Friday, February 17, 2006 marked the first of a multi-part series for The Oprah Winfrey Show, where Oprah challenged Americans to get out of debt. Oprah teamed up with three of the nations top financial experts to create a step-by-step action plan to show her viewers how to get out of debt. Oprah featured Jean Chatzky, Glinda Bridgforth, David Bach as her top financial experts.Oprah compared Americas over-spending habits to our similar over-eating habits. She showed how compulsive spending is much like compulsive eating and how America doesn’t just have a high rate of obesity in our body, but obesity in our debt.

Oprah featured three families that were suffering from their high debt. First, there was the Widlund’s, who had the lowest annual income at over $75,000 and $81,000 in debt! Then there was the Eggleston’s, making about $92,000 a year and with $115,000 in debt. And the Bradley’s topped it off with over $100,000 a year income and $170,000 in debt.

The Four Steps of the Debt Diet, WITH some Special “Secret Sauce” added… Enjoy!

Debt Diet Step 1: How much debt do you really have?

Calculate how much debt you really have so you can begin paying it down.

Often times many people do not even know how much debt they really have. This is an important step to getting your debt under control.

It’s a good idea to run a three-in-one credit report. A three-in-one credit report is a combined credit report from each of the three credit bureaus (Experian, Equifax, and TranUnion). Whether you regularly get monthly statements or not, running this kind of credit report will show you any old debts that you still may owe, along with anything that may be being reported to the bureaus for which you may not be responsible.

Special “Secret Sauce” for Step 1 of the Debt Diet: What “kind” is just as important as how much…

Knowing your “Point A”, your “current reality” or where you’re starting from IS the best place to start. If you were driving to New York, how would you know where to go if you didn’t know where you were starting from?

…But knowing how much debt you have is only one side of the coin.The other side of the coin is knowing what kind of debt you have.

Knowing how much of each type of debt you have will make a HUGE difference in understanding which options are available to you, AND how each option will impact you.

TAKE ACTION!

Organize your debt into these categories:

o Secured Debt – This includes any debt secured by a title or asset, like a house, car, motorcycle, boat, RV, etc. This may also include dirt bikes, quads, jewelry, or furniture.

o “Qualified” Unsecured Debt – This includes all unsecured debt (debt NOT secured by a title or asset) that may qualify for debt management programs such as credit counseling, debt negotiation/settlement or other debt management programs.

Qualified unsecured debt includes credit cards, personal loans, credit unions, hospital & medical bills, collection accounts, and deficiency balances.

Some examples of unsecured debt that is not qualified for debt management programs are payday loans, cash advances, MAC tools, Military accounts (Star, Omni, etc.), public utilities, personal loans from family or friends, and student loans.

o Other Unsecured Debt – All unsecured debt “not included” above

o Student Loan Debt – Self explanatory.

o Tax Debt – Any debts owed to the IRS or State TAX authority.

Once you know how much of each kind of debt you have, document it and keep it handy. If your situation changes, update your info and keep it current.

Debt Diet Step 2: Track your spending and find extra money to pay down the debt.

Cut back on daily extras and find savings where you least expect them.

Track Your Spending:

This is a multi-part step. The first part is to track your spending. Track each and every penny that you spend, whether it’s food, coffee, gum, bills, etc., track it and write it down for review.

This alone can be very powerful. It can show you just how much of your money is eaten up on the little things. This is what one of Oprah Experts refer to as the “Latté Factor®.” Say you buy a latté every day… after all, it’s just $5, right? But added to the soda each day, a snack from the vending machine at work, some gum and maybe some candy, too it really starts to add up! Just $10 a day can double the minimum payment on a $10,000 credit card! That’s up to $3,600 a year!

Trim the Fat:

The next part to this step is “trimming the fat.” Look at where you are spending your money. It’s time to make sacrifices. Try using a budget calculator to find some extra cash to pay down your debts. From cutting back to basic cable or not eating out as much to downsizing your big-screen T.V. and giving up the extra car, cutting back on these extra expenses can really cut back on your total debt!

Special “Secret Sauce” for Step 2 of the Debt Diet: DID YOU KNOW That Most People Spend 10% More Than They Make?

You probably know how much money you made last month, but do you know how much money you spent? Or do you know how much money you have left to spend this month? If you don’t, you’re not alone, most people have no idea.

The fact is most of us spend 10% more per month than we make. That comes out to $431 per month based on the average American income. No wonder the average credit card debt is now at $8,500!

So why is it so difficult to track your spending? Today we live in a near “cashless” society. Using debit cards, credit cards, automatic deposits, and wire transfers, we rarely even see our money. It’s easier than ever to spend, spend, spend!

We Need A New Way To Manage Our Money

Traditionally, many people managed their money by dividing their cash into several paper envelopes. An envelope for food, entertainment, utilities etc. They then spent their money from these envelopes. They always knew how much money they had left to spend, and how long it had to last. So how can we use such a simple, effective system today, when we don’t even see most of our money?

TAKE ACTION!

o Track every penny that you spend for the next 30 days

o Create a spending plan and stick to it!

Debt Diet Step 3: Learn to play the credit card game.

Get expert advice about how to lower creditor’s interest rates.

This, again, is a two-part step. The first step is attacking your interest rates. Many people who are deep in debt are suffering from high interest rates. Creditors may raise your interest rates if you are ever late on any payments or simply because you have too much debt.

You will want to contact each of your creditors and lower your interest rates. This is not always easy but if you follow some simple secrets, you may find that your results are better than you would expect!

Once you have gotten your interest rates lowered, you will want to re-assess how you use the money you have allotted to pay them off. You can also use the extra money from your budget that you uncovered to pay your cards off quicker.

Special “Secret Sauce” for Step 3 of the Debt Diet: Know your options.

Making minimum payments is simply not smart. It’s purely in the best financial interests of the bank, not you. If you can afford to pay OVER the minimum payment each month, then you can use an accelerated payoff plan (AKA: “roll up” / “roll down”) to avoid paying insane amounts of interest and get out of debt faster.

You can use the Dead on Last Payment-or DOLP(TM)- method as mentioned by David Bach or a system that pays off the highest interest rate card first, such as the debt calculator included in the Mvelopes Personal Budgeting System (saving you the most money and getting you debt free faster).

But what other options exist?

o Did you know that credit counseling could significantly reduce your interest rates and get you debt free faster?

o What about debt settlement? Did you know you could be debt free for lot less than what you owe, like 60%? …And completely eliminate interest?

o Is bankruptcy right for you?

These questions are worth looking into. In fact, they could be worth THOUSANDS of dollars to you, if you know your options and make the right choice. They could mean the difference between freeing yourself from debt in 30 years or in 30 months.

Don’t you think it would be wise to get some quality answers and truly know your options?

TAKE ACTION!

While learning to play the credit card game and getting expert advice about how to lower creditor’s interest rates is important, we think it’s more financially intelligent to take it a step further. There IS more out there and you deserve to know the truth about which options exist for you and how each option would impact you.

REMEMBER: Always beware of anyone offering only one option. Learn about and consider all of your options before choosing what’s best for you.

Debt Diet Step 4: Stop spending.

Teach yourself to spend less and save more every day.

This step is everlasting and can take a lot of focus and energy. For many people, they must break life-long habits in order to make this work. Creating your budget will help tremendously. At that point, you only have so much per week, or per month, to spend on any given category (groceries, entertainment, cigarettes, etc). The more to stick to the budget, the more you will begin to get comfortable with it.

Special “Secret Sauce” for Step 4 of the Debt Diet:

While you must control your spending in order to overcome debt, it’s good to point out that this step holds a SECRET…

Spending is emotional.

So how do we deal with it?

How do we control our spending?

The secret is that our deep, emotionally driven need to spend money is actually the key to gaining control. Even better, we can harness these same emotional drives that have caused us to spend out of control to awaken our financial genius.

If you want more… but instead of being able to afford it, you go into more debt, well, that’s not very financially smart. You will need to STOP SPENDING and discipline yourself to create and stick to a spending plan.

But remember what you want!

If you want to spend, that’s great! HOW CAN YOU?

More income is usually the answer. It’s critical to control spending. At the same time, it becomes the perfect motivator for you to stick to your budget and find ways to “trim the fat” AND to earn more money …so you can buy the things you want!

Having a clear, motivating goal and purpose is what you need to stick to any plan, especially a spending plan.

TAKE ACTION!

Decide what you really want and why you want it. Get committed! Then sticking to a spending plan will be possible. Along the way, controlling your spending will become freeing, fun and fulfilling.

o Think about what you really want. Define it clearly and specifically. Write it down as your goal.

o Focus on this goal whenever you meet resistance in starting or sticking to your Debt Diet.

o Realize that in order for you to have what you want, you simply must follow the steps of the debt diet.

America’s Debt Diet: “What’s for Dessert?”

Oprah’s Debt Diet has taken America by storm. Since originally aired and reinforced with each new part of the series, millions of Americans are taking the steps necessary to begin their path to financial freedom. No matter how you decide you need to go about it, it is critical that those who need help start now!

The techniques taught in the Debt Diet are very powerful and can help a lot of America relieve the pain of their debt. It’s important to keep up these good habits no matter what you do. However, for many families out there, it just is not enough.

Many families have already “trimmed the fat.” Anymore and they would not eat. Many families are not able to get their interest rates lower. Many families have lost income or a spouse’s income and simply can no longer afford to pay for the debt they have already accrued.

o What if these steps are not enough?

o What other options exist?

o How can you gain the advantage in a financial hardship situation?

For people in these situations, the Debt Diet just isn’t enough. It may be time to start looking for a better debt solution to help you get free from your debt.

Hopefully, you will take advantage of the special “secret sauce” we’ve shared with you here to make your debt diet more successful and enjoyable!

Hi, I’m Jesse Niesen of DebtGOTOGuy.com, the Debt Relief Guide Online and the Debt Free ASAP Blog where you get Info, Answers, Tips & GUARANTEED Email Responses to Your Questions.

I’d like to give you Free Instant Access to my Debt Relief Guide Online, so you can “make your best choice” to be Debt Free ASAP. This Debt Relief Guide makes it easy for you to finally get this area of your life handled.

Inside you’ll get a customized Debt Analysis, Budgeting Guide and the Financial Education Program “How To Be Debt Free ASAP” (Videos, Audios, Workbook, Expert Q&A and more) to SAVE YOU BUNCHES of MONEY.

Author: Jesse Niesen
Article Source: EzineArticles.com
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Debt consolidation is one of those terms that gets thrown around a lot when people talk about money management and paying down debt. While it is a great strategy (at least for certain people), it is one of the least-understood money management approaches going. In fact, there are at least ten classic misconceptions about how debt consolidation works that people in debt need to have debunked.Of all the financial plans available for people dealing with overwhelming debt, this is probably the most valuable and the least understood. In fact, you may already believe some of these common myths. Find out the truth!

Myth #1 Debt consolidation is the same or similar to debt management, debt settlement, and bankruptcy.

Truth Although the terms are thrown around a lot and even used interchangeably, there are some key differences. One things that set it apart is that it is not really a program (you can do it yourself if you want to) but more of a strategy.

In debt consolidation, you lump all of your debts together and repackage them. Debt settlement and debt management typically involve dealing with a company or counselor and the object is to reduce the amount you owe. Bankruptcy is a legal proceeding that involves a date with a judge.

Myth #2 Debt consolidation reduces your debt.

Truth No, it doesn’t. If you owe a total of $80,000 on several credit cards and loans and you consolidate that debt, you still owe $80,000.

In the strictest sense of the term, debt consolidation does not re-negotiate, settle, write off, or reduce any of your debt. What possible advantage is re-organizing your debt like that?

If you have a lot of loans at high interest rates, repackaging those higher-interest debts into one larger loan at a lower rate reduces your interest and the amount you have to pay. This means you can either pay less a month or (even better) pay the same amount but get the debt paid off sooner.

Myth #3 Debt consolidation will hurt my credit score.

Truth If you do it properly, it is likely to have no negative impact on your credit score. In fact, it may even improve your credit score! That’s because you’ll be paying off a bunch of smaller loans and any time a loan is paid in full, that helps your credit score.

Myth #4 Debt consolidation requires getting help from an outside agency or a lawyer.

Truth While there are companies and counselors in the marketplace who will help you deal with debt (in many different ways), you can also consolidate debt on your own.

Of course, if you want to handle this on your own, you have to know a bit about how to do it and what the options are. But it can definitely be a do-it-yourself project for people good with money (or who are willing to learn enough to get good with money).

If you reorganize your debt yourself in that way, it is also not necessarily visible to outsiders. Your bank, the credit bureau, and other parties may not even be aware that you have consolidated debt. (However, if you negotiate or try to settle your debt, that will send up some red flags.)

Myth #5 Debt consolidation is something for financial losers and lightweights, not for people who know how to manage money.

Truth This is the most far-out myth. Reorganizing and structuring your debt more favorably is a principle that is used in business and by the super-wealthy all of the time. It is a way of organizing and structuring your debts in a way that is most advantageous to you.

Myth #6 Debt consolidation is just robbing Peter to pay Paul; you’re just getting more debt!

Truth It is indeed a way for you to pay off one debt by getting another debt. But not all debts are equal.

As an example, let’s say that you owe $10,000 and the loan is set up so that you have to pay 22% interest. For example, let’s suppose that I go to my credit union and work out a deal to borrow $10,000 at 12% interest. While both debts are still in the amount of $10,000, the debt at 12% interest is a better deal for me. I won’t have to pay as much per month or, if I make the biggest payments I can, I can pay it off sooner.

Myth #7 Debt consolidation requires you to be a homeowner.

Truth There is a grain of truth to this, in that owning a home definitely offers an advantage to anyone who wants to re-structure debt. (It doesn’t matter if your home is paid for or not, but you do need some home equity.) There are ways to reorganize your financial obligations even if you do not own a house.

Myth #8 Debt consolidation will make it harder for me to get future loans.

Truth In most cases, it is unlikely that anyone but a forensic accountant could figure out that you have reorganized your debt (unless you go through a debt consolidation company-that could leave a paper trail).

If you borrow money in one loan and then take out another, more advantageous loan to pay off the first one, you’re more likely to leave a paper trail of somebody who pays off debt responsibly. It is more likely to make you a desirable creditor.

Myth #9 People who consolidate debt just wind up digging themselves in deeper in debt!

Truth It is absolutely possible to consolidate your debt and then keep spending and get yourself in a big mess. That’s why you need good information and a plan to pay off your existing debt, manage your finances now, and start planning for your financial future.

There is no reason that many financial management programs cannot work to get you out of debt for good, but you have to have a plan.

Myth #10 Debt consolidation will allow me to write off some of my debts and it will stop bill collectors from calling.

Truth Let’s take these one at a time.

Unlike bankruptcy, true debt consolidation will not allow you to write off any of your debt-not a penny of it. Whatever you owed as a debt before consolidation is the amount you’ll owe after consolidation.

So why would anyone use this approach? Well, it is a new loan and it is structured in a more favorable way than the older loans. You do not get existing debts cancelled or decreased! Now it’s true you can work that out in other debt management solutions (debt settlement lets you reduce debt, bankruptcy will let you write some debt off) but they come at a price. Both of these approaches can have a negative impact on your credit score, will make it hard for you to get future loans, and stay on your record for quite a while.

 Bankruptcy, in particular, is an extreme solution that involves an actual court proceeding and a judge who has the authority to make certain decisions about your financial situation (including forcing you to sell some items to pay off debts).

If you regroup your debts in this way, it can only stop bill collectors indirectly. Here’s how: let’s say you have six debts and you’re getting calls all of the time. If you re-organize your six debts into one large loan at more favorable terms, you’ll pay off all of those littler debts. Bye-bye, bill collectors!

However, if you don’t pay off your new bigger loan on time, the bill collectors will start calling again.

Author: Jo Ann LeQuang
Article Source: EzineArticles.com
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Within just a few weeks it will transform your life; No more stress or sleepless nights, you will be happy and life will be fun again.

This is NOT a get rich scheme (SORRY THERE IS NO MAGIC FORMULA).

(STOP NOW- do not use credit to finance your lifestyle, no more loans no more credit cards. (You are going to be a cash only person) stop giving away you hard earn money, once you are clear of debt and turned the corner you can then re-focus on becoming wealthy. The facts are you have NO option you MUST clear your debts, if you fail the consequents are Foreclosure on your home, your car reclaimed by the HP Company, court orders, bankruptcy.)(SORRY but that is the hard truth).

Quote from the course:

Nevertheless, that will NOT happen to you because you are going to implement the recovery plan that we will set out for you.

Are you in Debt? we receive many e-mails asking if an internet, e-commerce business can transform debt into wealth. We cannot promise that, to start any business takes commitment, you must be focused and have a business plan, set key objectives. You also need to have time to develop your new business.

If you are in Debt, you are often under pressure from your creditors, stressed. First consider you priorities:-

- Would you like to pay off your mortgage?
- Would you like to pay off your bank overdraft,loans and credit cards?
- Follow our plan, clear your debts, and become financially independent. (THEN you can move to the next level how to become wealthy).
- You cannot wish to pay off your debts; you need the commitment and the WILL to make it happen, which will require changes to the way you control your money and your spending habits.

Create a new future, turn debt into wealth:

Course content:

1. Step one make the commitment.
2. Actions that will move your bank account into the black.
3. Golden rules to success
4. Review your current financial status.
5. Were you ever taught how control your money?
6. Money makes money, your key objective to get debt free.
7. Why do we fall into the credit card trap?
8. Those cards must go. (High interest crazy)
9. You must operate on a cash only basis. ( you will quickly see the benefits, it is amazing the extra money it creates)
10. HP the monthly payments that cause you worry and stress.
11. Now you have the mind set to pay off ALL your debts.
12. Manage your spending. (Impulse buying will blow your plan right out of the water)
13. Being in debt can be due to bad luck; however, it is far more likely to be our own fault, failing to manage our finance.

The Golden rule, NEVER spend above your means, which includes loans credit cards, over spending on luxuries, cars, holidays, entertainment, drinking, smoking.

Evaluate you current spending habits, YOUR OBJECTIVE to clear all debts, have money in the bank, plan to make money and ensure a new future. Eliminate stress, worry, and depression. Freedom happiness and wealth is NOT just a dream. YOU CAN DO and YOU MUST DO IT. (Develop that mind set believe in yourself, do it for your family and for your well being and health).
We have set the scenario, now we take one-step at a time and make it happen.

Above all, you must be honest, with your personal assessments; you must also be realistic, DO not set impossible goals.

Step one make the commitment

You are about to take the most important step to clearing your debts and achieving personal wealth.

1. I am totally committed to following the advice in this manual, I will make changes in attitude and the way I manage my money, necessary to achieve my main objective build a debt free and wealthy future.

2. In order to plan your systematic recovery and transform debt into wealth we need to put our cards on the table, hide nothing, be honest and complete the following questionnaire.
Please complete the following questionnaire.

It will provide the status of your current financial position. (sorry in this format the table forms do not work, it is better if you are working with the correct forms/ tables ( read on once you are committed to giving it your best shot. you can go to our web page and see the FREE course complete with forms)

No Answer the following questions (Truth only) Yes or No YES NO

1 Do you carry you credit card balance over each month
2 Do you have more than three credit cards that on the upper limit
3 Do you ever use one credit card to pay debts or pay off other cards
4 Do you only pay the minimum payment on credit cards each month,
5 Have you reach your maxim limits on all your cards
6 Are you are struggling to even make the minimum payments
7 Do you have more than 10 years to pay on your mortgage
8 Do you have your car on a finance agreement
9 Have you taken out a second mortgage to pay off debts
10 Are you planning to buy a new car
11 Do you have personal loans, bank over drafts
12 Do you have store cards to purchase goods
13 Are you living beyond your means, struggling every month
14 Have you ever had your services turned off for non payment
15 Is the stress and worry causing health problems
16 Is the debt having an impact on your family relationships
17 Have you tried to find ways of earning more money
18 Are you under extreme pressure from your creditors
19 Are you considering bankruptcy
20 Are you in trouble with the bank or mortgage society

Now we face the decisive moment.

Total all the “YES” numbers

If you scored, 4-0

Not too much to worry about we can soon have you on the way the wealth and happiness.

If you scored, 8-5

You need to review your spending and focus on your options to make money.

If you scored, 13-9

You are managing to pay your way; you earn the money then have to pay it to your creditors (high interest). You need to concentrate on reducing your debts by controlling you excessive spending. Implement our debt payment scheme so you have spare money to invest, use you income and spare money to generate wealth.

If you scored, 17-14

You are on the ragged edge, struggling to pay your way, urgent action is required to stem to flow of outgoing money, consider every penny you spend do you really need to buy new clothes or have that expensive evening out. Focus on channeling the money saved to pay off debits, review the debts that are costing you high interest and pay them off. Once you see the benefits, your recovery will gain momentum.

IF you are 20-18

You are clearly deep in debt, you must be unhappy worried and stressed which will effect your well being and health.

We will help you get back on track, however it will take commitment by you and all the members of your family and you need to cut your spending. Put a plan into place to pay off the most pressing debts. NOW you need the WILL to implement the advice we will give you. (Think new future better life no worries or stress, security) Make this commitment get out of debt, to change your spending habits. This is the hard task. Do that and then you can look forward to a new future?

Learn from my mistakes:

Speaking from experience, I went to university attained a MBA you would think that I have developed the self-control to monitor my spending and invest my money wisely. NO! I did not I was spending more money than I was earning clothes, cars, holidays, living on my credit cards for a few years I had a high old life.

For nearly three years, I continue to impulse buy. Then I started robbing Peter to Pay Paul using one credit card to pay of another, transferring balances, taking out loans. WOW, I had spiraled deep into debt. Under pressure from all the creditors, could not sleep, each month all my salary already committed to creditors, outgoing much higher than my income.

OK it was my fault silly middle class girl who over spent. Why was I such a fool? Well we all want material things. We associate fast cars, designer clothes, with happiness. And fall into the trap of the media and the advertisers, to the offers of credit cards and loans.

I cannot recall any of my family or tutors teaching me the importance of being in control of financial affairs.

Now there are hundreds of ways in which we can fall into debt, I was a miss – guided fool. With many, it is bad luck, ill health, out of work, family problems. They wanted the best for their children.

The objective is to review the status, then formulate a plan transform debt into wealth.

1. Control Spending and credit management.
2. What to do with our salary (Money in / Money out)
3. Make changes, plan a new financial life.
4. Learn how to invest money, or develop a business.
5. Consider the future, pensions and retirement.

First, we will talk about the positive aspects of life and future. We all dream of winning the lottery, becoming millionaires over night. (It will not happen) The fact is if you do spend £10 per week on the lottery or the football pools. That is £520 pounds a year, invested weekly with compounding interest at 8% would provide you a substantial amount of money by the time you are 65 years old – depending on the number of years. On average for most people it would be well over £500,000.
Most of us will earn well over a million pounds in our life time, for example if you earn £30,000 for 40 years that is £1,200,000.

However, the sad fact is most people have no idea how to save or invest money, they give all they earn to banks, credit cards, loans, and high interest is hard-earned money lost forever. (Crazy but true).

If you are living on credit than you are giving away a high percentage of your money, money that, you could be investing and being paid interest.

STOP NOW- do not use credit to finance your lifestyle, no more loans no more credit cards. (You are going to be a cash only person) stop giving away you hard earn money, once you are clear of debt and turned the corner you can then re-focus on becoming wealth.

The facts are you have NO option you MUST clear your debts, if you fail the consequents are Foreclosure on your home, your car reclaimed by the HP Company, court orders, bankruptcy. (SORRY but that is the hard truth).

Nevertheless, that will NOT happen to you because you are going to implement the recovery plan that we will set out for you.

We now need to first motivate you, set key objectives and realistic goals.

We all have different life styles, often based on the salary we earn.

The rule the higher you fly the harder you fall. Applies:

If you live in a large expensive house, you will have much higher mortgage repayments. Top of the range BMW, you impress no one every one knows you are living on credit.
Therefore, before you try to impress with a new swimming pool or ponies and motor bikes for the children, stop and think can we afford to do this, would we be better to wait and pay cash. (Of course you would you know it makes sense).

If you are the average person, living in a three-bed semi, with a second hand car, and are a hourly paid worker, maybe in a factory or in the construction industry, the same philosophy applies. Yes it would be nice to impress your family and friends with a tan from a expensive holiday or a top of the range car, believe me they will only be impressed the first time they see it. You will be the one faced with 3 years of HP repayments, higher insurance, and the cost of fuel.

OK I know what you are thinking every one has a mortgage has credit cards and debits, Stop because you are having negative thoughts, NO it is not OK to be in debt, it complete madness and will never make you happy it will only bring you worry and stress..

Therefore, no matter what your station in life is the same principles will apply.

We are taking time to outline the reasons most of us find ourselves in debt, because if you can not accept there is a problem you cannot take the actions required to eliminate the problem (In this case debt).

We could show many examples of credit cards. They make it so easy, you always spend three times more than, if you were buying cash. Then the situation gets even worst, let us assume you have four credit cards, average interest 16.9% they have a combined outstanding balance of £5,200. If you only pay the minimum monthly payment = to 3% of the outstanding balance it will take you 20 years to pay those cards off and your payment would total £9,720 – work it out you have paid them £4,520 interest.

You know in your heart that you get a much better deal paying cash, often a lower price and you pay NO interest.

OK we never promised a magic over night formula, we did promise the plan that WILL take you from debt to being wealthy.

Key Objectives:

o STOP —using credit NO loans or credit cards, now you are 100% cash. Think before you spend, do not buy until you have spare cash.
o This is NOT an option, if you are at present deep in debt, you will realized, the high life is over. You will be receiving legal letters. If you do not stop using credit, then you will reach a point where that decision will not be yours. Because once you are exceeding the limit on your cards and fail to make the payments, the credit card companies will put you on stop, and immediately inform the credit agencies. Then you are really in trouble, all the other loan companies credit cards will follow suit quickly. Your bank will also withdraw your over draft facility and monitor you account as high risk.
o Cut up those credit cards. Use only cash, and only when you have spare cash, you need every penny to pay off your debts. You must learn to live a cash based life style.
o Pay off ALL your debts including mortgage, ( we will tell you how to do that in the shortest possible time)
o Learn to invest ALL spare money wisely, your main objective will be to generate wealth,
o Phase 1 set aside money in your emergency saving fund.
o Phase 2 Focus on building long-term retirement wealth, we will guide you to save investment that will generate income without the need for you to work. (You will have financial freedom) Enjoy life travel, play golf, go fishing. Have fun been happy.
o Now in the first few years you are going to throttle back, drop out of the fast lane, no more living on credit and accumulating debts that will eventually bring you crashing down, maybe cost you every thing house, car, family. (That would be devastating)
o Work hard for real freedom and independence; soon you will be the one being in charge in complete control of your own destiny.
o Simple rules, cash only, no loans, no more monthly HP agreements.
o Your family and children will need to understand that from now on all spare money will go to pay off debts. ( Hard to say no to a tearful little girl who wants a new play station game) Still a lot better than telling a teenage daughter, we are going to lose the house because we have not paid the mortgage.
o OK this is not rocket science; it is just plain common sense. You can dream and it is important to have the vision that in 5 years you can be completely debt Free.

The plan:

Prioritize your debts, (we will provide the formula).

List All your creditors ( Debt is money you owe and are legally committed to repay) (Expenses = Money you pay out each month for Gas, Electricity, food, petrol, take items that you pay every year for example car insurance, and divide by 12).

First, clearly understand how much you actually owe, what rate of interest you are paying.
Complete the following work sheets designed to help you and your family to understand where the money going. Invite innovated think and ideas as to how you could save money.

(A) Monthly Living Expenses

Living Expenses Actually cost Saving

Rent
Council Charges
Electricity -
Gas
Telephone / internet
Water Rates
TV company ( Sky)
Food (total for every thing)
Entertainment.
Children Pocket money
Car expenses
Car 1 petrol (only)
Car 2 petrol (only)
Maintenance
Road fund Tax
Insurances
Home insurances
Medical Care
Children’s Education Expenses Books Tuition etc
Clothing and Miscellaneous
Other expense

Total

(B) Major Purchases – over 12 months divided by 12

Holidays
Car purchase
Major House improvements
New Furniture
New Kitchen equipment
Garden plants tools
Gym or Golf club fees
Season tickets
Recreation expenses
Miscellaneous expenses
Cash spent ATM etc
Total C/f to summary

(C) Debt payments

Name of Debt Total

Balance Monthly Payment % interest Full amount or min

Mortgage
Second Mortgage
Car Loan 1
Car loan 2
Bank Loan
Over draft
Credit Card 1
Credit Card 2
Credit Card 3
Credit Card 4
Other debts

Total C/f to Summary
(D) Monthly Income
Monthly take home salary
Second income
Benefits DHSS
Pensions
Part time job
Internet income

Total C/F to Summary

Totals carry forward

Personal Financial Statement – SUMMARY the points of reckoning, you now need to insert you figures.

E.g., total income – total Living expenses- total debt payments.

Which we hope will give you a positive result, e.g. more income than outgoings? Referred to as disposable income a true measure of your current capacity to decrease you debts and increase your wealth. Taking these initial steps should have provided you with the base information to empower you and your family to focus your efforts and give you the means to measure your progress.

It is important that you share this information with your family.

Depending on the result of Income (- outgoings) your objective will be to ensure that you have a minimum of 10% of your total income as disposable income, that is the money you are going to use to clear your debts in order of priority.

It will depend on your original check on status if you were in the 18-20 range then the figures may indicate that you have debts and expenses that exceed you present income.

If this is the case, you have NO option: You must cut your spending. All luxuries, none essential expenditure, holidays, two cars, smoking, drinking, golf club, gym, entertaining, clothes, furniture, children games, garden plants flowers. In place of golf the gym going to the pub, find spare time work earn more money.

If you DO NOT TAKE THESE ACTIONS NOW, you WILL lose your home, you will face bankruptcy. This is the hard line truth.

Total income
Total Living Expenses=
Debt Payments
D – Total of AB&C =
Disposable Income

Right now your head will be spinning, you were expecting an easy way out, there is no easy way out it takes total commitment.

We did warn you TOTAL commitment.
NO MORE CREDIT CARD spending
NO MORE LOANS
NO MORE impulse spending
NO MORE Holidays (Until you are clear of debt)

You are now on the road to recovery, you are going to transform you debt into wealth.
You first step was to create disposable income = Income minus outgoings.

Your starting point should be 10% your monthly gross income.

Write down each debt in the first column 1, total balance in column 2 the minimum payment in column 3, then you divide the total balance by the monthly payment, insert the answer in column 4.

Next, you need to prioritize your debts in column 5 Start with the lowest division answer in column 4 until they are numbered.

Column 6 that is where you start to see the benefit, to show the debts as they are cleared (Paid off).

To know how many payments to pay off: You divide column 2 by column 6 = the number of months in column 7.

First you use your disposable income to increase the payments on debt 1, what will quickly clear that debt, at which point you now have even more disposable money all off which you use to accelerate the payment of debt 2, as each debt is paid you roll it over to really accelerate the payment on the next debt. Once you pay all debts off, then you have ALL of the disposable income to invest. Now you have gone from debt to building wealth.

Invest wisely NEVER go back to credit cards or loans only live on a cash basis. Moreover, plan for retirement.

Name of Debt Total
Balance Monthly
payments Division
Answer Pay off

Priority Additional monthly payments Months to pay off

Column 2 = total debt £————————

Column 3 = Total Monthly payments £————————
We trust that you can see the philosophy, and the benefits of using ALL your disposable money E.G. Income minus outgoings to accelerate repayment of your debts, then the amazing acceleration that takes place as each debt is written off you have extra money to pay of the next debt ( In order of priority).

This is a WIN -WIN situation, once you see it actually working and no more creditors chasing for money, do not relax maintain total commitment this is not just about clearing your debts this is about a new life, (CASH ONLY).

In just a few years, you will be in a position to create wealth for you and your family. You will have taught your children how to manage money, never to worry about you future again.

Now you will really have the respect of your piers, friends and family. You will own every thing the house, cars. Take that five star holiday all paid up front CASH.

I wish you good fortune;

If you need further help or would like the Excel forms to monitor and record transactions FREE please do not hesitate to contact us.

Your Faithfully

Kenneth Yearsley

(Think new future better life no worries or stress, security) Make this commitment get out of debt, to change your spending habits. This is the hard task. Do that and then you can look forward to a new future?

For nearly three years, I continue to impulse buy. Then I started robbing Peter to Pay Paul using one credit card to pay of another, transferring balances, taking out loans. WOW, I had spiraled deep into debt. Under pressure from all the creditors, could not sleep, each month all my salary already committed to creditors, outgoing much higher than my income.

Author: Kenneth Yearsley
Article Source: EzineArticles.com
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Anyone who has paid attention to the mounting credit card crisis afflicting modern Americans should not be surprised by the sudden explosion of debt management firms in the last decade. The debt management industry has grown exponentially over the past few years, assisting any number of borrowers with their financial burdens, but, as with any new business that concerns itself with debt and credit cards, a breed of predatory debt service ‘professionals’ seek only to exploit the economically desperate households by promising savings they could never deliver and sometimes even defrauding them altogether. Scam artists are an unfortunate consequence of any profession, and the debt relief industry is no better or worse. However, since word of mouth and a reputation for honesty and competence can make or break a company – especially a finance company – these nefarious loan workers don’t last long. However, just in case you’re unlucky enough to meet one of the less reputable debt management workers, here are a few tips to identify the worst sort.

Since debt consolidation loan programs are the most popular form of debt management, let’s start with loan officers and how they can trick unwary homeowners into borrowing more than would be advisable upon their property. Essentially, this sort of debt consolidation depends upon home equity. Credit ratings (above 700 FICO scores, ideally), debt to income ratios (less than forty percent of gross months income should go to home mortgage payments and revolving debt payments), and employment histories (clients most likely to be approved should have worked the same job for two years as provable by W-2 tax returns) are, of course, important. However, the most important element for mortgage debt consolidation will be the amount of home equity the homeowner currently enjoys.

Now, not only is home equity a tricky subject at present with property values falling all over America, but this drop in values is largely the fault of mortgage companies themselves. With an absence of regulation somewhat absurd in retrospect, criminally negligent loan officers and mortgage brokers (together with processors that looked the other way and appraisers that exponentially bumped up home values) gave loans to borrowers that should never have deserved them.

 The resulting mortgages proved more than the homeowners could possibly afford, and the glut of foreclosures (which should have been expected) drove down home prices which only worsened the potential refinance and debt management solutions homeowners would ordinarily presume to be available. Furthermore, these same foreclosures cost the original mortgage lenders (within a debt industry dependant upon constant cash flow for their bottom line) tens of millions of dollars and a previously inexplicable number of mortgage companies simply faded away.

 Though many of these businesses deserved to go under, the sudden failure of so many mortgage companies had a dire effect upon the American economy and our newly skyrocketing unemployment is but one consequence.

This is not to say that all of the mortgage refinance options are to be avoided. While it is much harder to take out a mortgage loan under current conditions, some homeowners – facing adjustable rates or balloon payments – simply have no choice. On the other hand, it is NOT necessary for them to include their credit card debts within their refinance no matter what the more aggressive loan officers would try to convince them of.

 Home mortgage refinancing is a form of debt management, of course, and making sure that what will be the average American consumer’s largest lifetime debt falls under acceptable (and formally fixed) interest rates should be of the utmost priority. However, what trustworthy mortgage professionals will explain is that the longer the term the more money you pay with even a locked prime interest rate. That’s just the way compound interest works. For that reason, mortgage professionals attempting to explain debt management should do whatever it takes to make borrowers have the lowest terms that would be comfortable for their household budget.

Not, you understand, that they should try to find the lowest payments for borrowers (obviously, it would be rather the opposite), but rather the fewest payments that they would have to pay over the course of the loan. A fifteen year term, if applicable, should be advised before the thirty, and biweekly payment programs that add up to essentially thirteen months of payments every year with accompanying years off the loan pay-off should also be strenuously encouraged.

Perhaps most importantly, the loan officers should always ensure that the lender did not include some provisions against early pay-offs. Prepayment penalties, though technically legal, are the most underhanded strategies of less than trustworthy mortgage brokers. Anyone who tries to force through a prepayment penalty on unsuspecting homeowners or tries to convince them of the merits – often they’ll knock a few hundred dollars off the loan fees – should be avoided no matter their (evidently overstated reputation).

While all of this should be fully recognized by homeowners before they start talks with any mortgage lender or broker, your authors are aware that debt management this day and age primarily concerns itself with credit card debts. There are many other sorts of financial burdens for consumers to worry about, but the average American’s greatest worry tends to be the overload of credit card bills. Student loans, for example, generally boast the lowest interest rates of all types of debts.

Hospitals and insurance companies, whatever their public perception, regularly work with their debtor clients to make sure that their medical bills are not an undue burden, even offering stays of payment. Auto loans, it is true, sometimes have higher interest rates, but they’re still rarely above those offered from mortgage loans or home equity loans. Nevertheless, even if there is a significant different between the interest rates (and, for credit card debts, there is almost always a steep drop once consolidated), the smart borrower has to remember the effects of compound interest.

 It is easy to see why loan officers would try to sugar coat the debt consolidation program, their pay is based around the overall size of the loans that are refinanced or taken out, but that is no reason to willfully ignore the borrowers’ true needs.

Not to belabor the point, but the worst suggestion that an unscrupulous loan officers can inflict upon their homeowner clients would be advising them to throw their credit cards debts onto a mortgage consolidation lasting decades. This is not debt management, this is debt avoidance. Borrowers will find that they are still paying their debts, but, after the interest continues to multiply, they will be paying their debts many times over.

Worse still – especially in these trying times – homeowners are surrendering their ever more precious equity for only a temporary fix. Credit scores will fall from the sudden amount of credit card accounts now open, and, more to the point, how many consumers, once they have moved their debts over to a different loan source, would be able to resist the temptation to revisit their former spending habits and once again rack up bills through thoughtless purchasing. The key to any true and lasting debt management must be the debt professional working with the consumer to actually pay off their debts! Simply moving them to an equity loan that, for the moment, lowers their payments (however much longer and how much more they will inevitably pay) does nothing to assist the borrowers’ long term financial stability.

 Any viable program for debt relief must concentrate not only upon education to prevent such debt from occurring in the future but on actually eliminating the borrowers’ debts!

There are many other varieties of debt management, of course – not all debtors, after all, own their own homes. Consumer Credit Counseling companies have been exploding in popularity of late, but they contain their own string of suspicious activities each consumer must keep an eye out for. Since the industry does not tend to care so highly for certification, they attract more than their share of con artists and shady ‘corporations’.

 For this reason, borrowers must be incredibly diligent when investigating the bonafides of any business that they consider dealing with. Do not be fooled by flashy web sites or nice offices in well regarded areas. Debt management is about the people that you work with and many of the best debt professionals and debt management films, working in such a new industry, will not spend the time or money on advertisements while trying to make their way through a career or business with the best of motives.

Once again, though, even for those Consumer Credit Counseling companies that actually are legitimate, so much of the industry still depends upon credit card conglomerates (the very creditors that your debt management representatives are ostensibly fighting against) for half of their payments. Have you ever wondered why there are so very many Consumer Credit Counseling commercials on the television urging unsuspecting debtors to take a change at easing their financial burdens?

As it turns out, above and beyond the sky high fees initially charged to the debtor clients themselves, the CCC firms get even more money from the various lenders. It is all part of a ploy by the credit card companies to prevent borrowers from attempting to declare bankruptcy. Chapter 7 bankruptcy protection has been greatly lessened over the last few years of an unfettered congressional deregulation, but the option does still attract a number of desperate debtors, and, though the chances are slim to none under the newest changes to the bankruptcy code statutes, some may have even have a chance to successfully wipe clean their unsecured debts (though it would also mean basically erasing the entirety of their possessions).

Because Chapter 7 bankruptcies do still remain a threat to their eventual bill collection, the credit card companies help fund the Consumer Credit Counseling companies so as to convince hapless borrowers to maintain and try to repay their loans, albeit in a different form. There are benefits to signing up with the program, to be sure. Interest rates are lower (not that they could actually be higher) and many of the creditors will agree to waive some of the fees assessed from over limit accounts or payments that arrived too late.

 However, considering the amount of money Consumer Credit Counseling professionals would charge for the opportunity – and, also, keeping in mind how damaging the Consumer Credit Counseling approach would be to the prospective client’s credit ratings once entered – most every applicant should be able to search out a better route to debt management success.

Debt settlement is another form of debt management rising in publicity the past few years, and these types of companies have many similar features to Consumer Credit Counseling firms. Both industries, after all, ask borrowers to sign over their collected debts (once again, primarily those unsecured ones which would be affected by bankruptcy protection). The debt settlement industry, however, does have a national certification program with which borrowers may rely upon to ensure that the people that they are dealing with could be properly trusted.

 Furthermore, since the underlying principles behind debt settlement thoroughly guarantees that there will be no collusion between the debt management professionals and the credit card companies, consumers do not have to worry about their counselors serving two masters. With debt settlement, the specialists working upon the specific case maintain an adversarial (though, as you’d imagine, still friendly for business purposes) relationship with the credit card companies so as to negotiate a reduction of their clients’ total balances.

The debt settlement representatives have no reason to ever do anything more than work for the debtors’ best interests. That’s the only way their careers and the industry as a whole will survive and thrive within the new economic realities.

No matter the foundations of the debt settlement industry’s guiding principles, however, there still exists (as always will, with any possible employment opportunity) desperate scavengers aiming to take advantage of their clients’ ignorance and neediness regarding complicated financial matters. As we have said, these few practitioners of economic scams are found sooner rather than later and let go, but borrowers must always be wary of any debt management specialist that insists upon his or her fees paid up front. Initial consultations, by industry standard, should always be free of charge.

 They are, after all, trying to impress the clients with their professionalism so as to win their business, and it is highly suspicious that they would ask for money before they have even begun to do their job. Debt management must garner the trust of both the debtors and the creditors. Do not take the advice of anyone that you believe would be purely out for the quick buck.

For that matter, there are also any number of less than legal financial ploys that may sound like normal business practices but, in actuality, would leave the borrower open to charges of fraud. In the same way the malfeasant loan officers may urge homeowners to go with appraisers promising to pump up home values to tens of thousands of dollars more than the properties are actually worth or fool with pay stubs and tax records to suggest greater gross incomes than the true earnings, some debt management professionals might even advice that their client ask for a different Employee Identification Number.

 The purpose of altering Employee Identification Numbers is purely to trick lenders into disregarding credit report information and would be thought of as highly fraudulent behavior punishable by the fullest extent of the law. Before signing off on any such activity, make sure that you contact an attorney or – at the least – read up on the consequences of such actions. Whatever minimal savings may result from these sort of tactics are hardly worth the legal struggles that may ensue.

All of these warnings are not meant to turn prospective borrowers away from the good that proper and law abiding debt management counselors could do for household dearly in need of debt relief. The overwhelming majority of specialists working in these fields obey the strict letter of the law and, even beyond that, the specific rules of their chosen field.

 Most debt professionals enter the industry because they enjoy helping borrowers climb through the thickets of debts and find a better life for themselves and their families. Do not assume, just because of a few bad apples, that debt management specialists should be considered suspicious solely because of the nature of their work. As with any profession – from mechanics to congressmen – there are always bound to be a few brigands only out for themselves, but, with careful study of their company and a close reading of precisely what they are attempting to do, it is not that difficult to figure out which ones you should trust.

Author: Cole Collins
Article Source: EzineArticles.com
Programmable Multi-cooker

Before delving on what a debt management plan can do for you as an individual or as a business, it will be good to decide its scope. It is a misconception among many people that debt management plans can only be used for eliminating the existing mound of debts. Nevertheless, debt management plans have an extended scope. As the name suggests, debt management plans may be used with advantage to manage the debts to a particular level. It must be acknowledged that a proper management of debts makes debt consolidation and other methods employed to fight the menace of debts superfluous. Prevention is better than cure. Most of us repeat the adage incessantly. It will be through debt management plans that one can really develop the habits in ones life and dealings.

However, the role played by debt management plans in working with the debts already incurred may not be discounted. Many people owe their financial survival to the debt consolidation loans that helped them counter bankruptcy and other debt related problems.

The author has tried to illustrate the preventive as well as defensive uses of
Debt management plans through this article. Since the defensive part of the debt management plan is more widely used, we will first discuss the various plans to deal with debts that an individual or business has already incurred. The various debt management plans that come in this category are as follows:

o Debt consolidation loans

The most conventional method of dealing with debts is debt consolidation loans. Debt consolidation loan is essentially meant to arrange easy finance for clearing the mound of debts. A single loan is drawn after consolidating the various debts. One aspect that distinguishes debt consolidation loan from other loans is that the borrower gets help and guidance from the debt consolidation loan provider in the settlement of debts. Expert negotiation skills and a proficiency in debt settlement recommend the services of the debt consolidation loan provider in this regard.

o Debt consolidation mortgage

Debt consolidation mortgage constitutes a major part of the debt management plans. A debt consolidation mortgage is basically a second mortgage. In this method, the borrower requests the mortgagee who holds the first mortgage to the home to repay his debts. In exchange, the borrower includes the debts while making the monthly repayments. The advantage of the debt management plan is that finance is available for debt consolidation at rates equivalent to a mortgage, i.e. at cheap rate of interest.

o Debt consolidation through remortgage

While debt consolidation mortgage entails dealing with the same mortgage lender, debt consolidation through remortgage involves shifting to a mortgage lender who offers a better rate of interest. In this debt management plan, the borrower or the mortgagor requests the new mortgage lender to include several debts along with the unpaid amount on the original mortgage for disbursement. Again, this will help the borrower get cheaper finance for debt consolidation at the rates of a mortgage.

o Debt consolidation through credit cards

Credit card as a debt management plan will be especially useful when the debtor wants a quicker settlement of debts. As in loans and mortgages, a credit card user need not wait for the debt management plan to be approved and sanctioned. Another advantage of credit cards as a debt management plan is that borrower is not required to pledge any of his/ her assets to back the loan. This can however be too expensive for the credit card user.

o Debt consolidation through home equity loans

Home equity loan is a secured loan taken against the equity in ones home. Home equity loans put a convenient method of debt settlement. A home equity loan is a multi-purpose loan that can be used with equal advantage whether in a debt management plan or for making home improvements. Since home equity loan is secured, it provides cheaper finance. However, the borrower needs to be regular in making repayments to protect his house from repossession.

o Debt consolidation through debt settlement

This form of debt management plan involves associating with a debt settlement company. The debt settlement company undertakes to repay the debts while the debtor repays the amount through small monthly instalments to the debt settlement company.

As discussed above, the preventive methods are equally important tactics employed to avert the occurrence of debts. Debt counselling aims to impart debt management training to individuals as well as businesses. People are taught the manner in which to manage their revenues. Many of the tips provided as a part of the debt counselling techniques are time worn. The aim of debt counselling is not to recall these techniques, but to help people through innovative ways and means to employ these techniques in their life.

The defensive debt management plans having repaid the debts, do not give sufficient guarantee of the menace of debts not raising its head again. There is a need to end the cycle of the debts, and the preventive part of debt management plans will be especially helpful on this count.

Loan borrowing is like once in a life time decision and much is at stake. It is indeed not a good thing that many people are misguided into taking loans that are not appropriate to their financial situation. This leads to many allied misgivings. As a financial consultant the only driving force of Ann Gibson is to provide proper knowledge. Because knowledge in respect to loan borrowing is power and exudes financial benefits.He works for uk debt consolidation site uk debt consolidations.

Author: Ann Gibson
Article Source: EzineArticles.com
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UK residents seem to enjoy a strange relationship with debts. While they cannot do with a large debt load over their shoulders, they also cannot do without incurring them for long. If a survey is to be taken out of the most rash spenders, then the Britishers are sure to rank highly. Without ever thinking about where the expenditures will be met from, people go on spending and spending. Debt management in the UK is a set of techniques and processes through which an attempt is made to give a break to the reign of debts.

Debt management plays both an active as well as an advisory role in the UK. As part of the active role, the job of debt management UK will be to counter debts that have already been incurred. The techniques employed for this purpose include debt consolidation loans, debt consolidation mortgage, home equity loans, and debt consolidation through remortgage. The advisory role of debt management involves informing borrowers of ways to avoid debts. Debt counselling and credit counselling are employed to give debt sense to people.

The roles may differ in terms of the period within which the benefit will become visible. While the results of debt consolidations loans are immediately visible, the impact of debt counselling will take time to come on the scene.

With the pressure of creditors building up against individual, the first priority of debt management UK will be to relieve borrowers of debts. The process of settling debts is known as debt consolidation. It derives name from a sub-process that involves consolidating or clustering debts. From this stage onwards, it is the loan provider who assumes responsibilities of eliminating debts. Borrowers may or may not exercise this benefit since it is optional. However, given the relative inexperience of borrowers, it will be advisable to allow debt consolidation loan provider to settle debts.

Debt management agencies have gained expertise in debt elimination through years of work in the field. When debts become unmanageable, borrowers are left with not much scope but to surrender to debt consolidation loans. On the other hand, there are borrowers who are confused about how debt consolidation loans will help when it is just another debt.

 The essence of debt management lies in the timing. The debts that are increasing your stress levels would demand immediate payment. Conversely, debt consolidation loan needs to be repaid over a period of 5 to 25 years. This means that the borrower has sufficient time to plan repayment.

Loan provider’s participation in the debt consolidation process is limited to debt consolidation loans. Other debt management techniques, namely debt consolidation mortgages and home equity loans, may not include this facility. Consequently, expert advice and guidance for free is the chief attraction of debt consolidation loans. Borrowers however will make their choice of debt consolidation technique after considering many other factors.

Cost of debt management technique will be given prominence during search. Debt consolidation mortgage, which is second mortgage, allows debt management at the rates of mortgage. Debt consolidation loans too garner funds at cheaper rates if the borrower agrees to serve some collateral. Since there is very little risk to cover in secured debt consolidation loan, these carry very low rates of interests.

Debt consolidation loan and debt consolidation mortgage do not guarantee a life-long riddance from debts. They can at the best rid borrowers of debts at a particular point of time. For a life-long freedom from debts, the advisory role of debt management will be of immense help. Debt counselling is not merely informing borrowers of certain debt management tips.

Debt management tips must be supported with sufficient examples. The manner in which borrower is counselled will have sufficient impact on the advice intake of borrowers. The counsellor must try to be as practical as possible. Debt counselling involves helping borrowers in implementing debt management tips and rescuing them from dead ends.

Debt management, as is clearly visible has a very wide scope. However, a very thin line demarcates benefits of debt management from its drawbacks. One wrong step on debt management, and the very benefits that one boasted of can turn into drawbacks.

Consequently, borrowers need to keep their eyes open, particularly on the debt elimination techniques like debt consolidation loans. Debt counselling too need not be taken lightly, since they also can backfire at times when incorrect tips are implemented.

Loan borrowing is like once in a life time decision and much is at stake. It is indeed not a good thing that many people are misguided into taking loans that are not appropriate to their financial situation. This leads to many allied misgivings. As a financial consultant the only driving force of Ann Gibson is to provide proper knowledge. Because knowledge in respect to loan borrowing is power and exudes financial benefits.He works for uk debt consolidation site uk debt consolidations.

Author: Ann Gibson
Article Source: EzineArticles.com
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In recent times, the messages coming out of the constant advertising bombardment by businesses, professionals and institutions engaged in the business of debt collections, would probably lead the ordinary consumer to think that a debtor seeking some debt relief, is limited basically to only two or three options – namely, some kind of debt settlement with your creditors, a debt consolidation arrangement, or declaring bankruptcy. Concerning using the bankruptcy option, providers of debt relief and debt settlement and loan consolidation services, as well as banks and credit companies, constantly warn consumers on radio, TV and Internet advertisements, not to file bankruptcy, often generally portraying it as a negative step, thus largely discouraging many Americans who are anxiously looking for a practical way out of debt, perhaps even a cost free way of doing so, from filing for bankruptcy and causing them to see it in negative terms.

 At the same time, though, these consumers are offered the other traditional programs of debt relief not only as the better alternative to bankruptcy, but as the ONLY programs that are available for debt relief by consumers. In point of fact, however, there are other options. Most particularly, there is one unique, little-used debt relief program that is actually better than those commonly promoted. This article explores those other options.

BANKRUPTCY, DEBT CONSOLIDATION AND SETTLEMENT, ARE NOT THE ONLY SOURCES FOR RELIEF THAT ARE AVAILABLE TO A DEBTOR

In point of fact, however, there are other options that are hardly ever mentioned by debt relief businesses, but which are by far better options for consumers. In deed, one recent major extensive online investigation undertaken by an independent, New-York-based online review organization (see the link provided at the end of this article), reveals that there is actually one major option that is perhaps the best debt relief program for getting out of debt by consumers which they can use; an option that is left completely unmentioned and out of any recognition whatsoever in any discussions of that subject, namely, a method we shall call the Unique Debt Elimination or Reduction Technique.

This debt relief method is a technique by which a debtor could get out of debt free without fee, and without filing bankruptcy, without settlement, and without consolidation.

The technique, the subject of a recent full-scale and thorough formal investigation and review duly undertaken by a debt relief review organization, earned the review organization’s highest rating as the absolute best of its kind in the field of debt relief tools – a 10!

According to the reviewers’ extensive evaluation, the technique, when applied by users, is found to be widely effective with many a consumer who uses the program for debt reduction and negotiations, only providing, though, that the users actually stick with the program and follow the laid down prescriptions of the program, from the beginning to its end. It found that it works with most debtors, but most particularly in negotiating credit card debts, and, just as importantly, IF you do stick with the complete program that’s laid down for you and don’t just look for quickie fixes.

 Three out of the four persons in the review team who had personally applied the program’s recommendations in managing their debt, reported astronomical positive reduction in their credit card debt with their credit card companies, and one of them experienced that same thing with their auto loan lender, as well. (The 4th one reported he had actually failed to follow through in many of the important procedures set forth for the program).

From interviews with, and reviews of testimonials of, several randomly selected persons who had bought and used this program, the organization’s reviewers noted overwhelming positive feedback from such persons, and general customer satisfaction. They report that the program actually yields positive results on a regular basis with creditors in negotiating more favorable repayment terms and substantially reducing or even totally eliminating debts.

 On the website of the program creator, several testimonials displayed there are confirmed to be credible and authentic. Several include photos, full names and location information, clearly lending additional credence to those testimonials. Savings in forgiven or reduced debts reported by users from using the system, range from nearly $22,000 to $50,000.In deed, of the thousands of persons who have previously used this program, the reviewers are yet to find even one prior user to date who has something negative to say about the debt cure program! Nor, to contend that the program does not actually work!

TECHNIQUE EARNS WIDE PRAISE AND HIGH MARKS AMONG THE ELITE OF AMERICAN’S FINANCIAL MAINSTREAM MEDIA, THOUGH IT’S IGNORED BY THE DEBT RELIEF INDUSTRY

Aside from the fact that this unique debt reduction and debt elimination technique has been thoroughly examined and shown by reputable, independent evaluators to be a highly effective method, and that many credible debtors, as well, who’ve used it, have so attested universally, many trusted national financial media review organs, as well, have universally praised and been impressed by the technique as highly effective.

 In deed, included in this group, have included an impressive array of the elite of the American financial media who’ve reviewed them, ranging from the Wall Street Journal, the UsaToday, and the Kiplinger, to the Money magazine, the Bottom Line, and the Dollars & Sense, among many others. It is a system of becoming debt free without fee, debt relief without bankruptcy, without debt settlement or consolidation.

“Finally help has arrived for the person looking to get themselves out of debt,” wrote The Wall Street Journal, probably America’s Number #1 elite and most trusted financial publication, of this tool. “Timely information that is easy to understand, and more importantly, easy to put into practice.”

“A must have information for anyone who wants to get rid of their debt once and for all,” said the Readers Digest of it.

The Bottom Line magazine, picked the how to get rid of debt embodied in this guide as the “recommended” top of the list of the 12 best books it reviewed on the subject, adding that, “After reading and putting to the test over 12 of the top books on the subject of getting out of debt, our recommendation is the Ultimate Guide.”

Investigators from the New-York-based online review organization, concluded that, “deriving directly from the massive amount of objective facts and evidence we saw and reviewed in the field, the Unique Debt Reduction and Elimination Program of debt relief, is the proven, credible, unique, NUMBER #1 debt cure program of its kind,” adding that “this product and technique are a legitimate, reliable debt relief option that YOU can trust and rely on as an online buyer or shopper [and] THAT, USING THIS UNIQUE TECHNIQUE OF DEBT RELIEF, YOU’D BE ABLE TO:Get out of your debt, quite alright, if you just follow the prescribed rules and procedures outlined in it, through.

 But you’ll be able to accomplish that WITHOUT bankruptcy (or the possible, long-term negative effects of bankruptcy), and WITHOUT signing up for any long term debt repayment plan like debt settlement or debt consolidation, and WITHOUT paying any fees to a bankruptcy lawyer or to any operators of debt settlement or debt consolidation company, as well as WITHOUT having to pay much to your creditors on the debt you owe.” Thus, it’s a program of getting debt free without fee!

WHY IS THIS NEWER, NON-TRADITIONAL TOOL FOR DEBT RELIEF NEVER MENTIONED?

In short, what we have here is a method of debt elimination and debt solution that most debtors can just as effectively use today to get rid of debt. And, above all, aside from the effectiveness of this tool, it is the tool that is best for the debtor and personally most beneficial to him: it involves no bankruptcy or the exorbitant legal costs which it carries, no debt settlement and no debt consolidation, or the considerable costs associated with them.

 And, for the debtor using this method of getting out of debt, it is system of getting debt relief free with virtually ZERO direct out-of-pocket extra expense that they’ll have to pay to use this tool, and no payment whatsoever that they’d have to make to their creditors using this method.

The curious question is, why then?

Why? Here is this 7th option or the unique technique of debt relief, which by all accounts is as effective as, and apparently superior to, almost all the other existing techniques for getting out of debt in the debt relief marketplace today, never mentioned or heard of? A method that is far less expensive for the debtor to use, but which bestows all these special financial and other benefits to the debtor using to try getting out of debt, including being debt free without bankruptcy, without debt settlement or consolidation or the associated costs, and without having to enter into agreements for long-term payments to creditors, etc. And, here is an option or method that is almost universally endorsed and confirmed by various independent and trusted reviewers as being effective and workable in getting one out of debt.

The acclaimed author and creator of this novel 7th option method of debt relief has a ready answer for that. “Because every lawyer, debt consolidation company, debt counselor and financial consultant has a vested interest in what action you [the consumer] ultimately decide to take,” he states. “They only make money if they can convince you to “hire” them! To make matters worse, they will pretty much say… do… or promise anything to make you one of their clients. Even if it means outright lying to your face!”

He argues that the people in the debt relief industry can’t afford to have, for example, a system that entails debt relief without bankruptcy, or a system for a debtor to get out of debt free, simply because that will mean that they don’t get paid. He adds: “It’s really a no-win situation for the little guy — and for you to succeed — you MUST realize that the deck is stacked in THEIR favor, NOT YOURS, because YOU are the one with the debt problem… NOT THEM!”

Benjamin Anosike, Ph.D., has been dubbed by experts and reviewers of his many books, manuals and body of work, which dwell largely on self-help law issues, as “the man who almost literally wrote the book on the use of self-help law methods” by America’s consumers in doing their own routine legal chores – in uncontested divorce, will-making, simple probate, settlement of a dead person’s estate, simple no-asset bankruptcy, etc. A pioneer and intellectual and moral leader of the 1970s-based “you do your own law” movement and a lifelong vehement advocate and veteran of historical battles for the right of the American consumers to perform their own tasks in the area of routine legal matters, Anosike was one of the pioneers who fought and survived (along with many others of courage) the lawyers’ and organized bar’s stiff war of the 1970s and ’80s against American consumers and entrepreneurs who merely sought, then, to use, write, distribute or sell law-related self-help books and kits for non-lawyers to do their own law, upon the lawyers’ claim then of such being purportedly “unauthorized practice of law” or “practicing law without a license.” Anosike holds graduate degrees in labor economics and management and a Ph.D. in jurisprudence. Once characterized by a review of the American Library Association’s Booklist Journal as “probably the most prolific author in the field of legal self-help today,” Dr Anosike is the author of over 26 books and manuals (and countless number of articles) on various topics of American law, including 4 volumes on personal and business bankruptcy filing, in a lifetime of dedication.

Author: Benjamin Anosike, Ph.D.
Article Source: EzineArticles.com
How Electric Pressure Cookers Work

I am constantly hearing horror stories about how people looking for debt relief are being misled and given bad advice about their debt relief options. It is ridiculous that the people who need the most help get treated the worst. Some people would rather suffer in their debt than seek the help they need. This is largely due to companies that are unethical and only interested in taking your money or that they have bought into false information about these programs. We’re going to clear the air and debunk the myths about debt as well as arm you with the information you need become debt free.

Why things are the way they are?

Words like morels, ethics and honesty no longer carry the weight they once did. Human nature is such that when an opportunity arises to make a quick buck people will do anything to get their slice of the yummy greedy pie. These scam artists are smart too! They know that when people are desperate they make poor decisions. I’m not going to dive too deep into the psychology of it but you need to know what drives and motivates these people if you want to avoid them. In nature it’s the week and the young that are the easiest prey while the strong survive. The same basic concepts apply to the predators and prey of life; if you want to survive in today’s jungle you need you need to be prepared.

Knowledge is power

It’s time to attend the SCHOOL OF DEBT. First things first let’s cover the three available programs and the various names they go by.

1.      Debt Settlement also referred to as Debt Negotiation or Debt Arbitration.

2.      Debt Management also referred to as Consumer Credit Counseling, Credit Counseling, CCCS, Consumer Credit Counseling Service, Debt Management Plan or DMP.

3.      Debt Consolidation Loan – Any loan that consolidates your debt.

As you can see there are really only a few methods or programs but numerous name variations. This can be confusing at times.  Another commonly used and frequently misunderstood word is “debt consolidation”.  Consolidation is not a program type. It is a word that has a very broad meaning. Technically, all three relief programs can be considered a form of consolidation in one way or another. So remove this word from your vocabulary for now.  And I’ve purposely left out Bankruptcy as an option because the goal here is to avoid it.

Debt Settlement and what you need to know

Out of the three programs Debt Settlement saves you the most money but has a negative impact on your credit rating.  It’s a good fit for someone who already has bad credit or cannot qualify for a less aggressive program. Keep in mind that if you have good credit now but can’t pay your bills then you’re credit scores are going to drop anyway so you may want to consider this as an option and worry about your credit rating at a later time.  Also, know that you’re good credit isn’t doing anything for you right now. The whole point of having good credit is to prove your ability to payback what you borrow and borrowing more money isn’t an option if you can’t pay your bills. Anyone can enroll in a settlement program so even if you can afford to make your payments it still might be a program to consider due to the fact that it will save you a ton. You just need to determine which is more important for you having a few years of bad credit and eliminating your debt or continue paying the minimum payment for the next 26 years wasting thousands in interest.  

If you’re the type of person that strongly believes in paying back every penny that you owe I think that’s great and I completely respect your opinion. Personally I see nothing wrong with paying less than you owe to your creditors because they’re the biggest crooks out there. I could write a novel justifying why I believe this but that is another topic for another time. If you want to get a feel for how crooked the banks are then rent “Maxed Out” the documentary. I think everyone should watch it whether in debt or not. When enrolled in a settlement program you stop making payments to your creditors and start making payments into a trust account. The funds that accumulate in this account are then used as leverage to negotiate your balances down with your creditors. You can typically expect to see a savings of 50% of the original balance. You need to know that your creditors are not paid until a settlement is actually accepted. That can take months even years and it really depends on what you can afford to pay towards the program each month. The more you pay the faster the funds accumulate and the faster you get out. Settlement gets a lot of undeserved bad press.  

Just the other day I was watching “Your Money” on CNN and some guy was ranting about how creditors are not obligated to settle for less than what you owe. This is misleading because your debt gets passed onto a collections company who then settles for a lesser amount. The banks are regulated by the federal government to clear bad debt from their books when it reaches 120 days delinquent. That bad debt is then traded on the secondary market just like stocks. Collection companies buy these bad debts in large pools for as little as 15 cents on the dollar. Being in collections actually works to your advantage because they’ve bought your debts for far less than your original balance enabling them to accept a smaller amount while still making money. I have never once seen or heard of a credit card where the balance could not be reduced through a settlement. Typically you can include any unsecured debt into the program with the exception of student loans, payday advance loans, military credit cards and personal loans from American General, Beneficial and City Bank. Do not enroll in a settlement program if you owe less than $7,000 because once you factor in the cost of the program and any charges incurred there’s no benefit.

10 reasons why you should use a debt settlement company

This is for the people that think they can negotiate their debt without the help of a debt settlement company. I hear this all the time and the fact is you’re going to save more money, time and effort if you use the services of a good debt settlement company. Some people get all worked up about this and I don’t get it at all.  Never assume you know something…get the facts. Trust me on this one…you’ll thank me later.

1. Debt settlement companies have proven strategies and tactics that enable them to negotiate to lower amounts than you would be able to on your own.
2. Your creditors are not going to settle with you until you have a nice chunk of money to offer them.  Debt settlement programs give you a way to save that money by making payments into a trust account. This is great for people that are not good at saving there own money. Not to mention the fact that you’re less likely to spend money you don’t have access to.
3. The Attorneys that work for you when in a debt settlement program send your creditors legal notifications requesting that all communications are to now be directed through the law firm. This greatly reduces the harassing creditor phone calls.
4. If a creditor takes you to court you will have proof that you are actively working to repay the debt.  It looks a lot better to the judge when you show him proof of the program.
5. Creditors are less likely to take you to court because they look like bullies when you’re actively working to pay them back.
6. A debt settlement company is going to constantly be making offers to your creditor starting very low and slightly increasing the amount as you build funds in your trust account assuring that you get the lowest settlement possible.
7. You will save yourself countless hours of work.
8. You have a legal paper trail if things are inaccurately reporting on your credit report after you settle. Good luck getting it changed without it.
9. Good debt settlement companies have established relationship with the banks and can get to the decision makers that have the ability to actually do something. They don’t just call the customer service number on the back of the card (probably a call center in India).
10. You will save more money!

How to choose the right debt settlement company: I suggest a settlement company that uses a law firm and not an arbitrator when dealing with your creditors. They typically have a higher success and satisfaction rating. A good question to ask is who does the actual negotiating? Try to find a company that does not outsource the negotiation process to some 3rd party company. When shopping for the best company you want to look at the total benefit to you. Don’t just look at what they charge you but also consider their ability to negotiate your debt to a lower amount because it does you no good to use the cheapest company (fee wise) if they stink at the negotiation process or if they outsource it (losing all quality control). For instance, if a particular company is able to save you let’s say an additional 7% due to good negotiating but there fees are higher than the competition by say 3%. It would still be in your best interest to use them due to the total savings realized once the program is done. 

Around 15% of your total debt is what you should expect to pay for a good debt settlement company. This should be included in your monthly payment and there should be NO upfront fees. Also, don’t pay much attention to what these companies estimate your total savings to be because it’s just that, an estimate and no one knows what your creditors are going to settle for until they actually settle! Always watch out for the slick talking sales associates that don’t have your best interests at heart. Make sure that the company you work with is a member of either T.A.S.C. or the U.S.O.B.A. which are both groups that help make sure that state and federal guidelines are being followed. And forget the BBB (better business bureau) because just about every company in the debt relief industry has an F rating because of the nature of the business. However, I would use the BBB to check the complaint history of a debt settlement company and the law firm they use. Personally I think the number one thing to look for is a quality sales representative that knows what they’re talking about and one that you feel you have built a solid relationship with. A bad Representative can make any company seem bad and vice versa. I like to see a company that has a sharp website which shows me that they are investing in their future and are not just a fly by night company. I would suggest going with a company that has more than just a settlement program as an option. This tells me that they’re less likely to be biased towards any one particular program.  

Tax Implications and Debt Settlement

Debt settlement has become a popular approach to resolving problem debts without having to file bankruptcy. With this approach, creditors agree to accept a portion of what you owe (usually around 50% or less) to settle the account, and the remaining balance is forgiven. This technique will certainly continue to grow in popularity now that the new bankruptcy law makes it tougher to fully discharge debts in a Chapter 7 bankruptcy.

As with anything, there is no free lunch, and creditors are required to report canceled debts to the IRS on Form 1099 (when the canceled balance is $600 or greater). Therefore, the possibility exists that you may owe taxes on the forgiven portion of the debt. For this reason, many financial writers and debt counselors are strongly critical of debt settlement, to the point where they actually recommend against it just because you might end up owing taxes. But the tax consequences of settling your debts are greatly over-emphasized and this is really just a minor issue at best.

First, even if you end up owing taxes on the canceled balances, that’s because you saved a bunch of money off your original debts. The total of what you paid the creditor, plus the taxes, will still be much less than what you owed to begin with. There is still a net savings. So it’s hard to understand why this is viewed as a problem in the first place!

Second, the great majority of people who settle their debts are not required to pay taxes on the forgiven part of the balance. That’s because of the “insolvency” rule, described in IRS Publication 908, “Bankruptcy Tax Guide” Don’t let the title fool you. You don’t need to have filed a formal declaration of bankruptcy to take advantage of the insolvency rule.

Basically, “insolvent” means that you have a negative net worth – that is, you “owe” more than you “own.” As a consequence, most debtors do not have a tax liability on the canceled debts, simply because most debtors are insolvent! It usually comes down to home equity. If you have enough equity in a home (or other property) to outweigh the total of your liabilities (debts), then you have a positive net worth, and will likely have to pay taxes on the forgiven debt amounts. However, the majorities of people in serious debt trouble have a negative net worth, and are therefore insolvent. The way it works is that you can offset the canceled debt up to the amount by which you were insolvent at the time you did the settlement.

Come tax time, be sure to get professional tax advice specific to your situation. Also, be sure to read the section in IRS Publication 908 on “reduction of tax attributes,” which requires people using the insolvency rule to reduce their basis in such things as rental property, loss carryovers, etc. Most of that probably won’t apply to you, but again, get specific advice before winging it.

So, the message is, relax about paying taxes on canceled debt balances. That should be the least of your concerns if you’re upside down financially. Don’t let the misguided criticisms of financial writers (who haven’t done their homework) discourage you from looking into one of the most popular and flexible options for achieving debt-freedom.

Debt Management and what you need to know

Debt management, by standard financial definition, involves a 3rd party that assists a debtor with the repayment of his or her debt. Debt Management Plans also known as DMP’s are designed to help people with heavy debt and high interest rates and get their financial situation under control. A simpler definition of a DMP is a structured repayment plan set up by a designated third party as a result of personal initiation.

A debt management plan entails a series of steps, which the third party service works on with the help of the debtor. The initial step typically involves compiling a list of all creditors including the amounts owed to each of them. Some creditors aren’t eligible to be included in a debt management plan, and typically, secured debt such as car loans and home loans are not included. Once a list of creditors is compiled and the amount of debt is totaled, the debtor’s total income and expenditures, such as mortgage or rent payments, car payments, cost of living expenses, and so forth, are totaled as well. The third party agency assisting with the debt management plan then helps the debtor to determine the maximum amount of money available to allocate to the plan for debt repayment. In many cases, a third party service will attempt to settle some debt amounts and exclude or lower any interest charged during the repayment period. If you have less than 3,000 US dollars (USD) of debt, you may not qualify for a third party (DMP) service.  

Consider the following when looking into a debt management plan (DMP)

• You’ll need a minimum of $3,000 of debt (and not currently in collections). There must be enough debt to make the program beneficial for you. You can add old utility bills if your current debt is over $3,000, but the benefits to you is none, the debt management company will simply be acting as the paying agent.
• Accounts in collections for 30-60 days may be included in the DMP but there is no guaranty that it will be accepted. However the DMP 3rd party will attempt to get proposals accepted but again there is no guaranty due to the collection status of the account.
• Accounts included will be closed by your creditors and if you have multiple accounts with a creditor the other accounts will be closed.
• Accounts that have been in collections for more that 60 days have an even lower chance of being accepted
• All accounts need to have been open for a minimum, of 6-9 months if they’re to be included. If you would like to include an account that is younger you can but the proposal will not be sent out to the creditor until the account has matured.
• Typically your interest rates should be above 14-17% and you should be making the minimum payments. This is considered to be a hardship program so if you’re making more than the minimum payments the less likely you are going to be approved.
• Once you have enrolled it is recommended that you not pursue any new financing for 12-24 months.
• A debt management plan is not a loan.

Debt Management and your credit

A creditor does have the right to report that you are in a DMP. This does not affect your actual credit score however when attempting to obtain new financing this can sometimes be a disqualifying factor. Typically banks want to see you out of a DMP before they lend you money. This mostly applies to larger loans such as financing obtained for the purpose of a refinance or the purchase of a new home. If you make your payments as designated through the program then your credit scores will most likely improve. DMP’s are a a good fit for people that have very high interest rates, don’t need a significant reduction of their monthly payments and don’t want to hurt their credit.

Debt Consolidation Loans

Consolidation loans are just that, they are loans that consolidate your debt. Just be sure to use the same approach when looking for one of these loans and shop around for the best rate. You may have heard that the more your credit gets pulled the worse your credit gets. This is only true if you are doing it on a regular basis and for different types of loans. The credit bureaus know what type of financing company has looked at your credit report and they expect you to shop around. You should be safe if you apply to a few companies as long as you do it all within 20 days or less. This rest is self explanatory.

The debt reduction wrap up

Now, there are plenty of reliable debt relief companies out there and the debt relief services they offer work very well when applied to the correct situation. Problems begin to arise when trying to sort out the good companies from the bad ones. Every company you deal with is going to give you a reason on why the program they offer is right for you. Your best bet is to do as much research as you can on your own and find out which plan is best for you. Knowledge is power and a few hours of research now will save you a lot of time and money down the road. Let face it, no one knows your situation better than you. If you have questions about any of this be sure to seek the advice of a trusted professional in the industry.

For additional insight and more information about your debt relief options please visit http://debtskinny.com where we take pride in being the trusted online resource for your debt help needs.

Author: Jeff M Johnson
Article Source: EzineArticles.com
Pressure cooker

If you are interested in Bad Credit, this article is what you must have been searching for. You just have a look at it to confirm our claim.How to Find Suitable Debt Consolidation Financing.People tired of wading in the pool of debt will often seek out debt consolidation financing solutions. Some people land in debt because they lost their jobs, went through costly divorces, fell victim to an accident that disabled them, or extended their credit beyond their financial means. To make things even worse, many of these people file for bankruptcy, believing there is no way out. Bankruptcy leads to additional problems, since the bankruptcy stays on your credit report for up to ten years.

Many debt consolidation financing solutions offer debt reduction programs for relieving debt. They claim to reduce your entire amount owed through the process of negotiation. Some debt consolidation financial solutions claim that they will get your bills reduced up to 70 percent. Many of the debt financial services work to help people avoid bankruptcy, eliminate the hassling phone calls from creditors and collection agencies, as well as lower their payments up to 70 percent. They will combine your entire amount into one monthly payment, thus claiming to make it easier for debtors.

Therefore, if you are searching for debt consolidation loans, be advised that there are several online sites that offer such services; and many of these websites are run by scammers, act illegally by using advertising tricks that lure debtors into their hands. Once the debtors become involved with the companies, they soon learn that they are in deeper debt.

This is why it is important that you learn your rights under the law. It is also important to investigate any source that claims to loan you money for relieving debt. You will also need to learn your choices before jumping into any agreement that can send you out in left field. One of the best ways to get educated on debt consolidation is to visit libraries or go online to government resources, searching for debt consolidation financing.

Bad credit and debt consolidation go hand in hand; if you owe money, you are subject to courts if you can’t follow through with payments. If you have borrowed a mortgage, a car, or a personal loan–which are secured loans in most instances–and the loans’ obligations are not met, you may be subpoenaed to court. Any courtroom is demanding, and many of the courts will consider both sides offensive. On the other hand, the participant concerned in negligence is frequently judged as untrustworthy. If you want to keep away from stressful situations, then it is imperative to construct shrewd decisions ahead of spending cash you don’t have.

How Does Debt Consolidation Stack Up Versus Debt Settlement?

Debt settlements differ slightly from debt consolidation. It is important to build or repair your credit rating, since nowadays you practically need perfect credit in order to get a home, car, personal loan, and so on. If your credit has any record of negligence, most companies will turn you down. If you need help with credit repair, you might want to hire an expert who can get results; otherwise, if you have skills, then it is important that you take care of your credit issues immediately. Putting things off only add up more trouble. On the other hand, getting things done now brings forth results, since the effort you put in will be obvious.

Debt settlement solutions work to reduce your monthly installments, as well as reducing the balance you owe. Some debt settlement organizations will work to reduce your bills up to 70% and claim to help you do this in less than two years. The companies will also help you rebuild your credit and avoid bankruptcy.

Although few debt settlement agencies and debt consolidation companies will claim to help you get out of debt fast, you must remember that none of us has the potential of being free from debt entirely. We all pay utilities, rent, mortgages, insurance, and so forth, so if you believe that you will be debt free in as little as two years, then you are misleading yourself. The debt settlement and debt consolidation agencies may help relieve you of pending debts, but they will never be able to help you free your life of debt entirely.

Finally, the advantage of debt settlement versus debt consolidation is that you will reduce your bills, instead of paying off your regular amount owed. Debt consolidation is merely the act of combining all your bills, rolling them into one, and paying one monthly installment.

Avoiding court judgments, lawsuits, liens and other penalties is central to meeting repayments on your monthly debt. If you stumble on a corner in your life where you get a glimpse of difficulties required to meet these demands, you may want to glimpse into debt consolidation solutions obtainable that can remove you from harm’s way.

How to Find a Debt Consolidation Firm that Offers Low Interest Loans

Are you searching for a low interest loan for debt consolidation? If you have bad credit, you might feel the journey is hopeless. Debt consolidation loans are loans that help a person reduce his debt payments by combining all debts into one installment. The downside is sometimes the debt consolidation programs will cause your debts to go up $500 or more per month; and it will take longer to repay your debts since the programs will deduct fees and rates of interest.

Most low interest loans for debt consolidation require collateral to approve the loan. In this event, you want to be careful as to what collateral is expected of you, since some loans may require home collateral. If you cannot repay the debt, then the lender will repossess your home and put you in the streets. However, if you have quality collateral, it might be in your best interest to take the gamble if it presents a sound way out of debt.

Most loans are attached to rates of interest. This means that you will pay the interest rates and the monthly installment toward the amount owed. The advantage of loans is that they
present a way to get out of debt; therefore, you want to look for the loans that offer low interest rates and monthly repayments.

How should you go about looking for a loan?

To get started, you want to avoid advertising tricks for loans, since most of the tricks are presented to lure in candidates who are less knowledgeable of loan procedures; thus, after the loan is approved, the rates of interest will be higher than average. Therefore, instead of going online searching for a loan, you might want to check with the local banks. If the banks cannot offer you a low interest rate loan for debt consolidation, then ask for referrals.

If you are repaying credit on your home, you may want to consider selling your home. You could also search for a lower rate of interest loan and lower monthly installment loan combined. Few mortgage loans will include a debt consolidation solution into the agreement.

How to Find the Best Consolidation for Debt

United Way is a useful organization that works closely with your creditors to free up your debts. Most creditors prefer to work with trusted organizations, rather than work with the debtor or attorneys. Nonprofit organizations and debt analysts that work to free up debt will analyze your debts, come to an agreement on the amount owed, and decide on a worthy amount to repay the debts-all while at the same time helping debtors to restore their credit.

Another method for debt consolidation is to approach the creditors on your own. Few creditors realize how difficult times become for families and individuals; therefore they will work with you to free up your debts when they hear your story. Otherwise, if you are not geared up to handle the process yourself, then the credit assistance agencies are your best bet.

Be aware that debt consolidation programs are subject to charge costly fees and interest rates. Therefore, learn about the programs for debt consolidation for stepping into any agreement. United Way, once more, is a trustworthy source for debt relief and restoring credit.

In addition, you will need to obtain copies of your credit reports to verify your debts. If you notice any wrongful charges on the report, be sure to argue with the credit bureaus to clear up any allegations made against you. On the credit report, you will notice your debts in order, and therefore, it can help you to see which debts can be torn down quicker than other debts. Furthermore, be advised that if you make any payments toward your debts, you are at less risk of injunctions, summons, of subpoenas.

If you make no effort at all to repay your debts, then you are subject to risk, since some creditors will alert the courts. Finally, start paying now and avoid problems later.

When you already feel indebted and your bills are then sent to collection agencies you will become even more stressed. Once you are in the hands of collection agencies, be aware that most of these people could care less how they get their money. Some have even sent personnel to debtor’s doors claiming to be the law. This is illegal, but debtors often fail to stay current with the laws; rather they are only worrying about how to pay their debts.

How Effective Is Debt Consolidation with Credit Card?

People who are seeking to establish credit will often apply for a major credit card or for a personal loan. On the other hand, people who are in debt will often apply for credit cards, believing it is a solution for debt consolidation. In both instances, the people in the scenario are both risky candidates for getting a loan. If you do not have credit, it can be just as difficult to get a loan as if you had bad credit. Credit is necessary these days, which is why you should work on building it before you actually need it for something important.

Regardless of the situation, you must stay on track if you find a way to consolidate your debts. Once you begin the process of debt consolidation, you must keep track of your money, spending, and so forth. When you keep track of your money and spending, you are taking the first step to consolidate your bills and manage your money at the same time.

Credit cards are nice to have; in fact today, credit cards are essential, as you cannot make purchases in some instances if you do not have a major credit card. Pre-paid credit cards are newer cards that offer a similar effect to credit cards. The cards allow you to deposit your money into the card and use it as though you had a major credit card. The downside is that these cards have fees and this will not help you to consolidate your debts.

It is possible to get a credit card if you have bad credit, but it may come at a costly fee. The interest rates are often higher than on cards given to individuals or families without credit problems. So if you are bent on getting a credit card to consolidate your debts, think again; if you don’t, you could end up in more debt!

Be advised that it is illegal for creditors to call you before and after certain hours of the day. Finally, it is also illegal for creditors to call you, threatening to take you to court.

If you have bad credit and need to consolidate your debt, you should know your rights, so you can avoid being bullied by your creditors.

Student Loan Debt Consolidation

There are several ways for students to find relief from debt by consolidating their bills. If you are in over your head in student loans, you should be advised that there are several options for relieving your debt.

To get started you, must determine the loan amount and type you owe. Next, you should contact the lenders or college financial agents and request a loan drop. If you are in debt over your head, then this is the best solution for consolidating your debts.

If you fail to seek debt consolidation solutions, then you are at risk of lawsuits, tax refund losses, and possibly of risking wage garnishes. Again, whether or not you can ask for a cancellation will be dependent on the type of loan you took out, when it was issued, and for how much it was issued.

While it is not likely, some schools issue loans under fraudulent pretense. If this is true, then you can demand a cancellation of the loan.

Also, if you suffered from an accident or became ill and the injuries or sickness have disabled you for life, then you can ask for a cancellation on the loan. Military personnel and particular organization members qualify for a cancellation in student loans also. If you are able to get the loan dropped, imagine the money you will have to restore your credit and eliminate other debts.

Finally, if you have paid your monthly installments with good faith until times got hard, you may qualify for a postponement in payments. This is called a deferment request. The student lenders may present you with the “forbearance” option if you ask for a deferment. The “forbearance” means that the lenders will reduce your student payments temporary until you are back on track.

As a student, you have numerous ways to manage your debts if you are currently in over your head. Do not assume that there is no solution; instead, spend your time researching instead of worrying.

This article about Bad Credit must be made as a benchmark of selecting which articles to read and which not. And then the purpose of this article would be served.

Author: Gunvor Drysen
Article Source: EzineArticles.com

Honorably and ethically rid yourself of burdensome debts using the little known Negotiation Strategy, without having to experience the loss of control and privacy associated with filing for bankruptcy, consolidation, or credit counseling.The inability to reduce debt and saving money are the two biggest obstacles preventing Americans from living financially sound lives. National statistics show that money problems play a role in 80 percent of all divorces. One in 54 households will declare bankruptcy. Debt is at an all-time high, particularly credit card debt. The total amount of consumer debt in the United States is nearly $1.4 trillion.

If you are one of the millions of Americans burdened with debt and have trouble making those never-ending monthly payments, help is available. You don’t need to go it alone. If you are a typical American family, you have $25,000-$30,000 worth of credit card debt (excluding mortgages, car loans, and student loan payments), and you’re paying $500 to $900 every month in endless minimum payments.

Like you, many people continue making their minimum monthly payments believing that they are making progress. They are living in a state of denial saying “Someday, somehow, something will happen. Things will get better, and my debt problem will be gone.” Then years go by and they only find themselves in a downward spiral getting nowhere. They have paid their creditors thousands of dollars but their debt load never gets lighter.

For example, if you were to continue making minimum payments on a $9,000 debt, and not add any more debt, it will take you over 10 years to pay it off. You will end up spending many thousands more than the original amount and 80% of the money paid will have gone to interest and fees. Most people add more debt as they go, so the reality is this – Without an aggressive approach to terminating debt once and for all, you will NEVER get rid of debt.

Today, people have options. There are four strategies for dealing with problem debt you will see advertised: Debt Consolidation, Consumer Credit Counseling Services (CCC), Bankruptcy, and Debt Negotiation. Each strategy must be considered carefully!

Debt Consolidation – The Common Approach

Unfortunately debt consolidation is the most common solution people think of when they fall victim to financial problems. It is a sad fact that about 75% of people who consolidate their debt find themselves in much deeper financial trouble than they were in to begin with. All consolidation loans do is transfer debt from one place to another and is invariably a short term fix with long term pain. A debt consolidation loan will not reduce the amount you owe.

 You will still pay back 100% of the loan plus interest. This is not going to get you out of trouble and most of the time will only make things worse. Again, consolidation is not a plan to get out of debt but is instead just getting new debt to pay off old debt.

If you were to decide to consolidate, you would need to qualify first. Qualifications include equity in a home you own or other valuable, good credit and debt to income ratio. Most people burdened by debt find that even if they wanted to consolidate their debt they couldn’t qualify for the loan anyway.

Once you have taken out this loan, you have just gone from an unsecured debt to a secured debt – and gambling with all your assets. Consolidation loans are spread out over a 15 – 30 year period, leaving you exposed to losing your assets over the life of the loan. If you run into further difficulty in the future you stand to lose your home, car, and valuables.

The fundamental problem that people run into is that once the debts are paid off by the loan, they discover they have a new line of spending potential: empty credit cards. It’s not long after these accounts are cleared that they are run up to the limit once again. This will leave you with both the consolidation loan and maxed out credit cards to repay.

 How are you going to repay the loan and the credit cards when you were unable to pay the previous debt in the first place? You will find yourself back in the bank for a second consolidation loan, extending your debt and making your debt problem even worse.

Bear in mind that being in debt leaves you with less cash you need to buy and plan for life’s necessities. Although a consolidation loan may give you a lower payment and a little more breathing room, consolidation is not going to leave you with the cash to get you and your family through the next 10 to 30 years.

Consumer Credit Counseling Services (CCC) – Feeling of False Security

Consumer Credit Counseling Services (CCC) programs have a failure rate of 85%. They simply aren’t effective. Here’s why; you meet with a counselor who analyzes your monthly budget. The counselor will submit a proposal to your creditors for a reduction in the interest rates. You would then pay a monthly payment to them and they would then distribute that monthly payment to your creditors. These programs generally take 5-7 years to complete.

 The theory here is that your overall payment per month is lower due to the counselor’s success at obtaining lower interest rates and more favorable terms with the credit card companies and banks. This approach is most often recommended by the banks themselves.

Here are the facts: CCC Services were created in the late 1970’s when credit card and loan companies began to notice that many people were having problems making their minimum payments and defaulting on their debt. In short, the so-called “non-profit” companies are owned by the credit card companies and banks! CCC agencies are funded by commission by the credit card companies based on the debt recovered from you, normally around 12 – 15%. This means that for every $1,000 you give them, they can take as much as $150.

If you’re paying them a service fee of $20 per month, and the creditors are paying them $75, you can quickly see that CCC agencies are not working for you but for the creditors.

In addition, you have no insight into what the CCC agency is doing on your behalf and no control over the repayment process. They send in their single monthly payment, with no idea of how much is going to which creditor. Since most counselors are busy people who work based on high volume, getting a return phone call can be difficult.

It’s key to know that with CCC programs, you still pay 100% of the debt plus a lower interest rate. The debt you walk in the CCC is what you walk out with. With all things considered, it works out to be about the same as your current minimum payments.

Bankruptcy – The Last Straw

Today more people than ever are turning to personal bankruptcy as a way of solving their financial problems. Estimates indicate that 2003 will see nearly 1 in 70 Americans filing for bankruptcy. People owing as little as $5,000 are unknowingly filing, not knowing of alternative methods of eliminating their debt. The reason people take this hasty action with such a low debt amount is the harassment and overwhelming pressure from impatient collectors trying to recover their money. In the case of Consumer Credit Counseling agencies, once they find that they are unable or unwilling to help, they will suggest bankruptcy as the answer – unconcerned of the effect it will have on your future.

In bankruptcy, a court order forces all commercial creditors to cease and desist from attempting to collect the debts you owe them. Depending on the bankruptcy declared (Chapter 7 or 13), it stops wage garnishment, reverses judgments, and generally wipes out debt.

For some people, bankruptcy is the only sensible option. If you have $60,000 in debts, and you’ll never earn more than $1,200 per month, then you’re broke! The sooner you eliminate the debt, the sooner you’ll have a fresh start. With more than 1.4 million bankruptcy filings in 2000, Congress is passing legislation that will make it tougher to declare bankruptcy.

In bankruptcy, certain personal property is treated as exempt. The banks and creditors cannot touch that property in attempting to recover the money owed to them. Your home, car and other personal effects like clothing, and other assets are considered exempt, but this varies from state to state. Any property that is not exempt is liquidated and distributed to the creditors under the supervision of the court. Since most people entering bankruptcy have only exempt property anyway, there’s usually nothing left to distribute, so the creditors typically get nothing.

Seems like a good deal? Many people mistakenly see bankruptcy as a good, low cost way to rid themselves of debt. There are other costs associated with bankruptcy that make it a very bad solution for most people. The cost of filing bankruptcy itself is minimal. Depending on what state you live in, you can expect to pay anywhere from $400 on up to $1,600 for the whole process. That’s just the beginning.

 The bankruptcy will stay on your credit report for 10 years – and on your court records for 20 years. The seemingly “low cost” method will cost you dearly as it will follow you for the rest of your life. If you ever apply for a loan, job, apartment or insurance, one of the first questions normally asked is “Have you ever filed for bankruptcy?” And, for the rest of your life, you’ll have to answer “Yes.”

You might be able to eliminate your debt, but the effects emotionally and the effect on your personal life will last for many years to come. Consider applying for a terrific job after you have filed bankruptcy. These days, employers will run a credit report to determine how you faired financially. This will effect whether the employer will give you that dream job or not. Even if you do get the job and your employer later runs a credit report on you, you will still have to explain the bankruptcy. While employers can’t fire you because of a bad credit report, they can certainly limit your future promotions.

Future purchases are affected as well; after several years, you may opt to purchase a home. If you’re in sufficient shape at that point to qualify for a mortgage, you’ll pay a higher interest rate than the average consumer who has never filed for bankruptcy. Assume you want to purchase a $100,000 house a few years after filing bankruptcy. You make a $10,000 down payment.

This will result in applying for an $80,000 mortgage. While your “good credit” neighbor would obtain an interest rate of 4.5%, you would get a rate of 7%. While it seems that the extra 2.5% difference is not bad for having filed bankruptcy in the past, it’s what you will pay monthly where you will feel the pinch. That extra 2.5% on a mortgage will increase your monthly payment by $200 per month with the total of your payments reaching more than $70,000 over the 30-year life of the mortgage.

Besides being a devastating blow to your credit, a bankruptcy can also be a very stressful and embarrassing decision to continually have to explain to every potential lender. If you have no choice, then you should proceed, understanding the consequences.

However, the majority of people who take this method of debt elimination don’t know what they’re getting themselves into or the consequences thereafter. They are desperate, and they get talked into filing bankruptcy by the collectors or attorney without understanding the impact on their financial future.

Keep in mind that personal bankruptcies are usually unnecessary as there are better options available. Many people are forced, against their wishes, to file bankruptcy to protect themselves from aggressive creditor tactics or attorney. Ultimately, bankruptcy still means failure to employers and creditors.

Debt Negotiation – Light at the End of the Tunnel

Few people realize that there is another solution to burdensome debt, an approach that levels the playing field between you and your creditors, without having to go to court. The debt negotiation strategy will put you back on the road to financial freedom and in control of your life again.

The Negotiation Strategy allows you to turn that $25,000 of credit card debt into $12,500 or even as little as $9,000. In most cases, our clients have debts totaling $8,000 and have successfully saved them thousands while maintaining a reasonable credit rating. With a professional debt negotiator working for you, your debt can be cut in half or less.

How it works: Put yourself in the shoes of a manager of a collection department for a major credit card company. You know that bankruptcies are at an all-time high and that the chances of collecting on the outstanding debt worsen as the debt ages.

You have the opportunity to close your books on a delinquent account by collecting 50 pennies for every dollar owed by the debtor, or take a chance on never collecting a single penny by trying to hold out for the full value. You also realize that once the debt leaves your bank (usually after six months or so), it will go to a third-party collection agency.

The agency will take at least 15%-20% commission right off the top of whatever they collect, and they are unlikely to collect more than 70% of the debt even with the most aggressive tactics. So you’ll probably never retrieve much more than half the money anyway. When you look at it this way, collecting 50% now doesn’t seem like such a bad deal.

The way it’s described, it sounds easy. You might be thinking, “I’ll the collectors and do this myself.” You’ll reach the “customer service team” and the representative will inform you that other banks may settle for 50%, but their bank never settles under any circumstances. Of course, they do have that “great” hardship program for you. After you’ve called a few times and received the same treatment, you’ll probably end up with the idea that debt negotiation doesn’t work. The banks will rarely take a debtor seriously. They simply don’t believe you and they think your hardship story is phony.

 The banks are quite prepared for the amateur do-it-yourself negotiator. They have the telephone scripts set up so that by the time the conversation is over, you will feel guilty about the money owed, and their lame hardship plan sounds like a great deal after all.

Having a third-party professional on your side makes all the difference in the world. Once your creditors realize that they are talking to a professional, someone who knows the laws and regulations, they quickly change their tune. A negotiator will obtain better results than you could ever obtain on your own, simply because all of the bank’s tactics are stymied by the fact that they can’t talk directly to you. They can’t apply psychological pressure to you since this is filtered out by your Professional Debt Negotiator.

Consider this: Creditors pull out all the stops when you fall behind. They have gangs of collectors ready to pressure you with carefully scripted techniques and mind games. They have attorneys and collection agencies ready to step in and go after you full throttle.

You need to level the playing field. The best and only way you can concentrate on improving your financial future is to let a professional deal with the aggravation of the nonstop phone calls. Bottom line – If you’re looking for the most effective, low-cost, and fastest way to terminate your debt problem once and for all – Negotiation is the answer.

About The Author

Author: Brian Sabalinski
Article Source: EzineArticles.com
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