Category Archives: Debt Management

How to Keep Hold of Your Home When You’re in Debt

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Whether you’re failing on your mortgage payments, or you’re simply suffering with debt that has necessitated those you owe to call debt collectors on you, the threat of losing your home is one of the scariest situations you can find yourself in. Your home is an asset that’s worth far more than its material value – you’ve invested your heart and soul in it and settled down to live within its walls for the long term. So, this article aims to help you protect your home – even when your debts are rising, and you feel out of control.

Stopping the Debt

Speak with Those You Owe

If you are in a tight financial situation and you’re struggling to see a way out of your current predicament, a good course of action – if you’re able to get in touch – is to speak directly to those that you owe. Avoiding the issue can only get you so far while being honest and up-front can win you a little more time.

Whether you’re contacting a lender or an individual, set up a phone call, to be honest with them about your situation, and outline how you intend to pay them back. This honesty and how you’re handling your debt issue will impress those that you owe, ensuring that you’re at least outlining how you intend to deal with your debt.

Stopping the Debt Collectors

Remember that the chief reason you’re dealing with your debts is to free yourself from the anxiety that debt can bring. But a secondary reason – and the important one for you and your family’s stability – is to keep your home from the debt collectors. You need to stop them before they attempt to acquire your home.

Often, debt collectors are bullish, and they frequently break the law in their follow-ups on the phone, by post, over email, or at your door. In these cases, you have the right to launch a lawsuit against them. You can protect yourself from an unfair debt lawsuit by finding lawyers to represent you and your family and to help keep those debt collectors at the door, instead of inside your home.

Dealing with Your Debt

To avoid your home being taken from you in the event of spiraling debts, you need to start dealing with them as soon as possible. This involves drawing up a plan of action and setting yourself some savings targets to get you closer to the black and further from the red in your bank account. It’s also a chance to set up a personal budget.

Budgeting is an important part of your financial health and can enable you to take full control of your ins and outs, ensuring that you’re always earning more than you’re spending. Given this control over your incomings and your expenditure, you’ll be able to meet the objectives that you set, paying off your debts as you do so.

Keeping your home through a debt crisis is one of the most important priorities for you and your family – so these tips should help you maintain your ownership of your home, come hell or high weather.

Could a Debt Management Plan Clear Your Debt Issues?

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Many people face debt problem at different instances of their life. Some even get harassed by the situation and end up having hard and difficult times. Generally, people having a problem with debt do feel that collectors are out there who harass you day and night. Since they seem to be merciless because their earnings depend on how much they collect from you; as such they want to transfer as much money from your pocket to theirs. However, the end isn’t at this, you can come across many debt management plans which can actually sort out your issues and render you much relief that you’ll truly be satisfied with peace.

The options

As you look forth, you can seek options to handle issues with debts which can even solve big problems. Since people can either declare a bankruptcy or pay it off, however, many chose the bankruptcy option. They come through ethical issues that involve in embracing a fresh start. But for those when amount boils down, when they handle the credits irresponsibly, it gets binds them to the lurch.

Debt Management Plan

The responsible alternatives

Now debt management plan is much more effective and works ethical decision in a responsible alternative or ethical way to handle big debt. Prior to creating any debt management plan or otherwise negotiating with the creditors personally, many people look for consumer credit counseling agency. These agencies are easy to find and you could possibly get hold of many in your city. In case you don’t find them in your nearby location, you can find one over the internet. However, you need to keep in mind that the agencies you are looking for don’t turn out to be fraudulent as many are basically scams. You should not sign up with them until you’ve done your due diligence and ensured them under reputable and good rated Business Bureau.

Debt management equals debt consolation

A debt management plan through credit counseling agencies will always provide you consolidated ways to clear your debts. Since there are counselors who will help you develop debt management plan by reviewing your finances and then will negotiate with the creditors, thus your interest rates will anyhow get reduced. Again, if your counselor turns out to be successful and your creditor agrees with the payment plans, your debts will be consolidated and so there will be no necessity to pay your creditors. Instead, you require sending a payment every month to the credit counseling agency until you’ve completed the debt management plan.

The good news of a debt management plan

One of the biggest upside to a debt management plan is that you’ll have a low monthly payment than at present. Also, since you’ll have that one payment each month, you need not have to worry about every payment or regarding the amounts needed to pay on each of them and their dates. This brings your life to be less stressful and lets you enjoy all over all again having a peaceful mind.

The bad news of a debt management plan

One of the bad news that almost every debt management plan has it that it might take up to five years to complete it since this is quite a long-term commitment. As such you’ll have to surrender your credit cards and ensure them that you’re not revolving debt during that duration of time. This plan rarely works unless you create and stick to a budget and learn about improving your monetary skills. At last, you have to make a payment every month over timely frame otherwise the plan might get canceled and you’ve to end up in worse trouble than where you’d started.

A better alternative

Many people choose debt settlement as a far better alternative to a debt management plan. Now, there are various reasons associated with this and seems to be more of an ethical and realistic alternative to fill the bankruptcy even costing less than credit counseling services or debt consolation loans. These days many families have become aware and debt free with a payment plan which they can afford easily. They have embraced this change which quickly and very effectively work them to calculate and bring them to a stress-free stage and even burden less.

Choosing a debt settlement company

Long back when internet usage seemed to remain far from the modernistic world, many debt settlement companies charged big upfront fees and were failing to deliver their promises. This made them close their shop and reappear in a few months under a different name. So, you need to be very careful when choosing for any debt settlement company. Below here are mentioned a few of the criteria which can be used to evaluate a debt settlement company.

  • Does it belong to the Better Business Bureau? What is its rating?
  • Has it been in business for more than 5 years?
  • Does it have a lot of online reviews?
  • Does it not charge any upfront fees?
  • Are its counselors friendly and could help you instead of on just selling their service?

If you’ve gathered all the answers to these questions and have come up with a “yes statement”, you’ve probably found a good, ethical and reputable debt settlement company to help you out.

Debt and the Affect It Has On People

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The problem of debt is something that everyone may be familiar with. In which case, everybody may be able to relate when we say that debt can take a toll on an individual’s life. It is the thought that keeps sinking in about how you are in a big trouble with your credit and you cannot think of a way to solve the problem.

When you are preoccupied with such negative thoughts, the more difficult you find to focus on finding an effective solution.

There have been a couple of studies conducted about how money credit trouble affects people. It has been determined that this particular problem can create or start a series of troubles in a person’s life.

Out Of Debt

One, with debt, a person’s life becomes miserable.

The negative effects of credit problems start in the person’s stress about possibly being harassed by the people he owes money too. When you are in debt and you have constantly failed to settle your regular monthly payments then you should expect your creditors to ring you a couple of times and send their threats of taking legal action if they do not get paid. Such demands can make a person fearsome. And it can lead to serious psychological effects.

Two, a person in debt becomes ignominious or disgraceful.

Rarely anyone heavy in debt would like to share their story of failure. As a matter of fact, it is something to be ashamed about. At least that is what most people think and feel.

Three, people who are ashamed of revealing their miserable financial situations become forced to hide it.

And it is not only because they want to make an effort to preserve their pride and dignity. They also fear what other people think especially the people that matter in their lives not only in their social scene but also in the professional arena.

Employers look into their prospective employee’s records completely. Just imagine how frustrating it can be to lose a job opportunity you are extremely qualified for but failed miserably in the financial aspect of a background check. And it is a cycle. Naturally, a person with debts to pay would need an income and a job to earn it but if he is denied the opportunity to make a living then the more he comes burned with credit and the shame and misery that come with it.

Four, a person with a bad credit record will suffer greatly in terms of his standing with financial institution. His chances of getting a loan again will be compromised due to the credit he failed to duly settle.

Fifth, every year, hundreds of people commit suicide because of their inability to repay their debt which they have taken. Moreover a person’s private, social and professional relationships gets affected due to his inability to repay the loan . In such cases, instead of committing suicide, people should focus on the brighter sides of life and be optimistic.

Relationships also become sour with marriages getting broken due to debt and ending in divorce. A happily married couple can find themselves in a very miserable state -of-affairs caused by undue spending by either spouse or by the husband and even both. As a result, the blame game starts.

On the professional side, jobs disappear with mounting pressure of bills, rents etc.

Sixth, a defaulter often suffers from emotional collapse owing to his inability to repay back the loans he has taken. He/she becomes fed up with threatening phone calls and e-mails from the creditors.Some people become so scared that they end up selling their precious house and cars. Property eviction can escalate into legal hazards often burdening the treasury in the form of court charges.

Seventh, escalating loans can compel a person to go bankrupt. The consequences of bankruptcy can be harsh and keep you jobless in the future. Bankruptcy is a serious financial repercussion of debt and can pave the way for a dark future for the defaulter.

But more than this, it has been found out that an individual who is in trouble with his creditors tends to jeopardize his life entirely. And this includes his personal, social and professional relationships which is indeed unfortunate. However, people in a similar situation should also realize that there is a solution to every problem even with debt and it always helps to look at the brighter side of things.

Save money and get out of debt – Think out of the box with 6 tips

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It’s rather common to wish to get wealthier with every passing day. However, one of the major differences between all those who’re actually wealthy and those who’re not is pretty basic. It’s more like the wealthy are the people who essentially earn interest, whereas the rest are busy paying interest or perhaps even seeking debt relief. This is obvious as the more interest you keep accumulating against you, the higher are your chances of going down the debt whirlpool.

Save money

So, you must be wondering that wherein lies the key to financial bliss. Firstly, it’s rather important for you to realize that money is the most effective tool that can ideally help you reach your goals. True financial independence calls for you to make money begin working for you. Moreover, as soon as that happens, you’ll not only be able to get out of debt, but also build yourself a solid financial foundation for your future.

Tips to save money which you thought wouldn’t work

Basically, the trick doesn’t lie in saving money itself. It’s more about making those things work which you initially thought wouldn’t. Now, if you’re looking for ways to get out of debt, then it’s high time to take immediate action. Read on to find out how you can do so.

Be easy and focused: The very first thing that most don’t think can work is to be as easy and relaxed as possible regarding saving money. What’s actually important is the focus bit. Getting tensed and panicking unnecessarily won’t get you anywhere and neither will your finances benefit from it. You need to go about everything easily because the more you force yourself at something, the tougher it’ll get.

Simple steps make the difference: Believe it or not, but it’s the small and simple steps that can make a major difference to your financial situation. Hence, don’t ignore that 1 dollar. Put it aside for you never know what they can finally amount to be.

Set yourself time limits: Simply deciding that you’ll do something or take a certain step doesn’t really go a long way. You’ve got to put a time cap on all your decisions. Most don’t realize the worth of time especially as far as finances are concerned. For instance, you decide to clear your debt on a particular credit card. In that case, simply deciding doesn’t really go a long way because with increasing time that so-called payable credit card debt is going to take on unmanageable proportions. Set yourself a time limit and work towards paying off that particular debt by then.

Try and be organized: No matter how busy you’re, good finances always call for organization. If you don’t know what all your outstanding debts are in the first case, then there’s no point in looking for debt relief. Get all your papers in order and know how much you owe and to whom. Most importantly, you should also know things like what exactly is needed for your everyday life. Unless you’re accurate about these things, it’s more than expected that you’ll land up spending more than required.

Try being innovative with your house: There are so many things all around you that you might be overlooking. Get yourself working and have a close look all around and see where exactly you can save money. For instance, when it comes to your house, then you could try some measures like say weather stripping. It’s rather easy to install and it can make a great difference in helping to keep out drafts. You could also insulate outlets and light switches also. People often forget that these are sources of air leaks. Steps like these will prove friendly to your pocket.

Make money with unused stuff: It might seem weird, but it’s surely worth giving a thought. You must’ve ignored or in fact not even spared a thought to what that clutter you’ve got could do for your finances. There are loads of opportunities online which you could make use of by selling those old books instead of letting them turn yellow, you could sell off electronics stuff instead of letting them rust. Or easier still, you can sell them all off at your nearest thrift store.

Keep in mind the tips discussed above and make use of the money that you make towards getting debt relief for yourself. Be alert and innovative and your finances are bound to get better with every passing day undoubtedly.

How to Deal with Creditors’ Calls

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You’ve stopped answering your phone. You’ve cut it off even. You just can’t take the creditors telling you that you owe them more money. What will you do? How do you even start discussing debt settlement negotiations if someone harassing and nagging you time and over again?!

Well, there is a way to handle such negotiations. While most people are unaware of how to negotiate with creditors and deal with those harassing calls, let me tell you that it is quite easy to handle that. And if politeness doesn’t work, you can also take legal steps to deal with the same (legal actions are discussed in this blog).

Now it’s time to take control of the situation and get those creditors’ off your back.

Creditors

Any money is good for them

Creditors know that you can’t pay your bills. They wouldn’t be calling if you paid your bills. So, when they call, talk to them about how bad your situation really is, and then ask if you can send in a certain amount.

The amount you tell them might not make them happy, but they will enter into the computer that you said you would be sending in some money, which makes them stop calling for at least the rest of the month. Just be sure to send the amount you promise them.

Be polite, no matter how rude they are

While creditors aren’t supposed to be mean to you on the phone, some of them can’t help it. They hate to call number after number being hung up on or shouted at for eight hours a day. You don’t have to give them sympathies, but do remember that their job is difficult, and all they are doing is trying to get the company they work for the money they deserve.

Speak to the creditors clearly and politely. It will take you a long way in easy and quick debt settlement negotiations. Tell them that you know that you are behind on bills and that you really wish you were in a different financial position. Ask the person if there is any way that he or she can help you. People naturally want to help, so this invites them to do exactly what they want to do.

If the creditor is extremely rude to you, don’t be shy to ask for respect. Explain that you know his or her job is difficult, but you will not tolerate being treated so poorly.

Ask for a supervisor for assistance

If you can’t get the creditor on the other line to help you at all, ask to speak to a supervisor. Often times, the person with the most power in the office can give you the power of control over your debt settlement negotiations.

Ask the supervisor how you can get a payment plan that works for you. You may even mention that if you were able to reduce your debt by as much as 10 percent, you may be able to pay on it much more easily. The supervisor may just surprise you with a debt settlement that will get those creditors to stop calling.

The more you avoid, the more they’ll call you

You may not want to deal with creditors, but dealing with them is the only way to get them to stop calling you. They want to talk to you, and they will not stop before they do. So, just pick up the phone and face it. You’ll find that it’s not as bad as you think it will be, and you may just end up feeling as though you’re gaining control of your finances

How to negotiate with creditors from a legal aspect:

If you are unable to work out a debt settlement negotiation deal with your creditor and he/she continues to nag you for payments, it’s time to take them legally. There are ways you can turn to legal divisions for assistance-

    • Write a formal letter requesting the collector to stop contacting you. According to the Fair Debt Collection Practices Act (FDCPA), debt collection agencies and attorneys have no choice but to stop contacting you after you write out a formal request letter to the board.
    • Make sure to include any illegal/inappropriate actions and comments in this letter by your collector.
    • If the situation is too bad to handle, you can hire a lawyer who can raise legal issues and claims against the collector. The lawyer will act from your side and communicate on your behalf with the collector, as per the FDCPA.
    • Refer to FDCPA guidelines to understand what’s allowed and what’s not accepted in this entire debt settlement negotiation process, either by your collector or you. There are definitely do’s and don’ts, which you must be aware of.

Conclusion:

To close your debt settlement negotiations in a polite way, always remember to address all issues with your collector before the harassment level goes out of hand. If you’re unable to pay, consider how to negotiate with your creditor and how you can address the issue in a better and clear manner. But ensure that you are not taken for granted by creditors due to your polite behavior.

Debt – Dealing With Them Without Any Hassles

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Debt is never a problem if you have the right strategy to deal with them. Debt takes very less time to reach to levels where it get out of manageable limits. The best way to control it is to keep a tab on your spending and divert your savings into paying off your debts.

Debt Hassles

Debt has become serious with the economic crisis. There are a lot of people who have build debts to the level where the economic crisis has made it difficult to impossible for them to repay their debts. This is more owing to the fact that people are more into living a lifestyle wherein they are forced to live a life of paycheck to paycheck. This means that they cannot withstand even a partial pay cut. A major portion of their salaries simply goes into paying their debts. This is really a difficult situation and one has to take steps to keep a close look on their debts.

There are situations when you face problems like paying your bills; your account has been transferred to your debt collectors, receiving notice from your creditors to finish off your pending debt etc. This is the most common situation which is suffered by most of the people now. Facing financial crisis once in a life time is sure of getting ill or losing your job etc. But if you get careful then you can manage your finances so well that you can cope up with these problems.

If you are facing financial problems then you should help yourself by making a proper budget for your expenses and income by taking help of credit counseling, debt relief services, debt consolidation or reputed debt settlement agencies.

There are people who get confused about which option will be better for them to cope up with their debt. The method which is beneficial for you is known by the level of debt you are in and your future plans to cope up with these debts.

Developing a Budget

The first step to cope up with your debt is to make a proper budget of your expenditure from your income. Make a full list of your necessary expenditures like paying toward your home personal loans for people with bad credit, car loan, insurance premiums, grocery expenditures, utility bills, entertainment and all other. Then make a priority list among these expenditures and eliminate unnecessary things like entertainment and clothing expenditures. The main reason for making a budget is to use all your money in expending wisely.

Contacting Your Creditors

If you are facing problem in paying your debt amount then you should immediately contact your creditor informing about your genuine problem for not paying toward your loan amount. This will keep you in good faith and then your creditor will modify your repayment method so that you can pay toward your loan easily.

Dealing with Debt Collectors

Some creditors appoint debt collectors to deal with people regarding repayment collection. These debt collectors may harass you by calling and disturbing you, using bad languages. But according to federal law, the debt collector has some limitations like they are not allowed to call you in your working hours, or they cannot come to your office, they are not even allowed to call you after 9 pm. And if you are facing these troubles then you may file a complaint against them.

Debt Relief Services

If you are facing problems in paying off your credit card dues or any other dues and then you can’t make a repayment plan for creditor then contact debt relief services like debt settlement or credit counseling. They will help you by suggesting how to manage your finances in such a way that you can easily cope up with your debt.

But it is important to contact good debt relief agencies. This you can know by taking help of your state attorney general or by local consumer protection agency where you can find all records of these agencies that whether any person have lodged any complaint against this firm.

It is important to do some research before taking help of these agencies. Find out what are the services provided by them, and whether these services are helpful to you, the cost charged by them, and the time duration they’ll take to get results. Make a proper written contact with each and every point with them.

Credit Counseling

A credit counseling organization helps you in managing your income and debts. They guide you by making a budget of your expenditures so that you can save money and pay more toward your debt. These counselors are well trained and skilled in managing customer’s debt, credit, money and budget. They first know all your problems and expenditures by discussing each and every fact and then make a proper plan for helping you to cope up with your debt.

These credit counselors work on non-profit basis and give their services online, phones or by their local offices. It is better to take the help of these counselors personally by meeting them. They are easily approachable as many universities, credit unions, military bases, branches of U.S cooperative extension service and housing authorities operate counseling services.

But non-profit organizations don’t mean that their services are for free. They charge high fees for giving their services to you which they don’t mention initially and charge from you later.

Debt Management Plans

If you are in deep financial problem which is not easily handled by suggestions provided by credit counselor then they will refer you to debt management plan (DMP). These debt management plans help you to cope up with your debt by facing your creditors on your behalf. But a person should not approach these debt management plans to unless a reputed credit counseling firm has not referred you to do so.

In a debt management plan, you submit some amount of money each month and then this money are utilized by DMP to pay toward your unsecured debts like medical bills, student loans, credit card bills according to the schedule created by DMP and creditors. DMP may deal with your creditor in such a way that he may agree to lower down interest rate and unnecessary fees so that you can pay your debt easily.

Coping with your debt is not so difficult if you are smart enough to manage your finances and make wise decisions regarding your repayment plans. What most of the fail to understand is that the best way to minimize debt is to stop taking any new loans and building debt. Whatever debt you already have needs your attention and you need to be aware of the correct status of the debts at every point so that you can take proper steps to deal with them accurately.

Consider Tax Refunds as Effective Means of Getting Out of Debt

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Many financial advisers and entities go out of their way just to help people know how to use tax refunds for effective debt settlement. Indeed, tax refunds are money that you can use to settle your existing loans, credits, and other forms of debts.

Consider Tax Refunds

However, the first thing that you must remember is that tax refunds are not money that just popped out of nowhere. They are money that you own; it’s cash of a certain amount that’s returned to you – mainly because you overpaid the government. Usually, the amount of refund that you might find in your check is in the vicinity of US$2,000 to US$2,500.

Here are tips and tricks on how to use tax refunds in solving your debt problem:

Avoid over-payment

First of all, make sure that you have no unusual deductions for the current year and hopefully in the future. If you have confirmed that this is so, you must change your with holdings in order to avoid doing over-payment. In the first place, you don’t want to give away your money and have anyone hold on to it for a year without the money earning some interest. It’s just an absurd thing to happen, don’t you think?

Make a correct adjustment

Calculate the adjustment in an easy manner, and this is by taking your tax refund amount and having it divided into 12. Adjust with holdings appropriately; which can be done through the help of your office’s payroll department. As this figure is adjusted, this can offer you a few hundred dollars of extra money a month that you can spend to pay off any of your existing debt; such as credit cards, car and student loans, among many others.

Now that proper adjustments are done for the future year, you can now focus on the right way of dealing with your tax refund that’s forthcoming.

Settle credit card debt

Most of us possess credit card debt. If you have one, settle it immediately. A $2,500 amount on credit card balance at 18% interest while doing minimum payments will require you 14 to 32 years to settle it completely. Others might want to use the refund however on financially rewarding endeavors other than reducing or even eliminating their debt.

What if you invest instead?

For instance, you might want to invest the money instead; insisting that you will just obtain the payment to your credit card debt from the returns that you will earn from your $2,500 investment. To be fair enough, let’s examine this route and find out if it is indeed a wiser way of using your tax refund.

This is actually a good investment if you will obtain the return that you need in order to fully pay your monthly credit card debt. However, for a $2,500 investment, you will need an investment scheme that will deliver 25 to 35% after-tax return for you to come up with the money to pay your debt.

However, if you use the tax refund to pay off the $2,500 debt on your credit card, and use the monthly payments that you waste on minimum payments and simply invest them during the same period of 14 to 32 years, such an investment will grow to a maximum of $175,000.

Now, it is a fact that most of us have more than $2,500 debt in credit cards. Apart from this, we also have to deal with student loans, car payment, and many others. Hence, as soon as you have made the right adjustment on the tax amount that’s withheld from your salary, use this amount to settle your most important debt. Pay off debt first before you even try to go to any financial ventures such as an investment.

And since, your tax return can’t do everything in terms of paying all your debts, it is advisable to seek professional advice – whether you obtain credit counsel or take advantage of a debt relief program. There are numerous debt management and relief options available, but the important thing is that you must act fast and promptly – to make things happen.