rates range from 5.99% APR to 24.99% APR, with terms between 2-5 years. On the higher end of those interest rates, you could be paying more for the personal loan than you were paying on your credit cards!
People often ask us about debt consolidation and whether consolidating their debts will affect their credit. Whether consolidating your debt is a good idea depends on both your personal financial situation and on the type of debt consolidation being considered. Consolidating debt with a loan could reduce your monthly payments and provide near term relief, but a lengthier term could mean paying more in total interest.

Yep, you read that right. And yes, we even mean stop contributing to your 401(k). Right now, you want all your income to go toward getting out of debt. Once you’re debt-free and have saved three to six months of expenses in an emergency fund, then you can resume your contributions. By then you’ll be on Baby Step 4 and can start putting 15% of your income toward retirement.
Kids grow out of clothes at the speed of light (or so it seems). And let’s be real: It’s not worth it to go into debt for your 2-year-old’s ever-changing wardrobe. Check out your local consignment stores that sell pre-loved outfits in good condition. If you’d rather shop online, no problem. Sites like thredUP and Swap.com are great resources to get adult and children’s clothing at a fraction of the cost.
Our biggest complaint is that the site lacks contact information. There is only an email option, so if you need a loan fast but have questions you would like to ask, this company might not be a good fit. As with most websites, Avant's is specifically tailored to encourage applying for a loan, asking basic information including your social security number. Once you apply, a loan officer contacts you and offers you a loan appropriate to what you qualify for.
Legal Disclaimer: This site is for educational purposes and is not a substitute for professional advice. The material on this site is not intended to provide legal, investment, or financial advice and does not indicate the availability of any Discover product or service. It does not guarantee that Discover offers or endorses a product or service. For specific advice about your unique circumstances, you may wish to consult a qualified professional.
The goal is to negotiate a payment with your creditors that is lower than your full outstanding balance. Paying less than you originally owed may seem like a great deal—until you consider the consequences to your credit, which could be substantial. Additionally, the forgiven debt may be reported as income to the IRS, which means you may have to pay taxes on it.
The FICO® Score☉ , which ranges between 300 and 850, is the most commonly-used credit scoring model by lenders for evaluating a borrower's creditworthiness and has several ranges. Credit scores above 670 are considered good, very good or exceptional depending on the score. A "fair" score ranges from 580 to 669 and any score that is lower than 579 is considered "poor." Knowing your credit score is important in determining your options, but even with less than perfect credit, there are still ways you can consolidate your debt.
Experian, one of the three major credit bureau companies in the U.S., said the impact on your score should be minimal if you and the agency making payments for you, are on-time every month. If lenders look at your full credit report while you are in a DMP, they will see that you are repaying the debt at a reduced rate and it may affect their final decision on whether to grant you a loan.
As discussed above, average credit card debt in America has been rising over the last decade. However, despite this, the average percentage of people holding credit card debt has been gradually decreasing. This tells us that the while average credit card debt is increasing, it’s not due to a greater number of individuals spending. Instead, in recent years, more people have been more heavily indebted.
You find a balance transfer card offering a 0% interest rate for the first 12-months. If you pay off the $10,000 within the 12-month 0% interest period, you'll pay $0 in interest, saving yourself $831. Even if you pay a balance transfer fee which is on average, 3% ($10,000 x 0.03 = $300), you'll still be saving $531. Still, you should always try to negotiate any balance transfer fees.
Freedom Debt Relief (FDR) was a blessing from beginning to end. I enrolled four debts into the program totaling close to $60,000. FDR negotiated my debts down by 43%. I graduated the program in just 2.5 years, which is 19 months ahead of the estimated graduation date. I accomplished this by making as many additional deposits as I could by working lots of overtime and making sacrifices in budgeting.
*Clients who make all their monthly program deposits pay approximately 70-75% of their original enrolled debts over 24 to 60 months. Not all clients are able to complete their program for various reasons, including their ability to save sufficient funds. Our estimates are based on prior results, which will vary depending on your specific enrolled creditors and your individual program terms. We do not guarantee that your debts will be resolved for a specific amount or percentage or within a specific period of time. We do not assume your debts, make monthly payments to creditors or provide tax, bankruptcy, accounting or legal advice or credit repair services. Our service is not available in all states and our fees may vary from state to state. Please contact a tax professional to discuss potential tax consequences of less than full balance debt resolution. Read and understand all program materials prior to enrollment. The use of debt settlement services will likely adversely affect your creditworthiness, may result in you being subject to collections or being sued by creditors or collectors and may increase the outstanding balances of your enrolled accounts due to the accrual of fees and interest. However, negotiated settlements we obtain on your behalf resolve the entire account, including all accrued fees and interest. C.P.D. Reg. No. T.S.12-03825.
Next, you need to get as much cash flow as possible for your debt reduction plan. See how much free cash flow you have in your budget – that’s all the cash you have left after you pay bills and necessary expenses. Then see if you have any unnecessary expenses you can cut temporarily while you reduce your debt. Remember, you will put these expenses back once you’re done eliminating debt. Think of it like a diet you stick to while you lose all that extra financial weight.

I wonder if it’s more beneficial to pay off my student loans in order of highest interest rate or by the amount of interest that accrues on it daily. For example, I have a student loan with a 6.8% interest rate that has a balance of about $8500 that accrues interest at a daily rate of about $1.50. I also have a 6.21% interest rate loan of 18,500 that accrues interest at a daily rate of about $3.14. Although the former loan has a higher rate, it would seem better to tackle the loan that generating more interest. What are your thoughts?


If you want some early small victories, some people recommend the “snowball” method, where you pay minimums on the largest bills while you work at paying them off, smallest to largest. Once the smallest one is paid off, you put the money you had been paying toward the next-smallest and so on. Another way is to pay the highest-interest-rate balance first. Use the one that makes the most sense to you. Read more here: 5 Ways To Get Out of Debt: Which Will Work for You?

With some consolidation options, you may end up with a higher monthly payment than what you're currently paying. For example, credit cards typically require a minimum monthly payment of around 1% to 4% of your balance. So, in our previous example with the $7,000 balance, your minimum would likely be lower than the $233 monthly payment on the personal loan option.


For example, a walk in the park is equally as enjoyable as throwing bowling balls at the alley. A backyard barbecue with friends is much more pleasurable, enjoyable, and affordable than an expensive meal out. Going through your already overflowing wardrobe may spark an idea that you can use to set up a fashion trend of your own. An update of your existing gadget may not be necessary after all.
Although it’s not possible to settle or discharge balances on federal student loans without declaring bankruptcy, it may be possible to settle private student loan debt. Some student loan servicers may be willing to let you out of a student loan for less than you owe. However, you need to go into the settlement negotiation with realistic expectations and the right negotiating tactics.
Before you enroll in a debt settlement program, do your homework. You’re making a big decision that involves spending a lot of your money — money that could go toward paying down your debt. Check out the company with your state Attorney General and local consumer protection agency. They can tell you if any consumer complaints are on file about the firm you’re considering doing business with. Ask your state Attorney General if the company is required to be licensed to work in your state and, if so, whether it is.

Life insurance is designed to give you peace of mind and help your family manage the financial loss for your spouse, children or another family member. If the death of the insured family member would be catastrophic to the family’s finances, you should restrain yourself from borrowing against a life insurance policy. Consider the other options available to you on this page before going down this road.


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Debt settlement is when a creditor agrees to accept payment that is less than what is owed on your credit card debt. Sound too good to be true? It is! There are a lot of negatives that make this a risky alternative. Your credit score will plummet, and you will find it very difficult to get a loan in the future because you didn’t pay back this one. This is something that only should be considered if all other avenues are closed. You may be responsible for paying taxes on the amount forgiven.
*Our estimates are based on prior results, which will vary depending on your specific enrolled creditors and your individual program terms. Not all clients are able to complete their program for various reasons, including their ability to save sufficient funds. We do not guarantee that your debts will be resolved for a specific amount or percentage or within a specific period of time. We do not assume your debts, make monthly payments to creditors or provide tax, bankruptcy, accounting or legal advice or credit repair services. Our service is not available in all states, including New Jersey, and our fees may vary from state to state. Please contact a tax professional to discuss potential tax consequences of less than full balance debt resolution. Read and understand all program materials prior to enrollment. The use of debt settlement services will likely adversely affect your creditworthiness, may result in you being subject to collections or being sued by creditors or collectors and may increase the outstanding balances of your enrolled accounts due to the accrual of fees and interest. However, negotiated settlements we obtain on your behalf resolve the entire account, including all accrued fees and interest. C.P.D. Reg. No. T.S.12-03825.
Start by getting debt help from a credit counselor. The counselor might even help you negotiate your own agreements with creditors. If you develop and follow a get-out-of-debt plan with the help of a counselor (as opposed to consolidating your debt), your credit score will rise over time faster than it will if you declare bankruptcy or ignore your debts, as you make on-time payments and reduce your overall debt load. You’ll also avoid the hit to your score that comes with the new hard inquiry we talked about earlier.
Other companies, besides your lender, will also gladly take a fee for a debt payoff program. They sell software programs and systems to handle everything for you (or at least tell you what to do). You generally don’t need these services unless they’ll help solve a discipline problem. If you’re not getting it done any other way, do whatever works—but make sure you save more than you spend.
The term debt consolidation refers to the act of taking out a new loan to pay off other liabilities and consumer debts, generally unsecured ones. Multiple debts are combined into a single, larger piece of debt, usually with more favorable payoff terms. Favorable payoff terms include a lower interest rate, lower monthly payment, or both. Consumers can use debt consolidation as a tool to deal with student loan debt, credit card debt, and other liabilities.
A consumer makes monthly payments to the debt settlement company, or to the bank (or bank agent) who holds the "trust" account. A portion of each payment is taken as fees for the debt settlement company, and the rest is put into the trust account. The consumer is told not to pay anything to the creditors. The debt settlement company's fees are usually specified in the enrollment contract, and may range from 10% to 75% of the total amount of debt to be settled.[12] FTC regulations effective October 27, 2010 restrict debt settlement companies from collecting any fees from a debtor client for services until settlement with the creditor has been reached and at least one payment made.
In general, we really like SoFi's approach to reducing debt and their supportive approach to helping clients with low-interest personal loans. The only drawback with respect to credit card consolidation is that it's more a of a do-it-yourself method, as SoFi focuses on paying off your credit cards with a personal loan. So, if you'd be tempted to take that personal loan to buy "toys" instead of paying off your credit card balances, you might need to consider one of the other services in our review that do more traditional credit card consolidation.
Defaulting on national debt, which can include going bankrupt and or restructuring payments to creditors is a common and often successful strategy for debt reduction. North Korea, Russia, and Argentina have all employed this strategy. The drawback is that it becomes harder and more expensive for countries to borrow in the future after a default.
A debt consolidation program is a service designed to help borrowers pay off their outstanding debt. In these programs, consumers receive the tools to develop a loan repayment strategy with which to manage their existing debts. These programs allow the borrower to make one monthly payment, which goes toward all outstanding debts, usually on a timeline to get the borrower completely out of debt in 3-5 years. A credit-counseling agency or debt settlement company usually manages these debt consolidation programs, and the mission is to help consumers get out of debt and become financially independent.

You can get your credit reports from each of the three major credit reporting agencies for free once a year at AnnualCreditReport.com. It’s a good idea to review them so you don’t end up in the situation Norma found herself in, getting denied due to a mistake or negative items you weren’t aware of on your credit reports. Your credit report should also list most, if not all, of your debts, which will help you with the second step.
If none of these options is possible, bankruptcy may be the likely alternative. There are two primary types of personal bankruptcy: Chapter 13 and Chapter 7. Each must be filed in federal bankruptcy court. Filing fees are several hundred dollars. For more information visit www.uscourts.gov/bankruptcycourts/fees.html. Attorney fees are additional and can vary.

n (= money owed, obligation) → Schuld f; debt of honour (Brit) or honor (US) → Ehrenschuld f, → Verschuldung f → der öffentlichen Hand; to be in debt → verschuldet sein (to gegenüber); to be £5 in debt → £ 5 Schulden haben (to bei); he is in my debt (for money) → er hat Schulden bei mir; (for help etc) → er steht in meiner Schuld; to run or get into debt → Schulden machen, sich verschulden; to get out of debt → aus den Schulden herauskommen; to be out of debt → schuldenfrei sein; to repay a debt (lit, fig) → eine Schuld begleichen; I shall always be in your debt → ich werde ewig in Ihrer Schuld stehen

If debt is mounting and you continually find yourself struggling every month, it may be time to seek debt relief. An important part of selecting the best way to eliminate your debt is to realize when it's time to ask for help. Debt consolidation and debt settlement programs are both very popular ways to help consumers get out of debt in a short period of time, but are they right for you? Neither of these programs are available for people who are simply tired of paying their bills, but they are available to those who are already late with payments, have bills in collections or have had a sudden change in their income.


Each consumer has different needs, and many lenders provide specialized loans designed to meet them. The list identifies the top debt consolidation loan companies based on factors such as eligibility requirements, interest rates and other useful features. You can use the list to find the best lender for your credit history and your financial situation.
If you wish to talk to a debt professional, get in touch with National Debt Relief. We are a legitimate debt management company who will work with you to achieve financial freedom. At the very least, we can advise you on the ideal path that you should take depending on your financial capabilities. Give us a call or fill out the short form on this page. We will have someone get in touch with you. The initial consultation is for free and we will never ask for upfront fees.
It’s true that many people get into debt because they lose their jobs. But some people get into debt despite having well paying jobs. It’s good to share information so that people have a plan to save while they have a job so they can weather a job loss. And for those who accumulate debt beyond their means while employed, it’s good to give them a plan of action to “right the ship.” Hope you find something that helps you weather your storms.
Because a personal loan is unsecured, there are no assets at risk, making it a good option for a consolidation loan. However, be aware that a large, prime-rate loan requires good credit, and rates are typically higher for personal loans than for home equity loans. Check out Bankrate’s pre-qualification flow to get the best personal loan rate for you.
As a Non-Profit, BBB A+ Accredited member since 1999, you can have faith in our business to provide legitimate financial help and stay with you throughout your journey. You don’t have to take our word for it, you can read the thousands of testimonials we have from real people who were once in debt, but now have a clean slate and a bright financial future: Credit Counseling Service Reviews

If your credit card issuer isn't listed here, you should contact its customer support to see whether it is offering any sort of relief to those affected by COVID-19. It's possible that current relief efforts could be extended or expanded as the pandemic continues, so it's important to pay attention to any correspondence you receive from your credit card issuer during the crisis.

During the process, your family will enjoy a monthly deposit right into a trust account that may eventually become useful for the debt repayment. As funds start to accumulate inside the account, the debt reduction company will start to negotiate together with your creditors. Once a debt reduction offer has been arranged, you need to send that amount, straight from your settlement fund, towards the creditor. After the payment has been made, that debt is considered settled entirely. And also the account will be closed.

So, why doesn't this lender rank at the top of our evaluations with such a strong track record? It's a criticism shared by several other lenders in the credit card consolidation sphere: Credible's loans can be used for anything you choose, not just to tackle your credit card debt. In other words, if you're financially disciplined enough to use your loan to pay off your credit card balances, fantastic! But, for many people who find themselves in need of credit card consolidation, they don't exactly have the most stellar history of making wise financial decisions. Without requiring funds to be used for that purpose, Credible isn't really in a position to help you improve your financial situation - and they don't give you any tools to do that either.
Walking or biking to work have benefits beyond just saving money too. More exercise, less pollution, less aggravation. When I worked in an office, I always walked to and from work. Sometimes as much as 45 minutes each way and in all kinds of weather. Such was my mania to avoid giving the MTA one cent I didn’t have to give their crummy service. And to save money of course.
A syndicated loan is a loan that is granted to companies that wish to borrow more money than any single lender is prepared to risk in a single loan. A syndicated loan is provided by a group of lenders and is structured, arranged, and administered by one or several commercial banks or investment banks known as arrangers. Loan syndication is a risk management tool that allows the lead banks underwriting the debt to reduce their risk and free up lending capacity.
The application will ask for basic information such as how to contact you and the amount of debt you're needing to manage. Like most websites, the main focus is to allow one-to-one communication between the company and the client, so a customer service rep will call you to find out more information about your situation. Based on the reviews, new clients can expect kind and friendly service.
Bill “No Pay” Fay has lived a meager financial existence his entire life. He started writing/bragging about it seven years ago, helping birth Debt.org into existence as the site’s original “Frugal Man.” Prior to that, he spent more than 30 years covering college and professional sports, which are the fantasy worlds of finance. His work has been published by the Associated Press, New York Times, Washington Post, Chicago Tribune, Sports Illustrated and Sporting News, among others. His interest in sports has waned some, but his interest in never reaching for his wallet is as passionate as ever. Bill can be reached at [email protected]
Possible late payments: The Federal Trade Commission recommends you keep paying your creditors until you receive written confirmation from them noting they have accepted your DMP. Then check with your credit counselor to make sure payments will be made by each account's due date every month, and follow up with creditors to confirm the agency is paying bills on time.
Another major change to the bankruptcy laws involves certain hurdles that you must clear before even filing for bankruptcy, no matter what the chapter. You must get credit counseling from a government-approved organization within six months before you file for any bankruptcy relief. You can find a state-by-state list of government-approved organizations at www.usdoj.gov/ust. That is the website of the U.S. Trustee Program, the organization within the U.S. Department of Justice that supervises bankruptcy cases and trustees. Also, before you file a Chapter 7 bankruptcy case, you must satisfy a “means test.” This test requires you to confirm that your income does not exceed a certain amount. The amount varies by state and is publicized by the U.S. Trustee Program at www.usdoj.gov/ust.
Hi Tamara! It’s great that you’re really starting to get a handle on this. I’d strongly suggest paying your debt using the avalanche/ladder method described in this post to minimize the amount of interest you’re paying. If you’d like help building a plan, you should schedule a free budgeting call with one of our credit counselors. Good luck getting rid of this debt!
More consumers may be charging groceries because they’re strapped with other types of debt, such as student loans, which have doubled to about $1.6 trillion in outstanding debt since 2010, he notes. Auto loans and mortgages are also at all-time highs. After repaying monthly home, auto and student loans, some consumers don’t have much wiggle room, Micheletti adds.
When you say “released” I assume that is when the dentist gave up attempting to collect and then sold the debt to a third-party. In other words, it sounds like they didn’t “hire” a collection agency but instead “sold” your debt to them. I could be wrong, but either way it sounds like there is some sort of contractual arrangement between them and the collector that prevents them from dealing with you until this is paid. I’m not sure why they haven’t tried to contact you, and that does seem very odd. If you’re in a position to repay the debt, I would strongly encourage you to get this all in writing from your dentist first and document your correspondence with the collectors as well.
Consumer credit can be defined as "money, goods or services provided to an individual in the absence of immediate payment". Common forms of consumer credit include credit cards, store cards, motor vehicle finance, personal loans (installment loans), consumer lines of credit, payday loans, retail loans (retail installment loans) and mortgages. This is a broad definition of consumer credit and corresponds with the Bank of England's definition of "Lending to individuals". Given the size and nature of the mortgage market, many observers classify mortgage lending as a separate category of personal borrowing, and consequently, residential mortgages are excluded from some definitions of consumer credit, such as the one adopted by the U.S. Federal Reserve.[7]
Are you sick of sinking deeper and deeper into debt by the months? Is it so bad that you are considering filing bankruptcy? Well, it may not be that bad, we can help you make your credit situation better. We are a full-service debt relief company and we are here to help you get back to your feet financially so that you take on a path towards financial freedom.
Talk with a credit counselor. A certified counselor can work with you to assess your financial circumstances, create a viable budget and discuss your options. "We review individual situations to offer personalized options for managing credit card debt," says Bossler. She adds that debt settlement is often one of the options discussed, but it's not always the best one.
Bankrate has been comparing and surveying lenders and financial products for over 40 years. Hundreds of top news organizations rely on Bankrate as a trusted source of information. Bankrate strives to help you make smart, informed decisions about your finances. We follow strict guidelines to ensure that our editorial content is not influenced by advertisers. Our editorial team receives no direct compensation from advertisers and our content is fact-checked to ensure accuracy.
Transferring high-interest credit card debt to lower-interest cards is a good idea when your credit score is good enough to qualify for low to no interest introductory offer cards. This method is also advantageous if you know that you can make major headway toward paying off your debt during the introductory, low-interest period. If you’re going to use the new card to run up more credit card debt, then don’t bother with this.
I have a good amount of credit card debt I am working on… I am currently using the snowball method to eliminate a few small accounts, but am considering switching to the ladder method you mentioned above. My question regards balance consideration. While one card may have a higher interest rate, another card has a much higher balance and the interest charged, even though at a lower rate, is greater each month. So it seems like the higher balance is costing me more to cary than the higher interest rate with a lower balance. In that case, it would seem that the higher balance card which is costing me more each month should take priority for my surplus payment. This gets even more complicated with multiple accounts and changing balances. What are you thoughts on this method?
We’ll be with you every single step of the way. In fact, we want to walk with you until the day you can confidently say “I’m an everyday millionaire.” Check out Ramsey+. It’s the all-access membership that gives you our bestselling money products . . . all in one place.  Sign up for your free trial and see just how easy it will be to say goodbye to debt (for good) and hello to financial peace. Ready to do this?
Thanks for all this information. I have four student loans and a new car loan. My student loans total 51000, car loan another 18000. I have one student loan at 28000 with an interest rate of 6.8. I was told consolidating the four student loans will not help me out much. I just signed up for auto debit and I can afford to pay a bit over the minimum payment each month. My question is this: I have two student loans at 6.8 but one is substantially lower – 8773. Would it be better to pay off the smaller debt at the same high interest rate first or work on the larger debt?
Your credit counselor will negotiate with your creditors, who may agree to lower or eliminate fees, reduce interest rates and possibly even reduce the amount you owe. If you agree to the DMP, you will close your credit cards and give the agency permission to manage your accounts. You will send the counselor a single payment each month, and the counselor will pay your creditors. You just need to ensure that enough money is in your checking account on the date the agency withdraws the funds.
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