debt Archives - Advicentips

The art of debt management

Articles, Debt Comments Off

Mar 012013

In making any purchase, you want that the item purchased must have a long term utility. However, while selecting the debt management technique a shift in the approach is quite noticeable. We find that short term debt management techniques like debt consolidation loans are much greater in use. Nevertheless, this is not double standard on the part of people. The choice is mostly influenced by the immediate pressure of debts.

Debt settlement techniques, which have a longer standing effect, are the rule of the day. People know them by the name of debt management in the UK. Debt management aims to strike at the roots of debt, instead of simply countering the after effects of debts. When debts are not allowed to increase, the use of debt consolidation loans and other short-term debt management techniques become redundant.

Why is debt management preferred to have a longer effect? The realisation is the result of people accepting that debt consolidation loans can give succour for only a time being, but not for ever. Even when borrowers are able to pay all the debts at a particular point of time, is there a guarantee that debts will not arise again? What shall one do at that time? Taking a new debt consolidation will not be a viable solution. The loan providers will be the first to deny loans to borrowers who have grown a habit of borrowing. And what about your home against which the loan is taken? Will it have sufficient equity left to be used for any other purposes? No! These are the reasons that have pushed borrowers towards seeking long term debt management. Certain borrowers are perplexed at the inclusion of debt consolidation loans in debt management, when the debt management agencies themselves say that debt consolidation loans are of not much good. To this end the debt management agencies reply in the following manner; “We do not recommend the total ban on the use of debt consolidation loans. What we recommend is a ban on the misuse of debt consolidation loans.”Debt consolidation loans are rampantly used in the UK. It is because of the ease with which people are able to draw debt consolidation loans that people have started spending rashly; thus being further weighed down by debts. Debt management agencies have come down on this habit of the people of the UK. Since debt consolidation loans abet people in taking more debts, debt management agencies also criticise debt consolidation loans. Debt management makes a planned use of debt consolidation loans. Compare the situation with an ailment that a person is facing. Debt consolidation loans will be like a surgery to be performed. However, doctors will first try to cure the ailment through oral medication. The oral medication is to be given through debt counselling. Only when oral medication is not able to cure the ailment, doctors will suggest surgery, i.e. debt consolidation loans. Debt counselling is referred to the advice to borrowers about the manner in which they can cure a debt problem. The advice is not general in nature. A Debt counsellor, who is an expert, will sit with the debtor during a few sessions to discuss the details of the debt problem. When debt problem is at its preliminary stage, it will require efforts from the borrowers own side. A Debt counsellor offers certain suggestions through which borrowers can bring upon a marked change in their finances. Debt management agencies have given a new look to certain age old principles of coping with debts. It is these principles that are made use of to inculcate debt sense in borrowers. It is during these sessions that the debt counsellor will access the use of debt consolidation loans. The factors that will be considered while making the decision are as follows:. What is the amount of debts that the debtor owes to one or different creditors?. Does the borrower have sufficient available income to repay debts on his own without using debt consolidation loans?. The nature of the debts- whether debts are accruing higher interest rate, and if they have already reached their repayment date. The various tips that you learned during the debt management process must not be forgotten during repayment of debt consolidation loans. While debts owed to creditors have been settled, you continue to owe to the loan provider. Never must the borrower relax until the final instalment of debt consolidation has been made.

Ann Gibson

Debt negotiation on credit cards

Articles, Debt Comments Off

Mar 012013

Debt negotiation on credit cards is often referred to as credit card debt settlement. Whenever you make a credit card payment- or even pay your utility bills- it usually gets reported to one- or all- of the three main credit agencies. This activity will influence your credit score, which will determine your future credit status. But what do you do, if you find that you can no longer make the minimum payments on your credit cards? If your accounts are behind, or about to fall behind, you can turn to a credit management company, that will help you with your debt negotiation.

When you enrol in a debt negotiation programme for your credit cards, you can stop making payments directly to the credit card companies and begin to pay the debt settlement company directly, which can be a relief in itself and perhaps even help you to save money. The way it works is simple. The debt management company works with your creditors to come up with a lower payoff for your accounts. You, in turn, make one monthly payment to the management company, which holds the money in a trust, making a one time payment on your credit accounts, at the pre-arranged time.

Debt negotiation on credit cards have helped many individuals to find peace of mind and relief from mounting credit card debt. However, it is important to realise that being enrolled in debt management will lower your credit score, whilst you pay back the debt management company.

So, how do you find a reputable firm to negotiate your debts for you? There are many sources to help you get started, such as the Federal Trade Commission. It is very important to remember that you can rebuild your credit in the future, so you should think very carefully about how you proceed with debt negotiation. There are many companies out there that will promise you a clean credit report for a few hundred dollars. Many of these offers are either completely illegal, scams- or both. So, make sure that the company that you will be dealing with has your interests in mind, when dealing with debt negotiation on credit cards.

Jeff Lakie

Advantages of consumer credit counseling

Articles, Debt Comments Off

Mar 012013

Many individuals have been helped by consumer credit counseling to take control of their finances and to eliminate debt. Consumer credit counseling can work for you by teaching money management skills which can help you throughout your lifetime.

Consumer credit counseling can help you better understand your credit situation. It can help you understand the costs associated with misusing a credit card and make you a more informed consumer. Consumer credit counseling is especially useful for people suffering from huge debt burdens. They can benefit from consumer credit counseling as it can help them find a way out of their present financial crisis. If you have a weak credit history and low credit ratings, consumer credit counseling can show you ways to repair your credit. By making an appointment with a credit counseling agent, you can get all of these advantages and find out what more the agent can do for you.

Many debt management companies provide consumer credit counseling agents to advise and help individuals find a way out of debt. Debt management agencies help you reduce and consolidate your loans by negotiating with your creditors. Their credit counselors are the ones that teach their clients better ways of avoiding debt in the future and to find ways to saving money to pay back their current debts. When selecting a debt management company, be sure that they have qualified credit counseling personnel.Their teams of expert and experienced credit counselors, who have wide knowledge in the finance field, can help the layperson better understand their credit situation and how to improve their financial standing. The consumer credit counseling agent will first understand the situation you are in. Then they will formulate ways in which you can save more money, become debt free and start on your way towards financial freedom.

These are just some of the things consumer credit counseling services can do for you:

– They can teach you how to better manage your household expenses.

– They can help you deal with harassing collectors.

– They can teach you understand relevant financial issues surrounding your credit.

– They can advise you on how to reduce your debt burden.

– They can help you avoid situations where you may have to declare bankruptcy.

The counselors can work with you to create financial plans such as a savings and budget plan, and help you find ways to sticking to them. Comprehensive plans can lead you to better manage your cash inflows and outflows.

Taking some time for consumer credit counseling can help you get rid of your debt problems and start you on your way to a secure financial future.

Jakob Jelling is the founder of http://www.cashbazar.com. Visit his website for the latest on personal finance, debt elimination, budgeting, credit cards and real estate.

Jakob Jelling

5 Secrets to Getting Out of Debt Fast

Articles, Debt Comments Off

Feb 072013

As they stare down at a teetering pile of bills, so many consumers wonder how they racked up such a large debt. The answer boils down to simple mathematics.

“On a basic, fundamental level, the problem is created by spending more than you make,” says Brad Stroh, co-CEO of the San Mateo, California-based Freedom Financial Network, LLC, a company that specializes in debt resolution services.

The reasons for doing so, he notes, are varied:

. Spending addictions . Lack of budgeting (mistaking the amount of money coming in and going out) . Loss of income (reduced hours, layoffs, forced to leave the workforce) . Increased costs (health-related expenses, fuel and other basic living expenses) . A personal hardship (divorce, medical illness, loss of a loved one or other major changes in a person’s life)

You can, however, get out of debt-but it takes commitment. Here are 5 steps to accomplishing your goal.

1. Start Planning-and Saving “The only way to guarantee solid financial footing is through proper planning-and that’s where most consumers go wrong,” Stroh says. “Proper planning means monthly budgeting of cash flow, combined with saving for long-term security.”

Stroh recommends saving at least 5% of your income to ensure long-term financial security.

“Of course, this percent will vary by age group and the individual’s financial goals and objectives,” he says. “Younger people can expect to spend their early years saving less of their income, paying off student loans and debts incurred during periods of lower income. Older individuals should be planning for retirement and saving a larger share of income.”

2. Seek Professional Help If you are facing financial hardship, do not procrastinate when it comes to seeking professional advice.

“People often wait too long,” Stroh says. “If someone is living paycheck to paycheck, is behind on any revolving financial obligations (including credit cards), is using credit cards to pay for necessities, or is facing collection, he should consider getting immediate advice from a professional debt management firm or financial advisor.”

3. Stop Spending If you continue to spend money, despite your ever-growing debt, you likely have a bona fide addiction that requires psychological intervention.

“Debt problems are frequently symptomatic of more fundamental personal issues, such as reticence to address difficult financial problems,” Stroh says. “Spending addictions can have many causes, including lack of personal confidence and fulfillment. Similar to many other addictions, a spending addiction can fill a void in an individual’s life-albeit with a fleeting source of satisfaction. People with spending addictions constantly strive for the ‘high’ that they receive from buying clothes, cars and other goods. This leads to a long-term problem when they cannot meet the consequent financial turmoil that comes when the bills arrive. For anyone who may think he has a serious spending addiction, we advise seeking professional counseling or therapy to resolve the fundamental sources of this addiction.”

4. Start Communicating If you’re like many consumers with outstanding debts, the last person you think about speaking with is the creditor-the company you’ve been avoiding at all costs.

“Not contacting your debt creditors to discuss and develop a plan for paying, settling or reducing the principal amount and/or interest on the debt” is one of the worst mistakes you can make, says financial expert Ivan Gelfand, president and CEO of Pepper Pike, Ohio-based Ivan Gelfand, Inc., and author of “Your Money, Your Future” (to be published in April).

He also recommends contacting relatives or friends for temporary assistance in reducing debt and making payments, which will lower your outstanding debts’ interest rate.

5. Conquer Denial-Today! Many consumers who recognize-and even accept the fact-that they have a spending addiction refuse to address their problems, according to Stroh.

“Budgeting is not fun,” he says, “but dealing with creditors is even less fun. Many people will therefore bury their heads in the sand, hoping their problems will go away. Unfortunately, outside of winning the lottery or getting a windfall inheritance from a long-lost uncle, budgeting and consulting with a professional counselor are the only ways to successfully resolve financial problems.”

——— Fox Symes assists all Australians discover the truth about their debts and how they can rapidly reduce them. There are methods available to the Australian public and you can discover how to use these to assist you in reducing your debt with a free phone consultation from Fox Symes. Visit http://www.foxsymes.com.au or contact them directly on
1300 361 204.

Rob Sallay

Debt Handling Solutions

Articles, Debt Comments Off

Feb 062013

Sometimes debt can seem overwhelming. In those instances, or even before things get that far out of hand, get back to basics and try some of these debt handling solutions.

BASICS – Lower insurance deductibles for your homeowners, renters and vehicles policies where appropriate and save money. Don’t take chances on bouncing checks; instead get covered with overdraft protection and pay about the same as what it would cost for one bounced check to cover our account for an entire year. Ask your banker about packaged account services. Many offer free savings and checking accounts with free overdraft protection and checks, free online bill paying and more. When you shop, check your receipts, even for groceries. Many times items ring up at incorrect prices. Sometimes store policy allows for no errors, meaning you get the items free if it wrings up wrong. So carry along a handheld calculator or pencil with small notepad to tally up your charges.

REACH OUT- If you have medical debt, the first thing healthcare offices try to do is get you to charge the bills or refinance your home, etc. STOP. Before you take such a drastic step, check with legal counsel. There are often other steps to take first. For example, notify the billing parties and tell them you need to apply for financial aid. Many have forms to complete, and although they may be lengthy, remember they’re for free money to pay your bills. Reach out, take forms and fill them out. Then set up minimum payment arrangements for the remaining balances, even if it’s just $10 a month for 30 years. Healthcare bills are not like credit card debt and do not need to be reported to the credit bureau in the same manner.

Also reach out with merchandise and return any recently purchased items that you can for a refund. Credit cards and mail order companies generally allow you 30 days to inspect your purchase. Return any you can for refunds. If purchases are beyond the 30 days and for various reasons don’t hold up to their end of the “bargain;” i.e. they broke already or never worked right to begin with, get on a letter writing campaign pronto. Write the place of purchase and copy the manufacturer, the distributor, the Better Business Bureau and your state Attorney General’s Office. State the reasons our product is faulty and that you want a refund. It’s often rewarding to get help with other entities like these. No need to go it alone!

So before your debt gets out of hand, take charge and get back to basics. Put some of these debt handling solutions into practice and make the most out of what you have.

For more information go to: http://www.ampleadvice.com

Article Source: http://www.articleplanet.co.uk

Debt Stacking – Fast Track Out of Debt

Articles, Debt Comments Off

Feb 062013

You go to the mail box and scan – a couple fliers (nah), your magazine subscription (yes!) and bills (groan). Every month the bills show up and as you sigh and take out your check book you wonder if you will ever be free.

Each month you pay the minimums and although you KNOW you’ve got a handle on it – you are not charging your credit card or accumulating new debts anymore – it seems that you will be paying the minimum fees forever.

Did you know that HOW you pay your debts can affect how soon you will finishing paying them off – even if you keep paying the same amount for debt every month? Of course you might be able to get a consolidation loan, but if you’re not eligible or are not interested then there are several other things you can do.

It’s not always the easiest to figure out the mathematics, but there are three steps to quicker debt relief – guaranteed.

STEP ONE – Create a list.

List your smallest debts first followed by your largest high-interest debts (credit card) and then your largest low-interest debts (Lines of credit and taxes).

Plan to pay the minimums on all debts with these goals in mind.

STEP TWO – Small bills first.

They may not be the highest interest, but every bill that you are paying some interest on means you are usually only paying minimal amounts on the principal. Multiple debts are also a sure way to bring your spirits down. Paying off small debts first is a quick way to start checking them off – and freeing your mind.

STEP THREE – Move the payments along.

When one debt is paid add the funds to the next debt. For example, say you’re making $75 payments to a small debt. When the debt is cleared add the $75 to the next debt on your list. If the next debt had a minimum payment of $100, you will now pay $175 until it is paid off. When that one is finished, take the $175 and add it to the next payment and so on.

STEP FOUR – Save the cash!

Don’t forget that when your debts are cleared you have set yourself up for a better financial future. The best way to take advantage of your new situation is to use all the money you were spending on debts and start investing or saving it every month.

With this strategy your debts will clear faster meaning you will pay less interest, you will see progress as you clear small debts first, and you will not be tempted to use the funds for personal use instead of debt repayment.

It is a worthwhile goal to get out of debt. Seeing that goal come sooner and teaching yourself discipline sets you up for a brighter financial future. You OWE yourself that!

For more information go to: http://www.ukisolutions.com

Article Source: http://www.articleplanet.co.uk

The Effects of Consumer Debt

Articles, Debt Comments Off

Feb 062013

Consumer Borrowing

Consumer borrowing in the UK has now crashed through the 1 trillion barrier. 80% of this is due to credit card borrowing, loans and mortgages. How are people managing to handle their debt and what effect is debt having on families today?

The National Consumer Council reports that 6 million families in the UK are already struggling to make repayments towards their debt, and Citizens Advice reports that over the last 6 years, they have seen a 44% increase in the number of people seeking debt advice. This may be just the tip of the iceberg. There must be many families in the UK who have debt problems, but are not aware of the free help and advice available.

Tackling Debt

According to a DTI survey carried out in 2002, a household is likely to be over-indebted if:

25% of your annual income is spent on repaying Creditors
50% of your annual income is spent on repaying credit and mortgages
You have 4 or more companies that you owe money to.

People find it difficult to make repayments for a number of reasons. Generally, the underlying cause is some kind of change in personal circumstances such as job loss, divorce, illness or a new baby. In these instances some people may resort to more borrowing in order to pay creditors or household bills. This is not always the best option.

Effects of Over-Indebtedness

The personal effect of struggling to repay debt can be far reaching. Sometimes a lack of financial awareness can lead to stress, depression, anxiety, mental health problems, relationship breakdown and even suicide.

Raising Financial Awareness

The Government recognise the need to raise financial awareness amongst the general public. The financial cost of debt is not only on an individual level, but there is also a cost to society in general.

People who experience stress due to their situation, will probably seek advice from their GP and may take time off work, therefore, this has an effect on already hard-pressed NHS and productivity due to absenteeism.

People who have had homes repossessed need to be re-housed, generally by the local Council. Those who seek legal aid due to debt issues also incur a cost to the taxpayer.

The Solution before the Problem

Will raising financial awareness alone tackle the issues of debt problems? It helps for people who are already struggling with debt, but are there other areas the Government should be looking at?

If you pay your creditors on time, regardless of what it takes to pay them, you are classed as a good payer and therefore, not a risk when it comes to additional borrowing. In fact, your finances could be in turmoil and you could be taking money from one card to pay another but you may still obtain even more credit.

The freedom creditors have to advertise loans, credit cards and mortgages could be challenged as well as how decisions are made regarding lending.

If people, who are currently in financial difficulty, find they cannot borrow more money, they should be made aware of the free financial advice that is available. Free Debt Management Companies such as Payplan, www.payplan.com, can negotiate repayments with creditors so that monthly payments are reduced and become more manageable.

Nicola Bullimore

Debt Reduction – The perfect guide

Articles, Debt Comments Off

Feb 062013

Many people may say that the process of debt reduction is common sense and obviously, the best way to handle your finances is to pay with cash.

Just because you have incurred debt, doesn’t necessarily imply that you’ve mismanaged your entire financial life. Once you suspect that your debt is starting to get out of control, you may want to consider a quick diet for debt reduction.

The first thing you should do in the process of debt reduction is to stop incurring even more debt. In pursuing your debt reduction goal you must freeze your spending, especially if you don’t have the income to support that debt. After doing so, the next step in debt reduction is to get a plan. Your debt reduction plan must be a roadmap that takes you from debt to debtless. To do that you need to know how much your total debt is and how long it will take to pay it off, given your current payments. Once you know that, you can look forward to the day when your debt is gone!

Look for money saving opportunities as you start to dig into debt reduction and closely examine your situation. When following your debt reduction plan, you’ll start seeing many opportunities to save money, for instance, those low-rate credit card offers that you find in your mailbox almost every day. Knowledge is useless unless you put your plan into action. Formulate your debt reduction plan today and, most importantly, follow through on it!

The next step in debt reduction is tracking credit card offers and loan offers. When you need to turn to another bank for cheaper financing, you’ll have already done the research and know which banks to contact. Also, you need to track offers from your existing credit accounts.

Another important aspect in debt reduction is paying on time no matter what it takes! It is better to borrow money to make sure your payments get there on time.

Debt management is a continuous process so stay on top your situation and keep most of your money!

David C Skul