You might have heard the rumors about credit debt forgiveness, and the odds are very good that if you are over your head in credit card debt, this is a bit of information you are dying to find out more about. After all, why would any kind of creditor actually consider forgiving part of a legally owed debt? Read on and you may be surprised to learn that you, too, qualify for credit debt forgiveness.
In these tough economic times, financial analysts are taking a good look at the various means for helping affected debtors. They found that about 40% of American credit card indebtedness actually qualifies for credit debt forgiveness. This can offer a once in a lifetimes opportunity to someone who is barely hanging on financially! Imagine seeing your credit card debt drastically reduced, fees waived, and interest rates lowered. This can impact your monthly cash flow to once again allow you to pay your bills one time every month.
Lest you believe that credit card companies are offering this kind of credit debt forgiveness out of altruistic reasons, keep in mind that these banks realize that failure to work with debtors may result in a spike in consumer bankruptcies. In some cases, this results in huge chunks of missed revenue. Counteracting this trend, the banks have begun working with consumers to lower their payments and balances, and in return receive at least some of the outstanding money. Of course, in some cases consumers still have a hard time working with the banks and as such they might initially be somewhat frustrated.
With the recent publication of Financial Services Roundtable findings that advocated credit debt forgiveness for select consumers, debt settlement agencies have reported a heightened number of consumers seeking out the assistance of skilled debt negotiators. The plan details are enticing: a five year window in which to pay off the debt and even tax exemption of the forgiven funds are but some of the details that make this very attractive to consumers. Those who want to take advantage of these new rules should contact credit counselors immediately to secure their very own credit debt forgiveness.
Some consumers report that they receive forgiveness of about 20% of their credit debt, while others come in at 40%. Only a credit counselor can take stock of your entire fiscal portfolio and compare it to the industry standards. Best of all, after inventorying all of the debts and also income, you have a clear picture of your overall financial health and also have the opportunity to chart a course to financial freedom.
Make no mistake: the time to investigate and apply for credit debt forgiveness is now, with banks projecting losses of more than $1 billion each because of defaulting consumers. There is a lot of motivation to push through generous debt forgiveness packages, and consumers find that what might not have been approved a few short years ago, now might actually find speedy and complete approval. Is it not time to get your own personal bailout?
To learn more about credit card debt forgiveness, you can visit our site, http://www.Debt-Settlement411.com.
Wednesday, June 3, 2009
Monday, May 18, 2009
The Secrets Of Fico Scores And Credit Repair Revealed
The number of Americans that have either worsening credit ratings or destroyed ones is sadly skyrocketing, and the bad news is that the state of affairs is unlikely to improve for at least several more months.
There is a chink of light at the end of the present economic black hole though, and that ray of light is already causing many people to consider credit repair, and there is some good news for them.
If you're really determined to start fixing your FICO score (Fair Isaac Corporation), then the good news is that the thing that will most quickly cause an upward tick in your rating is arguably the easiest thing to implement.
Credit rating agencies maintain a record of everyone's debt to credit ratio, and looked at through their eyes it looks similar to this.
50% and above is considered high-risk. 43%-49% is borderline and signifies likely financial trouble. 37%-42% means that the person needs to reduce their debts. 36% or less and you look really great.
So how do you discover what your debt to credit ratio is?
Very easily, because credit reports from the three leading credit rating agencies, Equifax, TransUnion, and Experian now include it.
If you'd like to get a quick idea of what yours probably looks like then the way that it's arrived at is as follows.
You have for example, a balance of $3,500 on a credit card with a $9,000 credit limit then the calculation is as follows, $3,500 divided by 9,000 and multiplied by 100 = 38.88%
However, since you most likely have several credit cards, along with other debts, you'd have to apply the above formula to all of them, so I'd suggest just waiting for your credit reports to arrive, because in order to improve your credit rating you're going to need them anyway.
Before getting into the steps that are necessary to repair a credit rating, it might be worth noting that the credit agencies also take into account a person's debt-to-income ratio, and the method they use for that is;
(MDP) Monthly Debt Payments = $ 950 (credit cards, car loan, personal loan) (MTHI) Monthly Take-Home Income = $3,400 (employment income) $950 divided by $3,400 multiplied by 100 = 27.94.57%
Higher than 35% is high risk. 21% - 35% is risky. 10% - 20% and you're probably good for future credit. 10% or less and every lender will welcome you with open arms.
OK, if you haven't got current copies of your credit reports from TransUnion, Equifax and Experian in front of you then tut tut, because you should already be checking them on a regular basis, if for no other reason than that, difficult as it might be to believe, a full 1/3 of them not only contain errors, but they're often serious ones to boot.
Whether or not you have your credit reports, they will be almost useless they contain your 'credit scores', so if they don't contain them then please ask for another copy that does includes them, and you shouldn't be charged a second time.
It's now time to check your FICO score, because what you'll need to do next will depend on what you find there.
If you see the number ..
700 or higher then stop reading and take a long and well deserved vacation.
680 to 699 - you're looked at favorably and a loan won't cost you an arm and a leg.
620 to 679 - you're a good guy or gal, but you'll pay high interest if you want to borrow.
580 to 619 - Banks and lenders think you're great and they're hoping you'll contact them immediately!
Yes, you read that right!
You're not in really serious trouble yet, so they will lend you money and charge you an enormous amount of interest, and rake in a lot of commission as well.
500 to 579 - You smell bad! You'll get a loan, but will get crucified!
Most people reading this will most likely get the above score, and the bad and the good news is that you should apply for a loan.
You'll get screwed but if you pay it back on time, then you're credit rating will improve by leaps and bounds.
499 and below ..
This is the worst news, and we need to fix your credit rating right away, because nobody will lend or rent you anything.
43%-49% is on the edge, and indicates looming financial trouble!
Not so difficult?
Just do the following ?
1) Check your credit report and if you find errors then dispute them, and don't forget to include any documents that prove the error. Send your letter and documents by registered mail and be aware that the corrections to your report won't cost you anything.
2) If you have credit cards from companies like Lowes, JC Penny, and Sears etc. then try to get rid of them in any way that you can because they damage your credit rating far more than Visa and Master Card do.
3) Contact all of the companies that you owe money to that have restricted an account, and tell them that you're going to start paying down your balance. Reduce the amount that you owe them by as much as possible each month and remember that consistency and not speed is important; so do it at a pace that is comfortable and maintainable.
4) After you've reduced the amount for a few months, even by a little, contact them and ask if you can have your account reactivated. If they say "yes", then you're already on the home stretch because this will affect your credit rating more than anything else!
After you feel that your credit score has improved somewhat, please check your credit rating online before you apply for any new loans, and tell the lender clearly and plainly, "this is my credit rating at the moment", and ask, "Will I get approved?".
What you don't want appearing on your credit report at this point, is refused credit comments.
Hopefully what's written here will have helped you understand the credit rating system, and will also help you return your credit score to what it once was - or even, wasn't.
The author of this article was a top film sound editor for many years and he produced a film for Columbia at a very young age. He has long been interested in finance and economics, and one of his websites -> http://home-loan-help.org/ is for folks that need $1000 - $5000 quickly, with most applicants getting their money within 48 hours.
There is a chink of light at the end of the present economic black hole though, and that ray of light is already causing many people to consider credit repair, and there is some good news for them.
If you're really determined to start fixing your FICO score (Fair Isaac Corporation), then the good news is that the thing that will most quickly cause an upward tick in your rating is arguably the easiest thing to implement.
Credit rating agencies maintain a record of everyone's debt to credit ratio, and looked at through their eyes it looks similar to this.
50% and above is considered high-risk. 43%-49% is borderline and signifies likely financial trouble. 37%-42% means that the person needs to reduce their debts. 36% or less and you look really great.
So how do you discover what your debt to credit ratio is?
Very easily, because credit reports from the three leading credit rating agencies, Equifax, TransUnion, and Experian now include it.
If you'd like to get a quick idea of what yours probably looks like then the way that it's arrived at is as follows.
You have for example, a balance of $3,500 on a credit card with a $9,000 credit limit then the calculation is as follows, $3,500 divided by 9,000 and multiplied by 100 = 38.88%
However, since you most likely have several credit cards, along with other debts, you'd have to apply the above formula to all of them, so I'd suggest just waiting for your credit reports to arrive, because in order to improve your credit rating you're going to need them anyway.
Before getting into the steps that are necessary to repair a credit rating, it might be worth noting that the credit agencies also take into account a person's debt-to-income ratio, and the method they use for that is;
(MDP) Monthly Debt Payments = $ 950 (credit cards, car loan, personal loan) (MTHI) Monthly Take-Home Income = $3,400 (employment income) $950 divided by $3,400 multiplied by 100 = 27.94.57%
Higher than 35% is high risk. 21% - 35% is risky. 10% - 20% and you're probably good for future credit. 10% or less and every lender will welcome you with open arms.
OK, if you haven't got current copies of your credit reports from TransUnion, Equifax and Experian in front of you then tut tut, because you should already be checking them on a regular basis, if for no other reason than that, difficult as it might be to believe, a full 1/3 of them not only contain errors, but they're often serious ones to boot.
Whether or not you have your credit reports, they will be almost useless they contain your 'credit scores', so if they don't contain them then please ask for another copy that does includes them, and you shouldn't be charged a second time.
It's now time to check your FICO score, because what you'll need to do next will depend on what you find there.
If you see the number ..
700 or higher then stop reading and take a long and well deserved vacation.
680 to 699 - you're looked at favorably and a loan won't cost you an arm and a leg.
620 to 679 - you're a good guy or gal, but you'll pay high interest if you want to borrow.
580 to 619 - Banks and lenders think you're great and they're hoping you'll contact them immediately!
Yes, you read that right!
You're not in really serious trouble yet, so they will lend you money and charge you an enormous amount of interest, and rake in a lot of commission as well.
500 to 579 - You smell bad! You'll get a loan, but will get crucified!
Most people reading this will most likely get the above score, and the bad and the good news is that you should apply for a loan.
You'll get screwed but if you pay it back on time, then you're credit rating will improve by leaps and bounds.
499 and below ..
This is the worst news, and we need to fix your credit rating right away, because nobody will lend or rent you anything.
43%-49% is on the edge, and indicates looming financial trouble!
Not so difficult?
Just do the following ?
1) Check your credit report and if you find errors then dispute them, and don't forget to include any documents that prove the error. Send your letter and documents by registered mail and be aware that the corrections to your report won't cost you anything.
2) If you have credit cards from companies like Lowes, JC Penny, and Sears etc. then try to get rid of them in any way that you can because they damage your credit rating far more than Visa and Master Card do.
3) Contact all of the companies that you owe money to that have restricted an account, and tell them that you're going to start paying down your balance. Reduce the amount that you owe them by as much as possible each month and remember that consistency and not speed is important; so do it at a pace that is comfortable and maintainable.
4) After you've reduced the amount for a few months, even by a little, contact them and ask if you can have your account reactivated. If they say "yes", then you're already on the home stretch because this will affect your credit rating more than anything else!
After you feel that your credit score has improved somewhat, please check your credit rating online before you apply for any new loans, and tell the lender clearly and plainly, "this is my credit rating at the moment", and ask, "Will I get approved?".
What you don't want appearing on your credit report at this point, is refused credit comments.
Hopefully what's written here will have helped you understand the credit rating system, and will also help you return your credit score to what it once was - or even, wasn't.
The author of this article was a top film sound editor for many years and he produced a film for Columbia at a very young age. He has long been interested in finance and economics, and one of his websites -> http://home-loan-help.org/ is for folks that need $1000 - $5000 quickly, with most applicants getting their money within 48 hours.
37 Days to Clean Credit
Given the current economic hardships, its only natural to be worried about credit ratings, late night collection phone calls and have recurring nightmares about foreclosures. The facts may be staring you right in the face but if you happen to be one of the alleged ostriches hiding its head in the sand, wishing the problem away - well, that's not going to happen anytime soon. Chances are that your late pays would have incurred additional interest and furthermore, your ratings would have hit rock bottom, while you were busy getting meshed into a debtors trap.
It is time to take come affirmative action to improve the debt situation right away before it reaches a point of no return. You may want to review the 37 days to clean credit, the debtors self help guide to getting out of a debt trap.
There are quite a few online resources that you can utilize to improve your rating before it gets to the 'bad and ugly' zone. The 37 days to clean credit does provide for tips and pointers to improve your credit rating. In addition, you may want to check out additional web resources for more information to help you tide the weather. This e-book shows you how to repair your credit and provides info on how to get approved for more loans. You may want to give the last bit a miss, as you do not want to accumulate more debts than necessary. But the credit repair info is comprehensive and shows you how to go about repairing your debt. Now, that's something that we can all use, given the current circumstances.
This book provides information on how to get improve your rating and addresses the issue of 'debts'. In addition it allegedly shows you how to delete the late pays from your file to avoiding foreclosure altogether. Some of the info contained here may be hard to believe on the first go, but once you've hit rock bottom, guess there is not much to do except to believe in the impossible.
As the title suggests, this book alleges to improve your credit rating in a matter of days. Compared to most of the other online content on the same subject, the information contained here does make sense and furthermore it shows you how to get approved for credit cards with 0% APR. I'm not sure about you but the part on getting approved for the 0% APR cards, well, I'll believe it when it happens. Anyway, this e-book is currently being offered with complimentary audios and videos, from interviews with the Brett Bruce to credit millionaire Donna Fox, the bonus products happen to compliment the book. Anyway, if you are in the market for some tips, pointers and 'how to' on beating the debtors trap, you may want to take a look at this book.
About the Author
Reuben Wallis, intrepid reviewer, has just reviewed the 37 days to clean credit. For more details and more reviews, you may want to head over to 37 days to clean credit.
It is time to take come affirmative action to improve the debt situation right away before it reaches a point of no return. You may want to review the 37 days to clean credit, the debtors self help guide to getting out of a debt trap.
There are quite a few online resources that you can utilize to improve your rating before it gets to the 'bad and ugly' zone. The 37 days to clean credit does provide for tips and pointers to improve your credit rating. In addition, you may want to check out additional web resources for more information to help you tide the weather. This e-book shows you how to repair your credit and provides info on how to get approved for more loans. You may want to give the last bit a miss, as you do not want to accumulate more debts than necessary. But the credit repair info is comprehensive and shows you how to go about repairing your debt. Now, that's something that we can all use, given the current circumstances.
This book provides information on how to get improve your rating and addresses the issue of 'debts'. In addition it allegedly shows you how to delete the late pays from your file to avoiding foreclosure altogether. Some of the info contained here may be hard to believe on the first go, but once you've hit rock bottom, guess there is not much to do except to believe in the impossible.
As the title suggests, this book alleges to improve your credit rating in a matter of days. Compared to most of the other online content on the same subject, the information contained here does make sense and furthermore it shows you how to get approved for credit cards with 0% APR. I'm not sure about you but the part on getting approved for the 0% APR cards, well, I'll believe it when it happens. Anyway, this e-book is currently being offered with complimentary audios and videos, from interviews with the Brett Bruce to credit millionaire Donna Fox, the bonus products happen to compliment the book. Anyway, if you are in the market for some tips, pointers and 'how to' on beating the debtors trap, you may want to take a look at this book.
About the Author
Reuben Wallis, intrepid reviewer, has just reviewed the 37 days to clean credit. For more details and more reviews, you may want to head over to 37 days to clean credit.
Tuesday, May 12, 2009
Want to pare down insurance costs? Things to consider before you cut
(ARA) - A shaky economy and high unemployment are leading some people to put off purchases and look for more ways to spend less.
With the Insurance Information Institute estimating a nationwide average of $764 for home insurance and $831 to insure a vehicle each year, you might be tempted to scale back. But you could pay a price later for your penny-pinching today.
Deborah Fester of QBE Regional Insurance recommends looking for savings in your policies that won’t leave you shortchanged, or even bankrupt, in the event of disasters or accidents. She says canceling insurance policies to save money is a bad idea.
“We’re seeing so many people choose to just not pay their insurance premiums because they’re strapped for cash,” says Fester. “This only makes it worse when you try to reinstate insurance after letting policies lapse. Many companies look at how long a customer has gone without insurance, and the result could be rates double or triple what they were before.”
Worse, she says, being uninsured when you’re involved in a major auto accident or your home goes up in flames can wipe you out financially.
Fester offers five tips you should discuss with your insurance agent to keep your home and vehicles protected while keeping extra cash in your pocket:
1. Bundle home and auto coverage. Ask about premium discounts for multiple policies with one company. Some insurance companies will reduce premiums by 5 to 15 percent if two or more policies are purchased.
2. Raise insurance deductibles. Raising the homeowners deductible from $500 to $1,000 could save as much as 25 percent annually, says Fester. A higher auto deductible could save 15 to 30 percent or more each year. Often this savings more than covers increased deductible costs.
3. Reduce coverage on older cars. Consider reducing or removing collision or comprehensive coverage on older or seldom-driven cars, especially if they’re worth less than 10 times the amount you’re currently paying for insurance. Fester notes it might be worth keeping the much less expensive comprehensive coverage to pay for windshield replacement or repairs.
4. Take inventory. Regularly review your possessions to make sure you’re not paying for insurance you don’t need. If you’ve sold a lot of your gold jewelry, or your antique radio collection is worth much less than it was, reduce or cancel your floater. A floater is additional insurance to pay full replacement value if the item is stolen, lost or damaged.
5. Dig for the discounts. Investigate additional discounts based on your age or employment status. Those 55 years or older and retired may qualify for up to a 10 percent discount at some insurance companies. A strong credit rating may also help lower insurance costs. “QBE always encourages people to order free credit reports each year to make sure the information is current and accurate,” says Fester. “Credit cards you don’t use should be canceled because the open line of credit counts against you.” Don’t be afraid to ask if your insurance company gives breaks for:
* Good students with a 3.0 or higher grade point average
* Taking a driver training or defensive driving course
* Low annual mileage
* Vehicle safety equipment such as anti-theft devices, air bags and daytime running lights
* Home security devices
* Hail-resistant roofs
* Updated heating or cooling systems or other home renovations
* Being a long-time customer
* Paying policies in full
Courtesy of ARAcontent
How to take charge of your debts
The rising cost of living and dying has made people more reliant on loans and credit that most people have been indebted to someone at some point in their lives. A debt is an obligation that should be paid and accounted for no matter how meager the amount.
Being in debt is normal considering that no one has a monopoly of all the money in the world. People will always have the tendency to accumulate debts no matter how rich. In fact, rich people have more debts than poor people because they have more needs and they have more collateral or security.
Being indebted isn't something that you should be ashamed of provided you are a responsible debtor. This means the money was used for a very good cause or purpose and the debtor is religious in looking after his responsibility to pay his debts.
Even a person who is savvy is financial management can get into debt for one reason or another. However, a person who is good in managing his finances should also be good in managing his debts. Managing debts would include the ability to know how much a person owes and from where he would get the money to pay such debts.
The ability to know the total indebtedness is a must in debt management because the person who is in debt is aware of the total amount he has to produce to pay off his debts. There are people who don't practice good debt management and they keep borrowing money without being able to monitor how much they already owe people or the financial institutions.
Debt management means that at the time the loan was made, the borrower knows where he would source the payment for such debt. This makes the debt manageable because it would appear that the person has some source of income and he is just not liquid at the time he borrowed the money.
People who don't have a steady source of income should be discouraged from borrowing because there is a tendency for their debts to pile up without being paid at all. Unemployed people who resort to borrowing for their essential expenses like food and daily subsistence would borrow from another creditor to pay off a debt that is already due and demandable. The same thing happens to the second and the next loans after which it becomes a cycle.
A person who is indebted to someone should take an inventory of his assets that can be used to pay off his debts. There is no problem if the debtor is looking at a possible income that hasn't yet been encashed or paid. Such unpaid income can be considered an asset which can be used to pay his debts.
Debts are easily made but they are difficult to pay. Thus, every person should be careful when borrowing money form others. Make sure that you have something to pay for the debt like an incoming income or check, or assets that can be sold to pay off the debt.
Some people get indebted by virtue of loans which have varying interest rates. This means that aside from the principal amount borrowed, the debtors still have to pay for the interest rate. A person who borrowed $100 at ten percent interest rate per month will have to pay the principal plus the interest rate of $10 per month. Some interest rates are based on the actual balance like if the debtor has already paid $20 then the interest rates would only be pegged on the balance of $80. However, there are some interest rates pegged at the original amount borrowed.
While being in debt is a natural thing, every person should learn how to manage his debt and how to stay out of debt if possible. One of the major factors why most Americans are indebted today is the misuse of credit cards.
Credit cards are those plastic cards that can be used to pay for almost any purchase even if you don't have cash. People find it easier to spend when using their cards because they just swipe it and voila----it works like a genie granting their every wish!
However, most people who fail to use their credit cards wisely become indebted and are faced with legal actions for failing to pay their cards when they become due and demandable.
Go ahead, borrow if you must but always take charge of your debts to make sure they don't lead you to declaring insolvency or bankruptcy.
Being in debt is normal considering that no one has a monopoly of all the money in the world. People will always have the tendency to accumulate debts no matter how rich. In fact, rich people have more debts than poor people because they have more needs and they have more collateral or security.
Being indebted isn't something that you should be ashamed of provided you are a responsible debtor. This means the money was used for a very good cause or purpose and the debtor is religious in looking after his responsibility to pay his debts.
Even a person who is savvy is financial management can get into debt for one reason or another. However, a person who is good in managing his finances should also be good in managing his debts. Managing debts would include the ability to know how much a person owes and from where he would get the money to pay such debts.
The ability to know the total indebtedness is a must in debt management because the person who is in debt is aware of the total amount he has to produce to pay off his debts. There are people who don't practice good debt management and they keep borrowing money without being able to monitor how much they already owe people or the financial institutions.
Debt management means that at the time the loan was made, the borrower knows where he would source the payment for such debt. This makes the debt manageable because it would appear that the person has some source of income and he is just not liquid at the time he borrowed the money.
People who don't have a steady source of income should be discouraged from borrowing because there is a tendency for their debts to pile up without being paid at all. Unemployed people who resort to borrowing for their essential expenses like food and daily subsistence would borrow from another creditor to pay off a debt that is already due and demandable. The same thing happens to the second and the next loans after which it becomes a cycle.
A person who is indebted to someone should take an inventory of his assets that can be used to pay off his debts. There is no problem if the debtor is looking at a possible income that hasn't yet been encashed or paid. Such unpaid income can be considered an asset which can be used to pay his debts.
Debts are easily made but they are difficult to pay. Thus, every person should be careful when borrowing money form others. Make sure that you have something to pay for the debt like an incoming income or check, or assets that can be sold to pay off the debt.
Some people get indebted by virtue of loans which have varying interest rates. This means that aside from the principal amount borrowed, the debtors still have to pay for the interest rate. A person who borrowed $100 at ten percent interest rate per month will have to pay the principal plus the interest rate of $10 per month. Some interest rates are based on the actual balance like if the debtor has already paid $20 then the interest rates would only be pegged on the balance of $80. However, there are some interest rates pegged at the original amount borrowed.
While being in debt is a natural thing, every person should learn how to manage his debt and how to stay out of debt if possible. One of the major factors why most Americans are indebted today is the misuse of credit cards.
Credit cards are those plastic cards that can be used to pay for almost any purchase even if you don't have cash. People find it easier to spend when using their cards because they just swipe it and voila----it works like a genie granting their every wish!
However, most people who fail to use their credit cards wisely become indebted and are faced with legal actions for failing to pay their cards when they become due and demandable.
Go ahead, borrow if you must but always take charge of your debts to make sure they don't lead you to declaring insolvency or bankruptcy.
How to Create a Budget and Manage Your Credit
No man is an island. We all need help managing our debt once-in-a-while. We’re not only referring to personal matters. We’re talking about financial matters. We reach a point where we have to buy something out of necessity, but we can’t pay in full just yet. An example of this is a home.
Now the time has come for you to repay on what you own. You must have the discipline to plan out how much you should have saved so when your time is up and you have to shell out the money you owed there and then (plus interest), you wouldn’t have a hard time doing so.
Prioritize which of the debts must be paid first. Prioritize your bills. Make a list so it would be more organized because you could see it right in front of you.
This is what you call establishing goals. Establish first what must be prioritized over those you could schedule paying some other time.
The essential debts are debts that should be on top of your list. These are
- Rent or mortgage. Of course, who in his right mind won’t pay up as soon as possible. Paying your rent or mortgage bills on time helps you have a roof over your head.
- Child support. If you don’t pay on time, there’s a possibility you can be held behind bars.
- Utility bills. As much as possible, set aside a budget on gas, heating, water, electricity or telephone when you get your paycheck. In doing so, when the bill comes, then you have something prepared.
- Car payments. This also includes car maintenance.
- Other secured loans. If you don’t repay collaterals, the creditor takes the property even without court interference.
The non-essential debts can be set aside because when these aren’t paid, they don’t have that much of a side effect. It’s a desired goal but not really a priority. The only concern that can be considered when you don’t pay non-essentials debts for a long period of time is the negative image it could project on your credit report.
- Department store and gasoline charges. Failure to pay these charges may result in losing credit card privileges. If it’s too large, you might be sued.
- Loans from friends and relatives. Morally speaking, there is an obligation to pay but sometimes since they’re family, we think that they will understand if we can’t. Check with them if you can delay the payment and ask them for how long.
- Newspaper and magazine subscriptions. Little by little, if you haven’t paid, they’ll amount to so much.
- Legal and accounting bills. If these remain unpaid after a long period of time, then that’s when you might be sued.
- Other unsecured loans. In unsecured loans, there’s no collateral for the debt. This means that the creditor can sue and then collect the debt.
Here’s the confusing part. Some of the bills border between essential and non-essential. If you let these bills defer for a long period of time, it could have consequences in your personal life.
- Auto insurance. The consequence in some states is losing your driver’s license.
- Medical insurance of bills. If you have a tainted record, you might have a hard time getting new insurance in the future.
- Credit and charge cards. If you don’t pay your bills on time, you might lose your credit privileges and would have a hard time applying for a new credit card.
Now that we laid out the groundwork on how you can prioritize which bill to pay first, we move on to having a time frame.
It’s best that you have a calendar in front of you. A palm pilot or the calendar in your Microsoft Office program will do. Mark the dates wherein you would have to pay the specific debt – be it essential or non-essential. Then what you can do is set aside the bill that is allotted for that debt.
As for the budget, prevention is always better than cure. You know how much you get in a month. That being in mind, you must allot how much percentage of your salary shall go to which. Then do your best to stick to that budget.
If this is how much you should spend for leisure, then that’s how much you should spend for leisure. If at one point, it went overboard, then there would have to be a sacrifice on another aspect, such as food. That seems off, right?
So even in budget, you must also list down which is number one for you. Have the discipline to stick to your priority, your budget and your time frame. If you succeeded, paying the bills won’t be any problem.
Now the time has come for you to repay on what you own. You must have the discipline to plan out how much you should have saved so when your time is up and you have to shell out the money you owed there and then (plus interest), you wouldn’t have a hard time doing so.
Prioritize which of the debts must be paid first. Prioritize your bills. Make a list so it would be more organized because you could see it right in front of you.
This is what you call establishing goals. Establish first what must be prioritized over those you could schedule paying some other time.
The essential debts are debts that should be on top of your list. These are
- Rent or mortgage. Of course, who in his right mind won’t pay up as soon as possible. Paying your rent or mortgage bills on time helps you have a roof over your head.
- Child support. If you don’t pay on time, there’s a possibility you can be held behind bars.
- Utility bills. As much as possible, set aside a budget on gas, heating, water, electricity or telephone when you get your paycheck. In doing so, when the bill comes, then you have something prepared.
- Car payments. This also includes car maintenance.
- Other secured loans. If you don’t repay collaterals, the creditor takes the property even without court interference.
The non-essential debts can be set aside because when these aren’t paid, they don’t have that much of a side effect. It’s a desired goal but not really a priority. The only concern that can be considered when you don’t pay non-essentials debts for a long period of time is the negative image it could project on your credit report.
- Department store and gasoline charges. Failure to pay these charges may result in losing credit card privileges. If it’s too large, you might be sued.
- Loans from friends and relatives. Morally speaking, there is an obligation to pay but sometimes since they’re family, we think that they will understand if we can’t. Check with them if you can delay the payment and ask them for how long.
- Newspaper and magazine subscriptions. Little by little, if you haven’t paid, they’ll amount to so much.
- Legal and accounting bills. If these remain unpaid after a long period of time, then that’s when you might be sued.
- Other unsecured loans. In unsecured loans, there’s no collateral for the debt. This means that the creditor can sue and then collect the debt.
Here’s the confusing part. Some of the bills border between essential and non-essential. If you let these bills defer for a long period of time, it could have consequences in your personal life.
- Auto insurance. The consequence in some states is losing your driver’s license.
- Medical insurance of bills. If you have a tainted record, you might have a hard time getting new insurance in the future.
- Credit and charge cards. If you don’t pay your bills on time, you might lose your credit privileges and would have a hard time applying for a new credit card.
Now that we laid out the groundwork on how you can prioritize which bill to pay first, we move on to having a time frame.
It’s best that you have a calendar in front of you. A palm pilot or the calendar in your Microsoft Office program will do. Mark the dates wherein you would have to pay the specific debt – be it essential or non-essential. Then what you can do is set aside the bill that is allotted for that debt.
As for the budget, prevention is always better than cure. You know how much you get in a month. That being in mind, you must allot how much percentage of your salary shall go to which. Then do your best to stick to that budget.
If this is how much you should spend for leisure, then that’s how much you should spend for leisure. If at one point, it went overboard, then there would have to be a sacrifice on another aspect, such as food. That seems off, right?
So even in budget, you must also list down which is number one for you. Have the discipline to stick to your priority, your budget and your time frame. If you succeeded, paying the bills won’t be any problem.
Monday, February 23, 2009
Tips to Get Out of Debt and Avoid Bankruptcy
(ARA) - Facing the most difficult economic conditions in decades, many Americans are sobering up to the fact that they're deeply in debt.
For many American households, extraneous spending and poor money management combined with an unforeseen event, such as a job layoff, a health crisis, divorce or a death in the family, has resulted in the perfect cocktail for financial disaster. In fact, a recent survey by FindLaw.com, the world’s leading online source for free legal information, 10 percent of Americans have considered filing for personal bankruptcy at some point in their lives.
There are several danger signs that you’re headed for financial trouble. One of the most worrisome is living paycheck to paycheck. If you are, you’re not alone. According to a 2008 survey by the American Payroll Association, 71 percent of American workers are living paycheck to paycheck.Other danger signs include:
* Making only minimum monthly payments on your credit cards
* Using a series of consolidation loans or home equity loans to pay overdue bills
* Taking out cash advances to pay other bills
* Incurring a growing number of late fees due to late bill payments
To help you get out of debt and avoid bankruptcy, here are eight tips from FindLaw.com:
Get Help Now.
You'll need willpower and a lot of support from those around you to get out of debt. For many people, having someone who can hold you accountable, as well as someone with whom you can celebrate the little victories, is essential to reaching your goal of becoming debt free. For expert help, seek the assistance of a debt management or credit counselor, which are available through many social service agencies. Try visiting the United Way at http://www.liveunited.org/ or call (888) 995-HOPE for a toll-free foreclosure prevention hotline sponsored by NeighborWorks America and the Homeownership Preservation Foundation. If you’re facing foreclosure or are wondering about declaring bankruptcy, immediately seek the counsel of an attorney specializing in debt management and bankruptcy.
Pick Up the Phone.
Don’t wait for your creditors to call you. Call them to negotiate a new payment plan that you can realistically handle. Some creditors might be willing to settle their claim with you for a smaller cash payment, or they might be willing to stretch out the term of the loan and reduce the size of the payment.
Budget Time -- Back to Basics.
Food, clothing, shelter and transportation -- focus on these basics when you start to determine which expenses are essential and which are not. Start a monthly budget by tracking your expenses against take-home pay (cash flow). Cut the non-essentials and look at how you can reduce the costs of your essential expenses. For example, stop dining out and instead take your lunches to work and make meals at home, or reduce your transportation costs by taking public transportation instead of driving to work. Likewise, start to look for opportunities to increase your income, from taking on a second job to selling household items on eBay or Craigslist.
Pay Essential Debts First.
Paying all of your debt down is important, but there are some bills that are more important the others. Go back to the basics -- mortgage, electricity, heat, water, etc. This may sound obvious, but when pressured by bill collectors, many people forget the obvious.
Don't Skip These Expenses.
Depending upon the laws in your state, there may be some expenses that you must incur, such as auto and medical insurance, student loan payments, child support payments, license fees, and of course, paying local taxes as well as state and federal income taxes. Skip any of these expenses and you may wind up with a much bigger headache.
Go Automatic.
Have your employer automatically deposit your paycheck into your bank account. But don't stop there. Arrange for the most essential bill payments -- mortgage, electricity, heat and water -- to be automatically withdrawn from your checking account. If you have a mortgage, escrow property taxes to ensure that they’re automatically paid.
Cut the Lattes and Lottery Tickets.
Now is the time to cut back on all of those little non-essentials that eat up your budget -- the lattes at your favorite coffee shop, buying lottery tickets or purchasing that mid-afternoon candy bar or soda from the company vending machine.
Beware of Credit Scams.
Beware of ads and phone calls from debt management companies that tend to target consumers with poor credit histories, promising (for a fee) to clean up your credit so you can get a car loan, a home mortgage, insurance or even a job. The telltale sign that it’s a scam is if the company demands payment up front for their services.
For more information about getting out of debt and avoiding bankruptcy, visit http://www.findlaw.com/.
Courtesy of ARAcontent
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