Posts Tagged ‘Debt’
Credit card debt is a common financial problem faced by most people. So you are not alone if you are facing a debt problem with excessive use of cards. However it has to find ways to get rid of credit card debt if you really want to enjoy a debt free life. The following five actions to save:
1. Stop spending on credit
Once you realize you’re in trouble because of the credit card debt is the immediate action that should be done, should stop buying things on credit. No tickets should add more debt. While debts continue to build thanks to the high interest rate, it is necessary to credit spending cap that will save it worse.
Two. Pay the debt with the highest interest first
The credit card debt with high interest rates and very quickly accumulate balances, worsening their debt situation. Therefore, a smart way to handle the problem is to address card balances are high risk high interest rates. Use online payment tools to help you list the debt as interest rates in descending order so you can prioritize your payments.
Three. Pay more than the minimum payment
If you can not afford to pay off credit card debt due to financial difficulties, you should try to pay more than the minimum payment. The bills you pay extra debt will help you get the freedom faster. There are several online tools for calculating payment of credit card debt that you can use to see how quickly achieve debt freedom with each additional put in your payment.
April. Create a budget plan
There is no way to control how your money without a budget plan. You must list all income and monthly expenses, monthly credit card and loan payments. Next, create a budget plan that includes the costs, loan repayments and monthly payments on the credit card. Optional expenses must eliminate as many as possible or find ways to increase their profits. Read the rest of this entry »
I can see what you Dave means here but I think that once again, you must look at your particular situation. Due to serious health issues over the past four years (cancer, a ruptured brain aneurysm and a stroke), our debt had sky-rocketed and had unbelievable interest rates and are underwater with our mortgage by over $48,000.00.
Ironically, the same month we signed up to do FPU through a small group at our church, I was placed on a paid administrative leave from teaching due to residual effects from my aneurysm and stroke.
During the two months which I did receive full pay and the five remaining months when I received 80% of my salary, we followed the plan as best as we could and managed to eliminate more than $10,000.00 in debt. There still remains, however, about $25,000.00.
I made the higher income so the loss of my income has been a serious blow. Fortunately, my husband is able to supplement things somewhat by doing free-lance work in addition to his regular job. I was also just had my long term disability application approved by my employer’s insurance company as well as through the teacher retirement association. Even so, there is still a huge slash in our income and I am now unable to work. No one is standing in line to hire people with brain injuries and someone who is unmeasurable.
The good news is over the past 10 months by taking what we learned through FPU, we managed to not be delinquent on any of our bills whatsoever and even have our $1,000.00 emergency fund in savings plus some extra which will cover my salary loss for the next four to five months. Also, my health insurance was through my husband’s employer rather than through my own and I have just been told that due to my situation, the life insurance I had through my employer may be eligible to continue free of cost to me until I reach age 70 due to the nature of my disability.
However, and this is a big however. Even with all of the economizing which we have done, we were still facing a shortfall of about $1,200.00 a month due to unsecured debt.
Yes, we could have tried to negotiate lower interest rates on our own but we’d tried to do that in the past after my last illness and it was to no avail back then, even though we’d been current on payments up until that point.
While I agree this should not be the first choice, I think there are times when this is a viable option. Due to cancer and a ruptured brain aneuryms and stroke, I am now on disability. Prior to my long-term disability being approved, we had a 60% loss of monthly income. Ouch!
It’s better now but still pretty sizable and when you add an upside down mortgage to that, it isn’t pretty.
I’m a former teacher and my union offered a benefit with a non-profit company who set up a DMP for us. We’d managed to make our very high interest payments earlier but knew we’d be unable too do so very soon.
In our situation, the DMP monthly fees are refunded to us after one year of completion in the program. With my health issues, the small administrative fee I pay has certainly been worth it. With my brain injury, the last thing I need is angry callers!
Now I must add that prior to going on the DMP, we’d managed to pay down $9,000 in debt in about nine months so we’d already made some good changes. It was just with the reduction in income and my inability to work, we would not be able to keep up the pace for more than a few months more. We still have a shortfall, even with the DMP but with careful management and God providing overtime and free lance opportunities for my husband, we’ve been able to get by. We decided to concentrate on our largest payment which is our vehicles which will be free and clear in just a few months and then we will at least have some breathing space.
In our case, I believe the DMP was a very good move. In fact, nowadays, negotiating a lower rate can be very difficult unless you do so through a DMP.
As far as the credit report goes, I have a monthly subscription and it has not had a negative impact on my score. Granted, I’d been current on all my bills at the time so that has helped. They are still reporting that I am paying as agreed and simply say I am enrolled in a payment program. The score has stayed the same since I began this four months ago.
when I knew we could keep our head above water for a couple more months due to back pay I am receiving on my disability claim, I contacted this company. It will still be a challenge but we are going to be able to manage the new payment. We are still working the debt snowball and will continue to do so even under our DMP. My counselor is familiar with Dave Ramsey and was very glad to hear we had done FPU.
If you are looking at a DMP, I think you need to do your homework on the company you choose before employing them. I also think you need to be in a situation such as mine where the possibility of a permanent loss of income due to employment is very real.
Also, I think you need to monitor things. For years I have paid a small monthly fee to one of the credit bureaus which enables me to pull up both my credit score and how they are reporting all accounts as often as I like at no additional charge. I also have made it a habit for the past couple of years to check all of my credit card accounts online every day for a number of years.
Yes, sure enough, last night I confirmed that when my DMP said the companies accepted the agreement, it was true. I didn’t simply take their word for it. That’s not smart! I verified things with my creditors myself, just to be safe.
I think it is is like anything else. Although someone else is making the payment on your behalf, you are still responsible for ensuring it is done. Don’t just take their word for it. That’s silly! Continue to verify things with your creditors as well on a monthly basis. It is easier to fix something right when it happens as opposed to three to five years down the road.
BTW, we did pay off three debts under the snowball plan and another one will be paid off next month. I am applying that to my car payment and will have my car paid off in February. Then, you guessed it.
Debt management companies are springing up everywhere. These companies help “manage” your debt by taking one monthly payment from you and distributing the money among your creditors, with whom they’ve often worked out lower payments and lower interest. This is not a loan as with debt consolidation. Sometimes people get the two confused. However, because Americans are up to their eyeballs in debt, the debt management business has become one of the fastest-growing industries today.
Companies like Consumer Credit Counseling Service can help you get better interest rates and lower payments, but at a price. When you use one of these companies and then try to get a Conventional, FHA, or VA loan, you will be treated the same as if you had filed Chapter 13 bankruptcy. Mortgage underwriting guidelines for traditional mortgages will consider your credit trashed, so don’t do it. Real debt help is found only in changing your behavior.
In short, debt management companies are out. Hard work is in. Change your financial behavior and change your life—for good. True debt management is about one thing: you controlling your money.
Real Debt Management
The good news is that there’s not some magical, mystical formula to good debt management. The solution is common sense and having a plan for your Total Money Makeover. Grandma’s simple way of handling money. Good debt management is 80% behavior and 20% head knowledge. It isn’t rocket science as some debt management companies try to make you believe.
Is it easy? No. In fact, it’s really hard most of the time. But it’s worth it. It’s amazing to see people change their lives through simple determination and having a plan that works every time. Once you have a real debt management plan in place, its only a matter of time.
We have people every week email or call us about how they have paid off $10k, $20k, sometimes even $100,000 in debt. Now, you may be thinking, “Yeah, right. They must be making six figures to do that.” NO! These are just people who are serious about getting out of debt. Many of them are making $30,000 to $50,000 when they decided to be debt free. It’s all a matter of attitude. We call it “gazelle intensity.”
Credit system is the flow of money, based on trust, from those who lend to people who borrow, and vice versa. There is an understanding that the money lent will be returned within a certain timeframe. In order to keep the system functioning, the borrower must repay the debt on time. Too many failures can cause fatal damage to the system. Understanding the credit system to help you manage your loan better.
The flow of money including the complex and multidimensional. Even in the relationship between people who borrow money and those who lend money, which seems simple, though. People who lend money have a method to assess the suitability of the borrowers are creditworthy. Over time, this method should continue to be developed so that more and more sophisticated. He also had a variety of ways to manage different levels of risk, which arise when dealing with a number of borrowers. These methods named flowers and assurance.
Banks and Credit
When disburse loans to customers, the bank should pursue its own existence that money. Able to collect money to shareholders. Or, the largest source of financing, customer deposit liability form. When significant amounts of bad loans (unpaid or delayed repayment), the bank can-can deliver on its own difficulties. Alias crisis.
Where there are buyers and sellers, there is a transaction. Where no transaction, there is a price. The interest rate is the price of a loan or credit transaction. Borrowers, aka debtor, enjoy the use of instant cash, while the lenders, creditors alias, lost benefits. Given the expense of lenders use the money immediately, in addition to refund the money, there is also compensation they should receive. Price to be paid by the debtor for having enjoyed the use of instant money belongs to creditors. Compensation was named interest. The interest rate is the price of credit. Each price in a market economy is determined by demand and supply. Also the interest rate, determined by demand and supply of credit, in addition to the magnitude of risk and duration of the loan. If necessary, the lender will ask for collateral or security. In its most basic form, the guarantee is an asset that can be taken over ownership by creditors if the debtor fails to fulfill the terms and conditions of the loan. Creditors to require security for several reasons. One of them, may be, the loan period is extended, while lenders are reluctant to be bound in a commitment for that long without security protection. Alternatively, the debtor has less than ideal credit history; guarantee must be provided so that the creditor believes he would not get stuck in bad loans. Debtors with a high personal risk (such as stunt car driver, for example) are usually required to provide collateral when applying for a loan. Wounds caused by accident could also do away with his ability to pay off debt.
Financial Planning for You
You certainly know that every human being has a need. Needs of adults will always increase over time. From the need to get married, buy homes, private vehicles, having and raising children, to enjoy a happy retirement.
However, to be able to meet all those needs, of course, funding is needed not less. For example, maybe you know if the current price of a house on the edge of the city with an area of 96 m2 alone, has reached 200-300 million dollars. Not to mention the thought of children’s school fees are increasingly suffocating bag. Currently, the money base of a private junior high school has already reached tens of millions of dollars, imagine the amount of money just for education for three years.
This situation certainly raises questions for you, how can I meet all the needs that? The answer is to do financial planning as early as possible, and have fun then.
Steps To Have Good Then!
Financial planning is a process undertaken with the financial management discipline, to achieve your desired goals. For that, there are 5 steps you should do, Check the condition of your financial health
Not just your body’s health is important, but the health of your financial condition could not be ignored. Actually, the latter should be your first priority before maintaining a healthy body, because maintaining a healthy body also requires funding.
The first step is quite easy. Record with either all of your expenses in a month. You’ll be amazed when doing this, because you will see where your money during this float.
In addition, count all the wealth and debts you have. Pay off all your debts – if you need to sell your property – before you plan to have something new. If you no longer have debt, then the new can be said you have a healthy financial condition wal afiat.
Do not be afraid if you do not have a store after you pay all debts, because even if you do not have a store yet, you will do something much better for yourself.
Bankruptcy is all about the worries of money and costs. It is not surprising to learn that most people do not have a complete knowledge about the bankruptcy, then they went for it. Of all bankruptcy cases filed, the most common are Chapter 11 and Chapter 13. Both Chapter 11 and Chapter 13 are for the facility to people. However, before filing them, you must have adequate information about bankruptcy and its consequences.
What is bankruptcy?
Bankruptcy is basically your solution through which you can manage to relieve debt. It is supervised by the court and you get to have a permit to arrange for a proper distribution of your assets to your creditors. Mainly there are two types of bankruptcy, ‘Line’ or ‘settlement. “But bankruptcy is a solution for you if you have serious financial problems, may not be beneficial to all.
Who may be eligible for bankruptcy?
Anyone can file for bankruptcy. However, if the court considers that the terms of the bankruptcy laws are not maintained, approval may be denied. This may be the case when their needs are seen as more than your income. You need to consider their family, their needs and assets before declaring bankruptcy. However, filing for bankruptcy should be the last option in the list, you should consider all possible ways to avoid it.
What are the pros and cons of the presentation of a bankruptcy case?
• The frequency of bankruptcy cases get resolved is high which means that most cases are resolved by giving it a new beginning.
• A federal or state law will allow to take some of the property as property exempt.
• In most cases, creditors can not claim their property or property in the future.
• Chapters are in order and give you a complete detail about the amount you have to pay creditors.
• Presentation of a bankruptcy case is a bad mark on their records. That means you can not file for loans at least 10 years. Presentation of a bankruptcy case can be seen by many commercial enterprises.
• those who co-signed the loan may also have to pay the debt.
• For many, bankruptcy seems to still be a sign of irresponsibility. The processes are a source of embarrassment to many as the applicant has to go through questions about your financial situation.
• The fiscal results are something that can count as an aftermath of a bankruptcy case.
When filing bankruptcy?
First you must find yourself a reliable non-profit counseling service. It will let you know if there is a need to file for bankruptcy or not. The next step is to try to bankruptcy means test. Through this test, the judge will decide if the process is being performed or not. Now take a look at your income. If your debt is more than 25% of your income, you may file for bankruptcy, otherwise not. Consult a good lawyer and get advice. Catch all the other options in mind as much as possible. Remember that bankruptcy is not good for your record to avoid it until the last moment.
Determine your monthly income / disposable surplus. You should not spend all the money you earn per month. Your disposable income is the money left after paying all their monthly obligations. Make a list of everything you spend money each month, interest, utilities, phone, Auto Insurance, food, everything! Add the numbers and subtract it from your monthly income. The answer is your disposable income. If the answer is no, then you’re spending more than you earn and this is a problem. At this point you may want to review the list and cut where you can. If the answer is yes, that’s good, now you have some money to save or use to pay the on / off your debt.
Reduce the debt service payment up to 10% of your gross income. This is a very important step to pay close attention.This is why many first time home buyers were denied a loan, not just credit. The payment of debt service is money that you use to pay your debts each month. A debt and spending are not necessarily the same thing. Debts usually appear on your credit report, not expenditure. An example of a payment of debt service is the car payment. It appears on your credit report and you are actually paying back a debt (borrowed money). Your electricity or water bill payment is a payment of debt. And is spending, but not a debt (because you do not borrow money from utility company).
Join all the money you pay each month to the charges contained in your credit report. Divide that total by your gross income (ie profit before taxes are deducted, etc.) should not reach more than 10%. This is called the debt service, and is more than 10% you have a problem. Do not apply for a home loan until you fix this, or at least talk to a competent and attentive Loan Officer.
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