Debt Clear Direct

by SS&SS

Budgeting Versus Bankruptcy – What is the Real Solution to Your Debt Problems?

Nowadays there seems to be an increase in radio commercials and other advertisements regarding debt solutions. Especially with these more difficult economic times, there are many people in need of a way out of debt, but unfortunately the choices can be overwhelming. We like to take a brief look at bankruptcy versus budgeting, two of the major options you have for getting rid of your financial problems.

Can budgeting be the solution to your financial problems, or is this too simplistic? Well, that really depends on your particular circumstances. You need to ask yourself whether you could pay off your debts within a few years while maintaining a reasonable standard of living.

You may need to make some sacrifices, and you need to keep your long-term goals in mind. Remember that your goal is freedom from debt, so in the short term you may have to give up some of the luxuries in order to achieve financial freedom.

Be honest with yourself regarding your financial situation.

What was it that led to your overwhelming debt problems? In some cases, there can be an unexpected emergency like a health problem that is not covered by insurance. However, you most likely have been guilty of living beyond your means and need to make adjustments as soon as possible. Otherwise, your problems will only get worse over time.

Sit down with a pen and paper in hand. Get all of your billing statements together, along with a calculator, and figure out exactly how much you owe and what you are paying each month. If you are barely able to make minimum payments each month, you may be in over your head.

While bankruptcy should not be your first solution, it should probably not be the last resort either.

The advantages of bankruptcy include protecting your home and other nonexempt assets from creditors (depending on your state’s laws). You can protect pension plans and other assets if you declare bankruptcy. Too many people liquidate these assets or get a home equity loan in order to pay off unsecured debt like credit cards. This puts their valuable possessions on the line if they can’t pay off the loan in the future.

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by Center for American Progress Action Fund

Plastic Money Woes ? Credit Card Problems And Debt

Credit cards may have helped people in carrying and using money in a compact form but theyve also made you susceptible to overspending. Credit cards or plastic money can be a blessing and a curse both! Buy now pay later is a very attractive proposition, but its basically signing your own death warrant. Usage is one thing; abuse is an entirely different matter!

Although the facility of using money and paying it later may seem appealing but in actuality it may cause some considerable problems. The added interest rate on the actual used amount may pile up to an alarming scale which alone may be difficult to pay off (the entire payable amount is even more). The interest amount in many cases may keep on adding up each month instead of staying at a fixed value. This compound effect means that your interest payable will keep increasing each month if you dont pay the minimum amount.

In case one finds themselves in such a situation where the debt amount may have reached an uncomfortable level, they can consider choosing one or more of the following methods to help relieve the debt issue and maintain an acceptable income-expenditure balance.

One of the first practical approaches can be to attempt to reduce your expenditure wherever possible.

Even small savings of a few dollars or so help save thousand dollars over the long run which you can use to pay back compound interest. You can save up in areas such as food expenses, traveling, money spent on hobbies and luxuries like buying new gadgets or going to the movies. Some of your savings can also be used to pay off your debt instead of keeping them in the bank.

A second option to pay off debt in shorter period can be to find a second job. The income generated from the second job can be very helpful in reducing your debt quickly and can also give you more money to cover your other expenses. However, this would require a lot of hard work.

In case of debt owed to more than one company, finance professionals may suggest to first pay off the debt with smallest value. Once thats done, youll have more money to redirect to your larger debts and hence make it easier for you to pay back all of your debt sooner. After clearing the lowest debt payment, the next lowest debt should be considered. In this manner, the due payments can potentially be paid off faster than trying to pay off the debt with highest amount first.

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by MoneyAware

Debt Free is the Way to Be

Things have changed and in these current credit crisis times, the new status symbol in America is to be debt free. During the easy money days of the 80′s and 90′s when financing was everywhere and money was thrown at you by the banks, the next best car or biggest home was the status symbol of choice. Now America is waking up to the tyranny of over financing and the burden of debt and the new symbol to be proud of us acquiring a completely debt free status.

Have you been able to pay off your house yet? Are you still paying that stiff monthly bill for your BMW or Mercedes or big truck? These toys of the past are all wonderful, but the credit crisis and current economic times has led to a reevaluation of what is appropriate. I am all for these wonderful luxuries of life, but now is the time to pay for them with real earned monies and shed the burden of financing.

People across the country now are boasting of their hard work to pay down or pay off their house or cars in a time when so many find themselves financially upside down. The freedom of acquiring debt free status is truly the status symbol of our decade.

Unfortunately debt holders are still all too common according to current statistics but I for one am breathing a sigh of relief as we seem to be seeing a swing in priorities to acquiring debt freedom. Instead of leveraging your life away payment by monthly payment for a new car that requires huge financing, consider saving and buying a vehicle that you can pay off immediately. If you haven’t already paid of your home, consider the tough but important task of creating a plan to pay off your house debt burden faster than your stated loan terms.

For those that have a long way to go towards achieving debt freedom, do not fret, it can seem like a monumental task that is set before you, but there is help and hope available in many forms.

The federal government provides many resources, including debt counseling or credit management programs, and there are many private organizations that are dedicated to help the willing. With the willingness and the dedication, it can be achieved and you will thank yourself afterward.

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