Debt Clear Direct

by Blyzz

Debt Relief Secrets ? Tips To Deal With Your Debt Problem

Debt is the sort of subject that people keep to themselves. There is a lot of interior monologue going on about debt, but not much real conversation.
That is precisely the atmosphere that allows for a lot of mistaken notions to occur. While some mistaken ideas about debt may be academic matter or of not much consequence, some can be serious.
In fact, to really tackle your debt problem you have to understand it. Part of that means understanding your own spending habits and personal situation. I can’t help you there.
But the other part means understanding debt and how it works.
Here are seven common myths people believe about debts.
The first: debt is a recent phenomenon.
Many of us think that it is our modern, overextended lifestyle that contributes to debt and that in ancient times, people just did not have the same problem with money that we do.

That’s not true. Provisions for bankruptcy protection appear in the United States Constitution (1763).
Debtors’ prisons were common in the industrial revolution. And in Biblical times, people who were in debt might sell themselves into slavery to appease a creditor. The truth is debt has been around about a half hour after the creation of money.
The second myth: debt shows a lack of character.
Now it is true that a disreputable person can easily get himself or herself into debt, but debt is not in and of itself a character flaw. Debt occurs because of a convergence of unfortunate financial circumstances. This may be avoidable or unavoidable. However, the resulting debt is no reflection on the character of the debtor.
Debt is a problem, but it’s not evidence you are a failure.
The third myth: debt is just something you have to live with.
This myth is particularly dangerous because it’s like a long, slow illness. You really cannot afford to leave it untended too long.
I sometimes think that debt is a lot like obesity. If that is your problem, you have to fight it. It is foolish to ignore the problem or pretend it will somehow magically go away on its own.
Debt robs you of your future prosperity; it drains the resources you and your family need.
The fourth myth: everybody is in debt.
It’s easy to see why people believe this, because so many people are massively in debt. But do you know what? A good many people have no debt. In fact, the majority of people in the U.S. have manageable amounts of debt in proportion to their incomes. Overwhelming debt is not something most people deal with.
That’s good news if you have overwhelming debt. Do you know why? It means it’s possible to live another way. In fact, most people do. If they can do it, so can you!
The fifth myth: it takes forever to get out of debt.
That myth is true if you just wish you were out of debt or you have some lackadaisical approach to it. Do you know that there are coaches who can take an unfit person and train him or her to complete a marathon in six months? People can lose 100 pounds in a year. Some people can make a fortune or complete a degree in four years. The point is that great things can be accomplished even in unlikely individuals if you do two things: get a plan and follow the plan.
Do you realize that many people have paid off even huge debts in fairly short periods of time with a strictly executed, sensible plan and maybe some coaching and counseling.
The sixth myth: debt doesn’t matter.
Fortunately, this one is not as common as some of the others. However, it’s very destructive. Typically, people who buy into this myth grew up in households that were very comfortable with high amounts of debt. This does not always create the proper perspective for future financial security!
Debt wastes large amount of your money and can cause your family to burn up high amounts of income on average-levels of lifestyle.
The last myth that people believe about debt is that you can’t handle debt (you need to hire an expert to help you).
It is true that there are lots of people and businesses who specialize in helping people with debt. But be very careful. To enjoy good financial health, you have to learn how to take care of your own money.
This means that handing over a large amount of money to a debt company that promises to take care of your problems (so you can walk away) may be a dangerous decision. Here’s why. If you don’t understand what they’re doing with your money, you are giving them a good opportunity to rip you off. It can be the financial equivalent of handing your wallet to a stranger and saying, “Take what you want.”
Second, if you don’t know how you wound up in debt, you won’t be able to get out.
Debt consolidation is an approach to handling debt but it’s a term that is frequently used carelessly online. Technically, debt consolidation just repackages or reorganizes debt in a way that makes it more favorable.
However, many companies who offer to settle or negotiate your debt (get your creditors to take less than you owe) call their services debt consolidation. There are a lot of myths out there about debt and how to manage your debt. An education can be the best defense!

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by MANILA IMPERIAL MOTOR SALES . . . .

Quickly Reduce Credit Card Debt

If you have accumulated high credit card balances and are struggling to meet your obligations, you may consider negotiating a settlement with your creditors as a way to quickly reduce credit card debt. Debt settlement is a completely legal and ethical way to get out of debt. The incentive for your creditors to settle increases once you fall more than 90 days past due and they believe you may have no choice but to file for bankruptcy protection.

Carrying an excessive level of credit card debt can take a lifetime to pay off. Balances remain high for the vast majority of people with over 95% of the monthly payments applied towards interest and fees. This is no way to live! You can quickly reduce credit card debt within as little as 18 – 30 months, if you are committed to becoming debt free.

The various options people consider when faced with such difficult circumstances include Consumer Credit Counseling (CCC), a debt consolidation loan, personal bankruptcy and negotiating a settlement.

The most you can achieve with consumer credit counseling is a reduction in your interest rate. A debt consolidation loan is designed to pay back your creditors over a longer period at a slightly reduced interest rate. This path may seem desirable relative to your current situation, but this will likely take anywhere from 4 – 8 years. Should your financial circumstances weaken, you will be no better off than you were at the outset. While filing for personal bankruptcy may be unavoidable in some cases, it is a painful path to take, which will haunt the filer for anywhere from 7 – 10 years. With bankruptcy, your case file becomes a matter of public record, easily located via Internet search by future employers, landlords or creditors.

Debt settlement represents an honest and ethical alternative to addressing an unmanageable level of unsecured debt.

There are many legitimate companies with trained negotiators that can obtain a settlement ranging anywhere from 15 – 50% of the original balance. All you need to do is save the amounts you were paying the credit card companies every month, letting those balances build in your own bank account. This will provide the bulk of the funds to settle, and you will, within a relative short period of time, quickly reduce credit card debt balances. Debt negotiation firms typically charge 25% of the canceled debt, which in addition to late fees and penalty interest results in settling at 55 – 60 cents on the dollar all-in!

Unfortunately it is very difficult for consumers to negotiate directly with lenders. Reputable debt negotiation firms should understand each bank’s process for handling delinquent loans and manage each situation to the client’s maximum benefit. Negotiating a settlement is not always about what you know, but often who you know. Dealing with a cooperative person can make all the difference between obtaining a settlement offer or not. Creditors and collection agencies are not going to write off thousands of dollars without a fight, so you should be prepared to persevere. In the end, you will have reduced your outstanding debt balances and regained control of your life. Negotiating settlements in this manner is the most effective way to quickly reduce credit card debt without exception!

Credit Card Debt Consolidation: A great way to restructure your finances
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by bill barber

Dangers of Debt Consolidation

As everyone knows, everything comes with a variety of pros and cons attached to it. Unfortunately the same is true for debt consolidation: it can be the best option for certain financial circumstances however, but it does have its dangerous points that you will need to be aware of if you wish this solution to work for you.

If you are aware of these points you can avoid debt consolidation pitfalls and make debt consolidation work for you.

Here are a few of the dangerous points to be aware of.

First of all, you must be aware that even though you have consolidated all of your debt you have not completely eliminated it; what you are doing instead is taking a variety of different debts and combining them into one easy to manage monthly payment. The fact will still remain that you owe money to the creditor which you will still have to pay off if you wish to be completely debt free.

Many people seem to have the wrong idea about their debts getting totally resolved with debt management.

This is the reason that many of them begin to reuse their credit cards and create a deeper debt while they are also still making payments on the original debt.

Misunderstanding this concept about your bills being completely paid off after you have received a debt consolidation loan may very well cause your debtors to trap you into some very serious trouble with your debt. Because of this issue you need to have a very clear understanding how debt consolidation works in helping you to manage your debts while you are working your way out of a financial mess.

Another dangerous aspect of consolidation loan is when you use your assets, such as a home, land, a boat, car or anything else of value as a collateral.

Even though you might qualify for a higher loan with a lower total interest payment if you use such assets, you are putting that particular asset at risk if for any reason you default on the loan.

This happens to many different people who happen to under a misconception that tend to think that because they have gotten a debt consolidation loan their debt is paid off. These are the people that most often take out a loan that has the longest repayment period, which, in turn, will bring down their monthly payment amount to the minimum amount. At this rate they feel comfortable enough that they tend to forget about the debt that they are still carrying — a debt that will need to be paid, sooner or later.

When such persons aren’t worried about the debt, they tend to overspend and add even more debt onto their plates. When the newest credits become hard to manage they may default on their consolidation loan as well and as a result will lose the asset that they used to secure the loan originally.

Instead of improving their credit rating with smart use of a consolidated loan, they just dig their hole even deeper.

When you are applying for a debt consolidation loan you should not take out more than you are comfortable with paying each and every month as well as, only the amount that you will need to pay off the debt. The more of a loan amount you receive, the more debt you will have, which you will have to repay with interest. If you think the original debt was giving you a headache, then stop and think what a bigger debt will do for your financial comfort.

Debt consolidation is available to help you out of a financial debt pit. Using it wisely and avoiding these dangers will save you a lot of trouble and headaches later.

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by Kate’s Photo Diary

Debt Settlement Basics

Nearly 40% of all people find themselves in difficult financial circumstances that they never would have predicted. Thats nearly half! If all of those consumers plummeted into bankruptcy, imagine the detriment to society in general. In fact, approximately 85-90% of all charged off debt goes uncollected, leaving the rest of society to pick up the tab in the form of higher costs. Is the best answer bankruptcy? Not always. Keep reading to learn more about a viable alternative to bankruptcy called debt settlement.

What in the world is debt settlement?

Debt settlement is an aggressive debt relief option. A reputable debt settlement company uses professional tactics to negotiate with creditors on a consumers behalf in efforts to secure a settlement for a percentage of the payoff balance.

This is considered payment in full. By opting for debt settlement, many consumers avoid bankruptcy and get back on track financially.

Who is debt settlement for?

Consumers who have fallen into difficult financial hardships, such as unemployment, serious illness or injury, divorce, care of an ailing parent or family member, and many other circumstances. Settlement is for those consumers who want to ethically honor their debts to the best of their ability and avoid filing for bankruptcy in the midst of extreme financial struggle.

What should consumers prepare for?

First, debt settlement is not a quick fix, and any company that says so is most likely not a reputable company.

Consumers should know that their credit will take an initial hit. However, most consumers who qualify for debt settlement have poor credit to begin with. After high-interest credit card debt is paid off, consumers are in a better position to begin the process of credit restoration. Consumers should also be prepared to commit to active participation in a debt settlement program. The process of debt settlement requires active communication and participation from both the client and the debt settlement company. So by no means is debt settlement taking the easy way out.

How can consumers find a reputable company?

Before choosing a company to work with, consumers need to do their homework. First and foremost, find out about a companys fee structure. Never go with a company that charges fees before actually settling at least one consumer account. To do so is actually illegal. Recent FTC rules stipulate that a settlement company must settle at least one consumer account before collecting a fee for doing so. Consumers should also look for a company that isnt pushy with sales, but seeks to educate the client on the option that is right for their unique situation. Consumers can also check the BBB to learn more about the companys history and any complaints against them, as well as how those complaints were resolved.

How is debt settlement a tool for consumer advocacy?

When a consumer files for bankruptcy, everyone involved loses. When practiced in an honest, ethical way, reputable debt settlement benefits all who are involved. First, settlement helps relieve a very clogged court system by reducing the amount of litigation for debt accounts, along with the amount of bankruptcy filings. Debt collectors and creditors also recover funds that wouldve otherwise been lost to bankruptcy. And the lower the number of bankruptcies, the less that society in general has to pick up the tab in higher costs.

Reputable debt settlement really does have the potential to benefit all involved. If youre one of the 40% caught in a difficult financial hardship and are considering bankruptcy, look into debt settlement first. It may be the relief you are looking for.

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What Debt Help is Available?

‘Debt help’ can mean many different things – a debt specialist may be able to suggest various ways you could tackle your debt problems. If you are looking for debt help, it is important that you understand your options before you decide what action to take.

Debt advice

This could be all you need to help you get your finances under control. Various organisations offer free debt advice, such as help with budgeting, or information about which debts are priority and which are non-priority.

When you contact a professional debt adviser, they should be able to offer you advice on where you can improve your financial situation now, and how you could keep it under control in the future.

They may also offer advice on whether a debt solution could help, and if so, which one may be best for you.

Debt management plan

A debt management plan might be suitable for you if you cannot make the agreed repayments towards your unsecured debts. Debt management involves negotiating with your unsecured creditors, asking them to accept lower monthly payments, based on your current disposable income (income minus essential expenditure).

You can ask a debt management organisation to act on your behalf, or do the negotiations by yourself.

Debt management plans can be flexible, which means that if your financial circumstances deteriorate and you start finding payments difficult to make, then you or your debt adviser may be able to re-assess your situation and negotiate with your creditors again, asking them to accept lower monthly repayments.

However, creditors are not legally obliged to accept any changes to the original repayment plan – nor are they legally obliged to stick with them if they do.

Plus, when you enter a debt management plan, you are defaulting on an original agreement. This will be shown on your credit rating for 6 years, which could affect the cost/availability of credit for that time.

Be aware that you will be paying your debt off for longer if you reduce your monthly repayments. It may also mean you end up repaying more than you originally expected – this is due to the interest added to your debt each month.

Debt consolidation

If you would like to turn multiple debts into one manageable debt, then debt consolidation may be right for you.

It works by taking out one loan which will pay off the money you owe to your existing creditors. This means that you will now have one monthly payment to make instead of several.

A debt consolidation loan can also let you reduce your monthly payments by repaying the loan more slowly than you would otherwise have repaid your debts. However, this may mean you end up paying more overall due to the interest.

Note: Debt consolidation loans would not be suitable for people who don’t think they can commit to making the loan repayments as well as keeping up with their other commitments.

IVAs (Individual Voluntary Arrangements)

An IVA is a formal agreement between borrowers and their creditors. They are designed to give the borrower an affordable way out of debt, and are often seen as a preferable alternative to bankruptcy.

An IVA may be suitable for you if:

1. Your unsecured debts total around 15,000 or more.

2. You don’t think you can repay your debts in a reasonable amount of time.

3. You want to avoid the risks of bankruptcy, such as losing your home.

The IVA must be accepted by 75% of your creditors (by debt value – creditors who collectively ‘own’ 75% or more of your debt), before it can go ahead. If it is accepted, the agreement will last (in most cases) for 5 years. Once the IVA has ended, any remaining unsecured debt will be written off.

If you can commit to regular fixed monthly payments, then your creditors will allow you to make lower monthly payments, based on what you can actually afford. When entering an IVA, all interest charges are frozen, which means you will know exactly how much you will repay (as no interest is added each month).

However, IVAs also have their drawbacks. For example, it will remain on your credit report for one year after completion, which may make further credit difficult/more expensive to obtain. Plus, if you are a homeowner, you may be required to release some of the equity you own in the 54th month of the agreement. This is so you can repay more of your debt.

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