Debt Consolidation Blog

Archive for February, 2010

More and more people are unknown about the debt relief programs, with which they can manage to get out of debt. In turn, many keep asking me is there any debt relief programs available from government? For this my answer is yes. The unawareness of many people about the government relief programs giving a way for many companies to cash out as, debtors are willing to pay a fee to learn the ways of getting debt relief grants from government.

Government grants are those that are provided by federal government of America to its citizens, who are in need of such assistance so that they can achieve financial relief from debt mounted. There are many different debt relief grants from different government agencies aimed at getting out of intolerable debt. One might feel confusing on how and which government department to approach and request information on various grant programs. Debt relief services can help you in this matter of identifying correct resource, where you have to fill the application form and submit it to concerned departments.

Qualifying to various grant programs depends on the terms and conditions of the each program. The different grants includes medical, mortgage, tax rebate, credit consultation, students or single mothers and first time buyers. All this grants are designed to help that particular group with an intention to get them out of debt.

Here are some of the government grants designed for debt relief:

Tax rebate: federal government has came up with different tax rebate programs like first time buyer and sends the grants from time to time to a particular demographic population.

As the foreclosure rate has increased from past couple of years due to rise in unemployment rate and increase in interest rates, foreclosures has sky rocketed. Therefore to assist home owners in need, federal government came up with different alternatives. For more information on different relief programs, contact your local department of housing or a reliable debt relief service for assistance.

Many people go into debt only because of lavish spending habits. Controlling the lavish attitude of consumer can help him stay away from debt. For this reason federal government funds non profit credit counselling firms to assists citizens of America with budgeting and debt management to avoid filing bankruptcy by debt ridden consumers.

A medical bill is another area where many consumers go deep into debt with unknown expenses like medical bills for with medical insurance will not cover. To avoid such uncertain expenses and keep citizens out of debt, federal government came up with grants that are available through family services, local and state health departments and hospitals also.

Articles on this site have been acquired from a variety of sources.  No content on this site should be considered financial or legal advice.

As more number of people is falling behind on payments, lenders are using collection agencies to help collect on overdue accounts. For a consumer, dealing with collection agencies is toughest task, as the collection agencies implement hard methods to collect debt from consumers.

For this reason, many of my clients ask for a ways to handle collection agencies when there accounts are with collection agencies. If you are also facing collection calls, then here is a guide for you on how to deal with collection agencies.

The moment you want to negotiate with collection agencies, your intention must be to pay lump sum amount and avoid collection harassment monthly or it may be due to two reasons:

If a consumer negotiates monthly payment and then falls behind on payments, the every effort made to bring the finance charged come down will go in vain as they will change the negotiated finance agreement and often there are chances they increase the amount due.

As the account already in collections means it has caused enough damage to credit score and the effect will lessen as the account ages. But, if you make an activity on the account then it start to show impact on the credit score as a recent activity. If you agree to pay monthly and fall behind on the account then it will again show its impact on the credit score.

In an effort to negotiate with collection agencies, start gathering information about the outstanding debt. The information includes creditor, collection agency, delinquent date and outstanding debt of all your outstanding debt.

Prioritize the debt outstanding in terms of urgency. For example: if the debt is still with creditor then it will be best idea to negotiate that particular debt first before it reaches collection agency as the original creditors are easy to deal with. This is because negotiating a payment plan with original creditor is better than letting the account go to collection agency.

At the same time the debt with more number of months delinquent must have least priority. For example: if the account is already 60 months old then this will off the credit report in another 24 month, so why you want to bring it current and affect your credit score.

As the negotiating activity with collection agencies requires a lump sum, start accumulating funds in your savings account. Create a savings plan and amass the funds to pay off the collection accounts in lump sum.

Once you have funds to pay off the out standing balance, start negotiating with collection agencies by offering one time lump sum amount for settlement of debt. a potential collector will accept the offer made from you and settle the debt. in case the collector accepts your offer make sure to ask the acceptance of debt settlement offer in written form like mail, fax etc.

After making payment, ask for written receipt of payment and follow up to make sure that payment information is reported to credit rating agencies for adjustments of credit score.

Articles on this site have been acquired from a variety of sources.  No content on this site should be considered financial or legal advice.

Are you out of control related to your finance? Yes, this is the position of every American. On an average every American holds at least three cards and as a result huge number of people is drowning into credit card debt. This is situation especially when the card holders can’t control their spending habits that lead to incur debt. 

Well carrying number of cards and incurring debt is easy but actual problem arises only when he has got pay back the amount. Paying back to multiple cards every month by remembering the due date of each card and making payment before particular date is not that easy especially when you don’t have sufficient funds to meet the payments. At this stage, one should obviously think about debt consolidation.

Debt consolidation is a process that unearths the solution to management of multiple lines of credit. It works by taking a debt consolidation loan and using its proceeds to pay of the existing small debt with multiple creditors. With debt consolidation, you will have to make only one payment every month.

The other benefit with debt consolidation loan include is that only one interest rate charged over the entire debt. Previously, as the debt is handled by multiple creditors, they use to charge their own interest rate for the amount you owe them. But with debt consolidation as all the debt is brought into one account, the interest rate charged will one rate over the entire debt, which will benefit to you in to ways. One is that you don’t have a trouble calculating the interest rate on each debt and second one is as one interest rate is charged over entire debt, the rate at which the debt multiplies is constant and usually less when compared to earlier.

There are different debt consolidation options when you are looking to consolidate credit card debt or any other kind of unsecured debt. With unsecured debt I mean, the debt that does not possess any kind of collateral.

Credit cards: when you are dealing with credit card debt, then one way to consolidate is to transfer all the debt on different credit cards into one card usually that charges 0 percent on balance transfers. This is best method to stop your debt multiplying and pay off as much debt as possible to clear the debt with ease. This process is very simple where you can find out the offers lying with different credit cards companies that usually charge 0 percent as an introductory offer. This offer normally last for 6 months to one year after you transfer the balance from other credit cards.

Personal loans: this is other way to consolidate all your existing debt. There are many creditors in the finance market to lend you for consolidating debt. One can avail the personal loans facility to consolidate.

Mortgage refinance or home equity loan is other option. Using this option one can easily afford to avail the consolidation loan at lower rate of interest as you will be keeping your house as a collateral. But with this option, the lender will reduce the risk of lending and the borrower will increase the risk, because if the borrower defaults on payments then he may loos home that was kept as collateral.

Articles on this site have been acquired from a variety of sources.  No content on this site should be considered financial or legal advice.

Are you worried about the way your debt is accelerating? Interest rate is the cause of such situation. There are many definitions with which it can be defined. At present we can think of interest as the amount paid for lending their money or the price that is paid for using the borrowed funds.

This way of paying money in form of interest, is a way of letting your hard earned money go into pocket of rich people. It is very destructive, as the most of the amount you pay every month will go towards paying the interest charged on the amount you borrowed. If you keep paying minimum amount then the interest charged over the amount you borrowed will be more than the actual amount you borrowed.

For this reason if you want to get rid of debt as soon as possible, then the first action you must take is try to reduce the interest rate over you debt. Getting the interest rate reduced is not actually that hard on your credit cards. If you are in that particular situation, all you have to do is collect all the information regarding your credit card account and then call credit card company. If you are successful in playing a hardball over phone then you will manage to get nice reduction in interest rate that is charged over the debt by credit card firm.

This technique will work particularly holding most of the debt in credit card accounts and you were able to keep up with the payments monthly on debt till date. Don’t worry if you had made few late payments as that will not much affect the chances of interest rate getting reduced.

If you feel tough to handle this task, you can call a debt management company DebtPlan to help you reduce the interest rates on credit card debt. this task requires skills and experience to handle as it involves calling credit card firm to discuss about interest rate reduction.

Before calling, know all information. Have a recent copy of your credit card statement and make sure you know the interest rate that is charged and credit card account number. With in the statement you might be able to find phone number of the card company that you need to call.

Collect information about other offers that come in your way recently like zero percent interest rate or low interest rate in you mail box. And also make a figure of the target rate to convince your lender over phone.

Once you have all the information that I have mentioned above then it’s time for you to make a call. First, ask to connect to concerned person or authority, who is allowed to change your interest rate.

Finally, when you are with concerned person over phone, effectively convey your finance ability and commitment to pay credit card balance and a need to reduce the interest rate. Tell them that you are very convenient to keep the balance on that particular card but have other offers that could easily save few dollars every month.

Effectively dealing with creditor will help you reducing interest rate to most competitive rate and pay off the debt with ease.

Articles on this site have been acquired from a variety of sources.  No content on this site should be considered financial or legal advice.

An average person in America is suffering from debt especially during the present economic turmoil. With rise in unemployment, inflation and interest rates lead to these serious concerns. Decrease in income or loss of income, increased cost of living and carrying cost of debt made the situation worse.

Many finance experts say that by systematic working through all bills will ensure working out of this situation. If you are in such debt concerns then you are at the right place as this article will tell you how to find few extra dollars from your budget to repay the debt.

Before actually going into the solution to the problem, first I want to tell you the actual cause of the problem. The main cause of the debt is you really spend more than what you earn. Unless you recognize this you won’t be able to work out the situation and even if you able to get out I am sure it will not take much time to come again here. For this reason if you don’t want to repeat the mistakes first know the cause of the problem then working out the solution will give you results.

Here is a way to find out if you really spend more than what you earn: if you are already in debt and uses the lines of credit to fill the gap instead of living on savings then obviously you are spending more than what you earn.

The other way include, budget, many people think that they are staying within the budget. To make sure add up all your finance obligations. Budget planning tools can help you in calculating annual income and expenditure then tells you exactly how much more you spend than you earn.

If you found yourself to one among those who spend more that they earn then its time to shift for savings from your budget. Savings is all about purchasing a product for lesser price than its actual price. If you could manage to find such things then do so. It is not limited to insurance or credit cards but it includes many more areas like child care, gas and electricity, food shopping, phone and broadband, international calls, boiler cover costs, digital TV etc.

Here are the areas that can affect your budget and find few dollars saved to pay the debt back.

Gas and electricity: you can cut your energy bills by finding competitive supplier. Remember in this case, it’s a same gas, same pipes, same electricity and safety but the thing is only price and billing processes changes. Where these are the only things really matter when you want to save cost.

Food shopping: shifting to local brands or store brands will help you definitely save few dollars. Many think that saving during food shopping lowers the quality of goods purchase. It means they needs to compromise on quality but this is not the case as the store brands also maintain same quality at much lower price.

And cutting other expenses like phone calls especially international calls or by sticking to matter will help you cut costs. Like wise internet, digital TV etc will help you save few dollars to pay of the debt.

Articles on this site have been acquired from a variety of sources.  No content on this site should be considered financial or legal advice.

Your Money Tapes
The Dollar Stretcher Blog
by Gary Foreman
I’ve often heard it said that the longest distance is between the human head and the human heart. What is meant is that there are many things that we know intellectually. We understand them and have no doubt that they’re true. But, we still have trouble acting on them. In other words, our heart doesn’t know the same truth.

How many of us suffer the same thing in our financial affairs? We know we should budget or begin saving for retirement. But we can’t seem to do it. Intellectually we know what we should be doing. But we just can’t get going on it. Our heart isn’t in the program.

One way to identify when our minds and hearts aren’t in sync is to notice what financial decisions make us uncomfortable. What financial activities make our palms sweat? Our hearts beat faster? Make our stomach quesy? When we feel uneasy about a financial event that’s a clue that it’s an area that we need to examine.

So I invite you to keep a brief log. Notice those financial events that cause discomfort. Include the date, time and any circumstances that seem like they could be relevant. Don’t try to analyze it now. All we want to do now is capture the moment and make note of it and how we feel at the time.

Once you’ve assembled your journal (after a few days to a week) it’s time to study the entries.

First, were you able to recongize what tape was playing in your mind during the event that made you uneasy? For instance, I’ve often heard “You shouldn’t be spending this money. Not on some luxury.” Or “Go ahead and buy it. You’ll never find it again this cheap.” There are many messages that our minds play when we’re considering making a financial decision. Each of us has our own set of tapes. Almost like an Ipod full of messages that you frequently listen to.

Some of the messages are good. It’s true that I shouldn’t be spending money on unneeded luxuries. And I should look for bargains.

But we need to be careful about the application. For instance, if the ‘luxury’ is buying a steak to cook at home and I do it once a month is that a luxury? Sure, it’s more expensive than cooking a chicken. But, a steak with baked potato and veggie eaten at home isn’t an outrageous expense. And, perhaps that little luxury is enough to keep me from being tempted to eat at a restraurant that evening. So maybe the money tape shouldn’t apply to this situtation.

Or the bargain purchase. If the item I may buy is used and well worn, perhaps it’s not such a good purchase. Especially if it’s something that I’ll use often. Maybe it’s worn so that it is likely to break when I need it. Perhaps spending a few more dollars could buy something that’s dependable and will last much longer. In that case being the cheapest isn’t necessarily a good thing. Again, finding a bargain is good. But it isn’t always the only thing to consider.

So what does your money journal tell you? What tapes were playing when you were uncomfortable about a financial decision? Take a look at them in light of the choices you were facing. Was the tape appropriate to the situation? Or were you hearing something that could lead you to the wrong financial outcome?

Remember that these money tapes almost always have some truth in them.
But, it’s important for us to know whether the tape is true in this specific situation.

One final thought. Since these money messages have been in our heads for years and feel true to us we often accept them without any questions. We jump right to making a decision based on them. If we’re applying them to the wrong situation that can be bad. And, if we don’t stop to think before making the decision we won’t even recongize that we could be making a mistake. In fact, we’ll congratulate ourselves for making the ‘rational’ choice.

So the next time that a financial decision makes you queasy, stop for a moment. Listen to the tape in your head. Ask yourself if the message is true in this particular situation. And, only after you’ve completed these steps, then make a decision.

By doing so, you’ll move your head and your heart closer together. Close enough so that your heart will feel good about the logical decisions your head is making!
Keep on Stretchin’ those Dollars!

Gary

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Gary Foreman is the editor of The Dollar Stretcher.com website <www.TheDollarStretcher.com> and various enewsletters including Financial Independence <http://www.stretcher.com/subscribe/subscribeFI.cfm> Financial Independence is designed to walk step-by-step with you as you take control of your finances and achieve financial freedom!

During the present financial storm, every one us have used to purchase the needs with credit cards only. This is because the convenience they bring to us like not carrying cash in wallet or not required to posses money in your checking account to purchase something. With these types of facilities, the use of credit cards has increased tremendously.

But as with any other aspect this also has negative side of using in your daily life. This cashless facility of plastic money given a way to spend more than what you earn. If you had not paid balances of the purchases made in full by the end of grace period then you will be liable to charge interest on the balance remaining.

How this plastic money works? When you make any purchase, the shop owner will get paid by the credit card firm without having a need to possess amount in your checking account. It means the credit card firms are lending you on an as needed basis. One important thing about credit cards that every one gets lured is grace period. It means you will not be charged with interest from the day one of your purchase which is usually for a period of 20 to 45 days. During this period, the finance charges will not be levied on the debt within which you will require to pay the full amount you utilised. Otherwise the card companies will start charging you high rate of interest on balance remaining.

There are generally two types of grace periods. First, typical grace period. In this type of grace period, you will have an average daily balance including new purchase for balance calculations. It means here you will charge with interest on all new purchases unless you paid full balance for the previous bill.

Other type is full grace period: in this type an average daily balance is calculated excluding new purchase. It means new purchases are not included in figuring the interest calculation for current month.

In order to reduce the debt you owe to credit card companies there are few things to consider while making a purchase. First, try to make sure which king of grace period your credit cards have on each card. This can be found out by reading your billing statement and then determine whether your card has typical or full grace period. One more thing which is important to determine with credit cards along with type of grace period is the duration of the grace periods. Beware of the short grace periods and cards offering and not grace periods at all.

When choosing a credit card, one must definitely consider grace period and at the same time look for the interest rate and fee charged on the cards as they will make a lot of difference in how much a credit card costs. Avoiding this type of cost like fee and lower interest rate will help you reduce the debt incurred on credit cards.

Choosing a card with full grace period will make sense for your spending and payments habits if you are not regular at paying bills monthly.

Articles on this site have been acquired from a variety of sources.  No content on this site should be considered financial or legal advice.

Debt is main problem that every American is facing. It is not limited to low income group that cause distress among the families. The main reason to incur debt is when you are short on cash that means you spend more than what you earn. One quickest and easiest way to solve this problem is to cut your expenses.

This problem is faced by almost all the families at some point of their life as many people live on pay check to pay check basis not saving anything for emergency. This kind of attitude is what actually dragging people into debt. Setting no emergency fund leads to debt especially in bad economy that we are facing right now. With cut in income and having no emergency fund leads to debt.

If you are such person being in debt and did not setup any emergency fund then start saving right now. Yes, you can start even now. There is no perfect time for doing such things; you can start from the moment you think. In this process, cutting your expenses is the first step.

To start cutting expenses, make a list of all your expenses, its cost and purpose. Find out if it is in your budget, the one that you have developed. After listing, look at one expense at a time and yourself like can I live without this? Or at least can I lower this expense monthly in anyway? If your answer is yes, then you can start working to make changes for that.

One of the biggest commitments that most Americans having these days is mortgage. Don’t assume that you got stuck with mortgage payments. The thing is that you can refinance or modify the mortgage, then look into that to get your monthly mortgage payments according to your budget.

Next is rent that many people have this expense in budget. Talk to your landlord about working for them in exchange of rent discount like lawn maintenance or building cleaning. Trade your talents for discount in rent as it could save few bucks every month.

The other important for your living is insurance. To lower the cost of insurance, shop around frequently for cheaper insurance. These services are very competitive and in order to retain the consumers they come forward to strike a deal to get your business. Some of the discounts from these companies include first few month free service without paying a penny that help you save some money to pay off the debt incurred.

The next activity, where you spend most of your amount is for food. This includes groceries and eating out. This is best place where you can cut huge amount. The first thing you need to take action immediately is stop eating food outside. There are many people who eat food daily outside. For example: having breakfast for $5, lunch for $10 and dinner for $15 that would to $30 each day and doing this for everyday can cost you around $900. Ask yourself is it necessary for me to eat out? Preparing food at your home can save you around 50 percent of the amount which can be used to pay off the debt. Am I right?

This way of cutting expenses will help you in paying off the debt and get debt relief.

Articles on this site have been acquired from a variety of sources.  No content on this site should be considered financial or legal advice.

During this economic turmoil, credit card debt continues to cause serious pain to many Americans. Weak job market and rise of unemployment that is at its peak in past 26 years of Americans history added to the issue. Credit card debt is main cause of financial hardship for millions of Americans. During such hardship, many are seeking out and are in need of solutions to credit card debt.

Debt consolidation is a debt relief program that is most widely used among other alternatives like debt settlement, credit counselling, debt management and bankruptcy. It is a process where all your existing debt is paid off with the proceeds of debt consolidation loan. As multiple creditors existing will be paid off, you only need to pay one single payment towards the debt consolidation.

One will get better relief with debt repayments with debt consolidation because the payments you will pay towards the debt consolidation is smaller than the previous sum of payments you were to pay. This can be achieved with lower rate of interest on your new debt consolidation loan. For example: if you were to have $25,000 on five different credit cards with an average rate of interest is 25 percent. With rate of interest, you need to pay $525 as a minimum payment in order to stay current on your debt which will obviously take 20 years to pay off that debt with amount you pay rounding to $120,000.

To avoid such case, many suggest you to take debt consolidation loan of $25,000 to pay off all small lenders at once and pay the debt consolidation loan monthly at much lower rate of interest say 12 percent. It will take six years to clear the debt and pay around $34,000 by the time you clear the debt. Does all this sound great? Yes definitely.

But many people fail to understand who will lend you at that lower rate of interest for unsecured debt. In this case, there are huge chances that you will not manage to find money to pay off the smaller debt. In this situation, one can manage to achieve lower rate of interest only when you have good credit score or use of your home as collateral for debt consolidation loan. But one must be aware of the fact that having home collateral to consolidation loan means you are choosing a secured loan to repay unsecured credit card debt.

Choosing the debt consolidation loan against home means you are risking your home for sake of unsecured debt. It means if you run into trouble after taking consolidation loan against home and have difficulty paying for the new loan, then the situation could lead to foreclosure of your home. This is considered as a bad idea to pay off unsecured debt like credit card debt, medical bills etc by borrowing against property.

Therefore, taking a decision wisely related to debt consolidation by consulting a reliable debt consolidation firm will definitely help you in getting out of debt.

Articles on this site have been acquired from a variety of sources.  No content on this site should be considered financial or legal advice.

Every individual or family incur expenses as a part of their leading life. These expenses can be fixed or variable as part of budget you develop. These variable expenses can damage your financial situation, if you are not careful in handling them. For example: if the electricity or gas bill can lead to break in your budget. If you are looking for debt relief then most important thing is have control over your variable expenses otherwise that could lead to disaster in your life.

If you are looking for assistance on how to control your variable expenses, then you are at the right place as this article will outline few areas where it is possible to control variable expenses.

Before start working on variable expenses, first collect all your financial statements these may include your credit card statements, bank statements and other bills that gives you an idea of your expenses, which is also a part of developing a budget. The top secret of staying on budget is to control your variable expenses. Here are areas that include variable expenses:

Utilities: this is one area where you can cut your monthly variable expenses to save money. Gas, electricity and water are the main utilities that come under your monthly budget. To save on these, find out if the companies offer any discounts. Most do and it is one of the best to take advantage of them. If you are facing problem in paying these bills then enquire if the companies offer different payments methods to afford paying bills. If your utility bill is evenly split and averaged, then you may get rid of paying huge bills at once.

Food bills: this is one area where you can cut cost and this does not mean you should compromise with life because cutting cost in few areas will not ruin your lifestyle. Due to rise in inflation, all commodities cost has skyrocketed by sending the food bills through roof. At present, a loaf of bread now costs more that the double to what it was a year ago and it is only one example. There is no such item that has not doubled its price during this recession. When trying to cut your food bills, start shifting from brands to local goods or store brands as it may save few dollars each month. This does not means you compromise on quality as most stores maintain as just as name brands at the same time you can manage to get the item cheaper around 40 percent.

You can also save money on cutting eating out. This habit of having food outside may take away most of your amount. Start cooking at your home to save money that enables you to pay off the debt.

Mortgage: the next variable bill of your budget is mortgage. Don’t make a mistake of thinking mortgage as a fixed bill because most people have adjustable rate mortgage home loans. It means you monthly payments vary as and when interest rate goes up. To reduce the mortgage rates consider refinancing and switching from variable mortgage to fixed rate mortgage is a good idea as it saves you money in long term. The idea of having a variable rate mortgage is great if the interest rates go down as that will reduce the amount you pay but what if the rates go up. This situation can wreck your budget.

Articles on this site have been acquired from a variety of sources.  No content on this site should be considered financial or legal advice.