Posts Tagged ‘debt’

Living the American dream is becoming a nightmare for some. We are taught to believe that the American way is to develop credit as early as possible. As soon as we turn 18, credit card companies are inundating us with offers for credit cards specifically designed for students. We buy cars on credit, we buy houses on credit, and if we are fortunate enough to have a stable income and show good payment history, there are plenty of credit card companies that will extend you even more credit. As our credit report grows, companies then begin to extend offers of low or no interest balance transfers in order to get us locked in to their company. Of course, once you transfer the balance, there is more credit remaining for you to continue spending. Before you know it the minimum payments are more than you can handle and you find yourself seeking debt relief. Sound familiar? What do we do to stop the cycle of the debt snowball? Getting out of debt isn’t easy but there are many small steps that you can take to begin the process.The first order of business is to change the way you think about debt. Debt is like a tumor that grows in our life without our notice until it is so large that the situation is seemingly inescapable. Beginning to live within our income range can be a painful process. Look back at the last six months of your credit spending. Were these purchases necessary or simply convenient? I expect you will find spending that was unnecessary and, now as you look at them, frustrating. Now that you are aware of your credit spending, how many of them were true emergencies? I classify an emergency as an event that unless corrected will stop you from functioning in your normal life patterns. Lets use a car repair as an example. Car repairs are inevitable in the lives of most Americans. They are rarely planned for and most often cost more than we have available in uncommitted money. So where does the money come from? Credit cards, pull it out, swipe it, you are back on the road before you know it. That car repair is going to follow you much longer than you will probably own the car. Why? Because the majority of American’s are not willing or able to pay off their credit card balances at the end of the month. There is that tumor, growing and growing.I want to challenge you to change your way of looking at budgeting. Make it a goal to plan for emergencies. Start small if you have to. Plan to set aside an emergency fund. Even if it is only $500.00. Have a garage sale, sell everything that is unimportant, collecting dust, and make whatever sacrifices you have to make such as not going out to eat until you reach your goal. Whatever you have to do to get the money set aside in less than 30 days.

Rules for the emergency fund.

1. Keep the money in a separate account. 2. Only use the money for true emergencies.3. Plan to add to the fund until you have set aside at least one month living expenses, experts say three months.By meeting this challenge you are on your way to reducing debt. Small changes will grow to large ones before you realize it. The tumor will begin to shrink and you will become addicted to reducing your debt. It is like getting income from a second job without ever leaving your home! A Final Thought:There are many different theories and ideas floating around regarding topics such as: debt management, debt consolidation, credit card debt, getting out of debt, debt repayment programs, and bankruptcy just to name some that are commonly sought on the internet. My best advice is to seek the most reputable companies in the industry and ask many questions. If things do not sound right and feel even worse, they probably are what they seem. Then check with more companies. You will be providing a lot of personal information that if it fell into the wrong hands could lead to identity theft and more damaging attacks. Being educated and committing to making small changes are steps that once taken should be celebrated, tell everyone of the hard work you are doing and offer them insights as you learn. Being vocal regarding your new commitments will increase your efforts. Good luck!

Before you consider debt consolidation loans, analyze your debts to conclude the balance. Debt is a source of credit lines given to you by creditors who felt that you would repay the amount borrowed or owed.

When creditors become aware that you are behind on your charges, they will frequently delay a few weeks before reporting you to the collection agencies. During this time, you might want to contact your creditors and ask for an extension, balance reduction, or even a complete termination of the debt. A good number of creditors expect their balance; therefore, they may extend your bill, since they want to keep away from any annoying problems that come in view while reporting customers.

Many creditors do not desire to make enemies with the customers, since they hope that the customer will show good faith and pay the debts, and continue doing business with their services. If you fail to contact the creditors, they will eventually turn your files over to the collection agencies, where people will go to all lengths to stress you to the point where you find a way to pay, or else stress you to the point that you need professional help. A debt consolidation loans for reduction is the process of eliminating debts, while loans may not be needed.

Once you contact your creditors, ask for leniency, so you can work toward debt consolidation reduction by cutting back on your expenses. If the creditors agree to lower your payments, terminate, or else provide you with an extension, don’t take advantage of their generous offer; if you fail to repay after the offer is made, then they will not be as friendly the next time. Make sure that you repay the debts as stipulated by the creditors to avoid any complications. This will help you in consolidating your debts leading to an overall reduction.

Have you succumbed to the lure of credit cards and found yourself in a bit of a pickle because of it?
Pull up a chair and have a seat – Welcome to the ever growing club of consumer debt. Your biggest challenge now is to dig yourself out of this situation and avoid having to pay anyone to help you do it.
The options at this stage are usually as follow (depending on the level of credit card debt):
• Consolidate into a loan.
• Debt Management.
• Bankruptcy.
• Do Nothing.
• Just pay off the cards over as long as it takes.
• Make the minimum payments and keep spending.
• Make an effective DIY plan.
The more popular solutions – such as consolidation loans and debt management -we see being touted everywhere are the ones that put your money in other people’s pocket. I don’t know about you but for me becoming free from debt should not involve spending more money, or borrowing your way out of debt.
So how does a DIY system work?
To break it down into 5 steps it looks something like this:
1. Address your spending habits and why you are in this situation.
To ever win with money and have a comfortable financial future you have to control your money – not the other way round. Take complete control and set yourself some realistic yet desirable goals for the future.
2. Know your options, the ins and outs of how they work – and why they are not for you.
Along the way you will be tempted by quick fix ‘make it all better’ solutions like consolidation loans and debt management. As mentioned already there is a multibillion dollar industry making a very healthy profit from consumer debt. Your DIY plan does not involve paying to get out of debt.
3. Know your situation.
Any debt relief system requires a bit of budgeting. As long you’ve followed the rest of the plan so far, have desirable goals and no intention of taking an easy -and expensive – way out you won’t have trouble budgeting.
The other thing to know is your credit score. There are a staggering amount of mistakes found on credit scores that result in people paying more interest than they should. If you are eligible for lower rates and 0% APR cards to move expensive balances on to – you need to know about it.
4. Minimise outgoings, Maximise income and leverage your cash flow.
If you could be paying less for utilities and day to day expenses you should. There is a very fine art of money saving that you will become very good at if you’re going to be successful at this.
Home economics, consumer education and bargain hunting can save you incredible amounts of cash that can go toward paying off your debt quicker.
If you’re really serious you can take it a step further and create a secondary source of income. Be it a second job, or using a natural skill/strength you have that can earn you money in your spare time.
With the opportunities available online it’s never been easier to find those who are seeking out some knowledge, experience and skills that you have and that they would pay you money for.
5. Form your system and put it into action.
Having followed the first 4 steps and laid some sturdy foundations you are now in a position to develop a quite powerful ‘snowball’ plan. That is a system that gains momentum as you execute it.
This step is completely dependant on the first 4 steps and generating an extra figure that you can assign to snowballing your credit card debt. As the debts get paid off the figure grows and subsequently clears the rest of the debts a lot quicker – saving you a tidy amount of interest in the process.
It is very possible use a DIY plan and enjoy great success from it, yes it takes a bit of hard work and discipline on your part but the alternatives just cost you more and keep you in debt for longer.
It’s your money, it’s your life – if you want to truly own them both then you have to take control – not give it over to someone else. Control or be controlled, the choice is yours.

With so many Americans drowning in a sea of debt right now, it’s only to be expected that we are awash with articles by so called experts that offer advice on debt reduction.

What’s much more surprising though, is that nearly all of the advice that’s being offered is general and vague, and almost completely worthless.

How many times have you seen completely useless advice like, “destroy all your credit cards and then start paying them down”?

Your struggling to put gas in your car, pay a medical bill or your mortgage, and somebody says, “destroy your credit cards!”, and you think to yourself, “thanks for nothing!”.

Right now the average American has close to $10,000 of credit card debt, in addition to his or her other debts, and most of them would love to get free from all that debt, and they just want to know how to do it.

A Quick Overview

The following is just a summary of what needs to be done, after which we’ll go into the details.

The first thing I’d suggest would be to call all your lenders and ask them if they’ll lower their APR, and you’ll likely be pleasantly surprised at the responses.

A number of lenders will more than likely agree while others won’t, but at least you’ll be able to make out a list of your debts, and know which ones you need to eliminate first.

As soon as you know which creditors are charging the highest APR you’ll want to move the debt to a card or lender that charges less interest.

Then what you need to do, is to pay the maximum that you can every month on the card charging the highest amount of interest, and pay just the minimum on the others.

The Details

The reason that some lenders will refuse to negotiate with you is that that they won’t do a deal with people that have been delinquent for less than ninety days. So if you haven’t been delinquent for that long, then tell them that you’re in financial trouble and are trying to avoid becoming insolvent.

It may or may not work, but it’s certainly worth a try.

Assuming that you now have a list of creditors, and you know how much interest each company is charging you, I’d like you to put the list in order with the company charging the lowest interest at the top.

What you then have to do is to call the company at the top of the list and ask them if they’d be willing to assume the debt that’s owed to the company at the bottom of the list.

If they consent, then you must be sure to ask them if they’ll retain the present rate of interest, and if they won’t then make a note of how much the new interest rate will be, and continue on down the list.

Once you’ve called every company on the list you’ll be able to call the company or companies offering the best deals and arrange for your worst debts to be transferred to them.

You’ll then need to reorder your list so that the company that’s charging you the most is at the top; and that’s the one that you’ll want to get paid off first.

You must then pay the lender at the top of the list the maximum that you can every month, whilst paying the others only the minimum.

Once the lender at the top of the list has been paid off, you remove its name from the list, and then focus on the new top of the list lender.

It’s almost certain that you receive tempting offers from different credit card companies in the mail on a regular basis, and you most likely just toss them into the trash.

Don’t!

Instead, call them and ask how much debt they’re willing to assume, and how much interest they’ll charge, and depending on the deal that they offer, you can then incorporate them into your list.

One Last Thing

If you have funds in a savings account that’s earning you next to nothing, then consider withdrawing them, and using the money to pay off, or to pay down some of your expensive debts.

You might even consider cashing in an IRA or 401K if you have one; and if that sounds crazy then consider this.

If you owed $1000.00 on a credit card that had an APR of 14 percent, and you only made a minimum payment of 4 percent, then it would take you 6 years and 7 months to pay off. If however you were to pay off double the minimum amount every month, then it would only take you only one year and three months, and you’d save $269.00!

Hopefully this article will have given you not only some ways to reduce your debts but will have also given you the motivation to start doing it right away.

There are many ways you can reduce your debt. You can choose to get various agencies like consolidation or debt management agencies to do it for you or you can choose to reduce the debt yourself. Choosing a do-it-yourself option can be quite a learning experience.What you need to do first is to understand where you are coming from. This is the first but nerve racking step to debt reduction. Write down what you owe who, if there are any interest rates involved and even any outstanding loans like student or mortgage loans. If you think that your debt is out of control, you may require the services of a professional debt counselor.Take a look at your monthly budget and pen down your income after taxes; you can then subtract all your expenses and see what your balance is. This amount is what you can use to pay off your debts. Take time to examine what you can reduce spending on; it could be taking the bus or carpooling instead of always driving to each destination.  Remember the more monthly payments you make towards your debt, the sooner you will be debt free.Create a financial plan on how you will go about reducing your debt. Make a decision to pay a certain amount per month to each debt. While you are doing this, you are not adding any extra debt. If possible try and increase the number of monthly repayments. If for example you are paying $225 this month, try and pay $275 in another two months. Talk to your creditors during this period and see if you can negotiate lower interest rates or even lower monthly payments. Above all, follow your plan through see it to the end. It will make you wiser in the long run.

When we leave our finances unchecked, debts can sprawl out of hand. When this happens, we are obliged to look for relief programs that will get us out of the financial mess or distress. Debt reduction is one option that we may choose to consider so as to get the bills under control. You could ease the process by making use of the liability reduction calculator, which is readily available online. Debt reduction allows you to manage your finances by way of adhering to a budget. You have to establish how much, on the minimum, you are willing to pay for your bills every month. You then come up with a maximum figure for the same. Get the difference between the minimum amount and your monthly pay. What you end up with is the amount that you will be applying towards your bills in order of priority. That is to say that, you will concentrate on paying one lender at a time until that particular liability is done with. This is known as snowballing. Once you are  done with the first bill, the process is repeated until all bills are cleared. It is advisable to start clearing your bills from the least to the largest. There is no particular reason behind this but it is said that it gives you some psychological satisfaction and helps to keep you motivated as you see your liabilities disappear gradually. For the method to work efficiently, you have to be truly honest with yourself.

Debt reduction needs dedication and prior planning. You don’t really need to hire a debt counselor or debt consolidation agency to help you in managing your debts. This is something that you can do for yourself. There are several steps that can help you reduce your debts.The first step is for you to evaluate your debts, you need to collect all your financial documents. Making credit reports will help you know where you stand financially, they will also help you with debt recovery. You need to sit down and write your balances, interest rates as well as the monthly payment due for each of your debts. Assessing your monthly budget will also help in debt reduction. Calculate your monthly income and subtract your taxes as well as other expenses. What is left after you have subtracted all your expenses and taxes from your monthly income is what you should use to pay your debts. If the figure is too small, you should look for ways to try to minimize your expenses. The more money you allocate each month for debt settlement, the sooner you will be able to clear your debts. The third step is for you to make a plan that will help you reduce your debts. Ensure that what is left after you have subtracted all your expenses and taxes from your monthly income is used to pay the debt with the highest interest rate and the highest balance. The fourth step is for you to start negotiations with your creditors to see if they can agree to a reduced settlement. Making sure that you meet your monthly payment goals is the last step in trying to achieve debt reduction.

The amount that Americans owe on loans for houses, cars and credit cards now adds up to over 101% of their income according to the latest Federal Reserve study. Huh? Yes, people are spending more then the make every year. How long do you think that can continue? Debt is cash flow into someone else’s pocket so that they can live the life of their dreams by taking the cash out of yours. It is that simple. There are so many programs for debt consolidation, credit restoration and even debt elimination through bargaining. In my personal research, I have found that many return right back into unmanageable debt just a few short years later. Why? Because they live today to pay for tomorrow. You also have a simple choice to make, it is called delayed gratification. Some how people have bought into a new set of values – live for today, pay for it tomorrow. In the mean time, what they pay for today, they throw it away before they ever pay it off. Many of the current trends are teaching us to reevaluate our values. Do we want all this stuff? Are WE the big house, the large car or the fancy stuff? I don’t think so. It is much better to live a life full of experiences and joy then the stress of living pay check to pay check. Cash Flow Potentials will share with you the secrets of the wealthy and a balanced life. We also give you a free guide on how to reduce your debt and eventually eliminate it. If you want to accelerate your debt reduction, we show you how a low cost of entry personal franchise,having your own business, will accomplish that for you. You might have to change some habits, but it is definitely worth it!Ready to live debt-free?

Get your Free Debt Elimination Guide

Do you shuffle bills from month to month deciding which one needs to paid first? Is there unopened mail sitting on the counter? Has the checking account never been balanced? Are you always borrowing a few bucks from family and friends? Do you write checks but then forget to mail them? If any of these questions hit home for you then you need this information.
Until you have your debt under control there is very little you can do to increase your wealth. Wealth creation is a function of the way you think about money, what you do to allow it to flow, and how you speak about it. Here are some tips to start you in gaining control of your financial future.
1. Get Real ~ The first thing you must do is admit you have a problem. Getting real means actually looking at the bills, adding up the debt, and seeing just how bad, or good, your situation is.
2. Plug the Hole ~ After you know what’s real and what’s not, you need to plug the holes. Stop going further into debt by creating new debt. Remember, a dollar lost doesn’t just cost you that dollar, it also costs you what that dollar could earn if you still had it. We call this opportunity cost
3. Eliminate Unnecessary Items ~ Look for things you can live without and learn how to say no. Do you really need that magazine subscription or cable service? Remember the opportunity cost.
4. Plastic Surgery ~ Get rid of the cards that created this mess in the first place. This is often the hardest thing for most of us to do, but it will bring the greatest rewards.
5. Keep Records ~ Start keeping track of what you spend money on. Buy a small notebook and write down how much you spend and what you spend it on. Then transfer this to a spreadsheet so you can see exactly where the money goes each week and each month.
6. Debt is a Temporary Situation ~ Don’t look at your debt as a permanent thing. You can pay off each and every creditor and you can do it comfortably without depriving yourself. You can live a life of prosperity and abundance.
7. You Have More Than You Think ~ Don’t let the temporary condition of your debt cloud the many blessings that are in your life. Be thankful for your family, your job, your ability to work, and the many material things in your life.
8. Bankruptcy is Not an Option ~ Bankruptcy is just a delaying tactic. It will give you a little more time but it won’t get to the underlying cause of your debt. Sooner or later you will end up in the same position. Bankruptcy does nothing to alter your beliefs about money; it may leave you with a sense of shame and embarrassment, and it plagues your credit for 10 years.
9. Debit Cards ~ Once the credit cards are gone you should get a debit card to purchase things you know you can afford. By using a debit card you are restricted to the balance in your checking and savings accounts. It removes one more means of going into debt.
10. Make More Money ~ What can you do to bring more money into the household? A part-time job, a garage sale, consulting work? Use your imagination or get the family together and brainstorm. You will be surprised at the ideas that you will come up with.
11. Celebrate the End to Each Bill ~ Don’t suffer over your debt, celebrate its demise. You should reward yourself when each debt is paid off. Maybe it is a meal out or a day trip to the beach or a dinner party at home. Let your success be recognized.
12. Take Action ~ Make lists of actions you can take. Keep your spending record, look at the want ads, make a few extra calls each day, create mailing lists, change your hairstyle, wake up earlier, exercise, meditate, turn a hobby into a profession. Keep yourself in action and success is guaranteed.
13. Balance Your Checkbook ~ Know where you are every day. Make sure when you balance your checkbook that you don’t forget to add in all the things you spent cash on.
14. Get Support ~ Alone is how you got into this mess and chances are alone will be how you stay in it. Ask for help. Get a coach, hire a credit counselor, join Debtors Anonymous, or just share with a friend who will hold you to your word.
15. Keep It Simple ~ Don’t let yourself think you will never succeed. The letter from the creditor that came today is just one letter. You will not die if you open it and you will not die if you don’t pay them this month. Keep your focus on one thing at a time and pay your creditors off one at a time.
16. Have a Plan ~ If you are to succeed you will need a plan. One way to plan is to start paying off your creditors from the smallest balance debt first. Once you have paid it off, take the money you were putting onto that bill and add it to the next bill. This way you will accelerate your debt reduction.
17. Tell the Truth ~ Don’t lie to your creditors. Trust me: they have heard them all. Be straight with them and make requests of them. See if they would be willing to reduce your interest rate or set up a different payment plan.
18. Make Notes ~ When you talk with your creditors make notes about who you spoke with and what was discussed. Make sure you note the date and time of the call and any other pertinent facts. Keep your notes in a place they can be accessed easily should there be a question about the conversation in the future.
19. Consolidate ~ Consolidating your debts may help but be wary of what it might cost you. Can you afford the combined payment and can you keep yourself from taking on new debt?
20. Speak Success ~ Start being responsible for what you say and how you say it. Get the negatives out of your speech: “I have a lot of debt”, “I wish I had more money”, etc. Start speaking from abundance and prosperity: “I am debt-free”,”More money comes to me every day”, “I do wonderful work in a wonderful way”, “I give wonderful service for wonderful pay”.
21. Create a Pool ~ There are debt pooling agencies that will negotiate with your creditors and pay your monthly bills. You send them a single check each month. The cost of this service can be high, though. Make sure you check them out thoroughly before signing anything. A better approach might be to use one of the legitimate non-profit organizations in your area.
22. Know What You Want ~ Start to dream a little. What would you do, be, or have if money were no object? Get out a piece of paper and write down all the things you would like to be, have, or do, and start to feel what it would be like to get what you want.
23. Look For Opportunity ~ Be open for miracles and serendipity to appear in your life. When you open up your mind to what you want, don’t be surprised if it starts showing up. Be ready and willing to act on those opportunities.
24. Create Multiple Sources of Income ~ No one ever got rich working for someone else. Look for ways to add additional sources of income. Maybe it’s that book you have been meaning to write, a piece of rental property, or a great network marketing business. Keep your eyes and heart open to what that business might be.
25. Never Go Back ~ Commit to never go back to the debt trap again. Build that cash reserve, add to your investments, and develop multiple streams of income. Feel good about yourself and what you have accomplished and share your knowledge with others. You can be proud of yourself and your achievement.

Credit card debt reduction services are becoming more popular as more people find themselves in financial trouble. Consumers who believe that credit card debt reduction services may be an option for them should first do some homework. Two things are important before signing up with any company. The first is to know exactly what it is you need done with your credit so that you can work with the right kind of company. The second thing to do is to make sure that you are going to be working with a reputable and honest company.
It may sound like common sense for consumers to know what they need before signing up with a company, but there is often more to it than we think. The first issue that consumers usually have to deal with is the many names that are used by companies offering to help with credit debt. In some cases, the area of expertise is apparent, but in other cases the expertise of the company may not be so easily understood.
If taken purely on face value, there are big differences between companies that offer debt consolidation loans and those that offer debt counseling. Then there are those that offer debt repair service. In some cases, there can be a mix in that one company may offer several services. In other cases, a company will work exclusively in one area.
With all these set-ups available, consumers really do need to consider what services would best fit their financial needs and will bring about the best results.
Consumers should understand that not all credit card debt reduction services work alike. Some will be more adept at helping you get lower interest rates on your current debt. Others will work to get some of your debt forgiven so that you do not have to pay on it anymore. Most will be able to help you set up a reasonable budget to help you avoid getting further into trouble.
Some of these companies will work on a performance basis. That means that you do not pay them until they actually bring about some real results. In most cases, these companies will charge you a percentage of what they save you.
The second issue as mentioned above is to make sure you are working with a reliable and honest company. Simply put, there are companies out there who will cheat you or take your money and do nothing in return. Of course, you want to avoid these folks at all costs.
Those companies that require you to send them large advance fees should be investigated carefully before you send them your money. You can often get information on a company by doing a simple Google search using the company name as your search term.
If you decide to work with a company that will take your money and in turn pay some of it to your creditors make sure that they are doing that for you. There have been cases in the past where companies took customer’s money and did not forward the required amount to the creditors.
Use common sense and caution when searching for the companies that can help you.