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American Debt Resources:
Get out of Debt Faster?
Getting out of Debt Faster using Consolidation
Our grandparents had some very good ideas about money and credit. One of those was to pay off your debts quickly. That is a little harder to follow today but if you cant pay off your debts all at once you can pay them off more quickly with debt consolidation. Not only will you feel financially freer you can also save a lot of money in interest with our consolidation program.
Interest is the oil that lubricates the consumer debt industry of today. Interest from your debt is the amount of money that others will charge you for the use of their money. In most cases its not even their own money. A department store borrows money in one account and lends it to you at a higher rate of interest than they first borrowed it for. That way a department store not only makes money on your purchase of a dining room suite, they also make money on the debt interest you pay when you use their credit card.
You can pay off credit cards and other debts faster by choosing a credit card debt service with a lower interest, or by paying your full balance at the end of the month, or by making a payment that includes the interest. Other methods that do not include using a debt service are paying off a higher rate credit card and using a lower rate one, and by making double payments a few times a year.
None of this is rocket science and yes, we already knew all of this, but the reality is that we havent been practicing any of them. As a result our balances keep increasing and our anxiety grows. One way to stop the debt cycle cold is to consider our debt consolidating services.
Using the debt consolidating services offered here at BudgetPlanners.net will take all of your current credit card and loan payments and roll them into a single consolidated payment. You then only owe one consolidated payment and it will be less than all of your other bills combined. It gives you an opportunity to get a fresh start, a new beginning to your credit and debt existence. It will feel better and the consolidated payment will be cheaper. Most of all it will allow you to get out of debt faster.
Debt Consolidation or Bankruptcy?
Bankruptcy Explained
Bankruptcy is a legal process allowing financially distressed parties to get rid of debt when there is no reasonable way that even a debt consolidation program can help with repaying that debt. Generally, there are two types of bankruptcy proceedings that are the most commonly used by individuals. Those are Chapter 7 and Chapter 13.
Chapter 7 Bankruptcy
When any individual or couples file for Chapter 7 protection, the court will appoint a trustee who then decides what portion of the debt is exempt and what portion of the debt is not exempt. Many bankruptcy exemptions can vary from one state to another but the usual exempt forms of debt are your home, auto, and household goods. In most cases there are monetary limits to the value of each type of debt as set by your state.
After it has been determined which properties a debtor will be allowed to keep, the remaining nonexempt debts can be liquidated. The proceeds of this sale are then used to pay off as much of the unsecured debts as possible. Unsecured debts are debts in which there is no collateral that the creditor can take to satisfy their debt. Exempt property canl not be sold, but if the debtor owes money on a secured debt, the creditor does have the right to repossess the property if the payments are not made.
When the funds from the sale of property have been distributed to the creditors, the remainder of the debts can be discharged by the bankruptcy court. The debtor is no longer responsible to pay the remains of their unsecured debts and is free to start to rebuild their life after the bankruptcy..
Chapter 13 Bankruptcy
Filing Chapter 13 bankruptcy is similar to a debt consolidation program. In Chapter 13, the debtor works out a consolidation plan in which they make payments to all their creditors for a period of three to five years. The threat of repossession or foreclosure is then removed. The debtor does not always have to pay the full debt as other consolidation payment agreements can be made. The Bankruptcy court will require that the debtor maintain sufficient income to cover the terms of their new consolidation payment plan as well as basic living expenses for the duration. At the end of the three to five year consolidation plan, the debtors remaining debt is then discharged.
Before making any type of decision to file for bankruptcy protection, or the decision of which bankruptcy type to file, it is always best to discuss YOUR alternatives with qualified legal help. Take YOUR first step by talking to one of our consolidation professionals. Bankruptcy is a very serious undertaking and should not be pursued lightly.
Second Mortgage?
Is a Second Mortgage a Bad Idea?
A second mortgage consolidation loan is not for everyone. Some typical uses for a second mortgage consolidation loan are home repairs, tuition, and even vehicle purchases. Second mortgage consolidation loans should not be used to extend a lifestyle that you can not afford, whether it is a vacation or endless dinners out. If you are considering taking out a second mortgage consolidation loan to increase your cash flow due to job loss, think long and hard about that choice. While it may seem like an easy way to tie yourself over, you can quickly get in over your head, and defaulting on this type of consolidation loan will result in the loss of your home.
It may make sense to take out a second mortgage consolidation loan in order to pay off bad debt. If you have extensive credit card debt, and are not making progress in paying it off on a monthly schedule, a second mortgage consolidation loan may be a good move. You will most likely be paying much less interest on the second mortgage consolidation loan than you are on the credit card debt. There are two rules to consider before deciding to do this:
Once the credit card debt is paid off, do not carry a monthly balance on them again. While it may feel great to see that zero balance, and make you feel like you can afford to do a little shopping, remember that you basically transferred the balance to the consolidation loan using a second mortgage. You still owe the money. If you start racking up charges again, you will find yourself in the exact same boat as you were before, only with consolidation loan payments as well.
Do not take out a second mortgage consolidation loan if there is any chance that you will not be able to repay the debt. Transferring your credit card debt to a consolidation loan puts you in a position where you could lose your home if you default on the loan. If you decide the risk is too great, transfer your credit card balances to the card with the lowest rate. Get some great advice by talking to one of our debt consolidation professionals first but please, do not take out the second mortgage consolidation loan if there is any doubt about your ability to repay.
Is your debt causing strain?
High debt causing you financial strain?
Is it getting harder and harder for you to meet your debt obligations each month? Do the balances on your high-interest credit card debt just keep getting higher and higher? If so, you may think that the situation is overwhelming, and sometimes it can feel like there is no way out but actually debt consolidation can help! The truth is that this debt situation has led many to file bankruptcy. In fact, bankruptcy filings are at an all-time high, which has forced legislatures to review the leniency of bankruptcy laws. Yes, the laws are changing, and for many, bankruptcy is not an option anymore. But was it ever really a good option over debt consolidation? Bankruptcy has always been and should always continue to be the last resort used to solve debt problems. Bankruptcy leaves a stain on your good name and credit that does not go away quickly.
How to solve your debt worries
If you took a poll and asked 100 Americans what they worried about the most, the majority of the answers would no doubt point to credit card debt and other money problems. The truth is that money is never far from anybody’s mind in today’s unstable economy. High unemployment, high debt and a stagnant pay scale have left too many of us up late at night wondering how to consolidate it all together. Granted, these times would make even the most financially stable a little uneasy, but most of us are faced with another hurdle to overcome: debt. Carrying around debt in a time of economic insecurity is like having a weight around your neck in the water. You’re going to get wet, and you’re going to go under; the only question is will you be able to pull yourself out of the water with all of that weight? Any amount of debt can be burdensome and even the most financially savvy need a little helping hand from time to time. What they do, and what you should do if you find yourself struggling with debt, is to alleviate the debt completely using our debt consolidation services!
You can be debt free sooner than you think
Do you faithfully pay your minimum monthly credit card debt balances when they are due only to see that the balances never really come down, and that your interest charges keep going up? If so, the problem is not your own. You are simply a victim of high-interest charges and low minimum monthly payments set out by credit card companies. Most credit card companies charge between 21 and 30 percent in debt interest annually. This debt interest is calculated and applied to your credit balance monthly and can be quite high. For example: A credit card debt balance of $2,000 would cost you $50 per month in interest if the interest rate were 29 percent. And most companies only charge as little as 1 percent of your principle balance to your monthly bill. That means that you could make your payments every month and hardly ever see the amount of debt owed decrease. So, if you’re only paying your minimum balances, you could end up wasting thousands of dollars in debt interest charges on minimal consumer purchases. You wouldn’t spend $300 on a $25 sweater at the department store, so why should you end up paying that much after you calculate your finance charges?
The key to stop paying ridiculous interest charges is to simply pay off your credit card debt. But if you’re like most, this is easier said than done. Many do not have the extra money to pay off their credit card debt balances and some have racked up quite a balance.
So, what is the solution to becoming debt free quickly? Debt consolidating. Once you consolidate debt you put an end to high-interest credit card debt charges for good and start to see more of your hard-earned dollars put to good use paying down your debt. In fact, you can be debt free quicker than you ever thought possible by consolidating the debt into one loan with a much lower interest rate.
The debt consolidation programs offer through our site work by paying off all of your high-interest debt. You then only make one lower consolidation payment and save hundreds if not thousands in debt interest charges. How much do you think you could save if you lowered your high interest rates by a dozen points or more? With our consolidation programs you could have a few extra hundred dollars in your pocket each month. What could you do with that money? I’m sure it won’t take you long to figure it out.
The Basic Debt Consolidation Steps
What You Should Do as you Consolidate Debt
As you start a consolidation program, you should work to make sure that you build the basis for a new and better financial future. This is pretty easy to do if you follow a few basic steps:
- Keep all your financial records in one place. Keeping your records organized can make it easier for you to keep track of your debt as well as your consolidation program progress and to correct any debt problems or mistakes that may crop up. Keep every scrap of financial information and every financial paper in one file and you will be able to bring your papers with you each time you meet with your debt counselor at your consolidation company.
- Budget well. Even though consolidation will ensure that your bills are more affordable each month, you will still need to budget to ensure that you do not overspend. A budget will also help ensure that you can easily afford your new, lower consolidation payments.
- Learn as much as you can. Your debt counselor will do much more than consolidate debt - he or she can be a huge financial resource for you. Use your meetings to learn as much about the consolidation program by using proper budgeting and good financial habits as you can so that you become better at managing your money.
- Start saving. Once you consolidate debt, you will enjoy a smaller monthly consolidation payment on your debt. In the first few months, it is important to put away as much of the difference as possible into a savings account. Ideally, try to save the equivalent of three paychecks in your savings account. That way, you will easily be able to afford your new lower consolidation payments even in an emergency. Plus, if an emergency does occur, you will have money and so will not have to borrow.
- Keep track of your progress regularly. Each month, note how much debt you have left. Keeping track of your progress makes you feel great and helps ensure that you are progressing with your consolidation program at a rate that is comfortable for you.
After You Consolidate Debt:
After You Consolidate Debt: A Financial Future Guide
Once you consolidate your debt, you will likely start to feel better about your financial outlook right away. Suddenly, you will be able to afford your new monthly consolidation payment, your debt interest rates will be smaller, and you will be free of collection agency calls. To keep feeling great, though, you should consider consolidation as only the first step. Once you start the consolidation program, take a few extra steps top ensure that your finances stay in peak form:Shop around before getting any new debt. If after your consolidation program starts you find you need a new loan, do try to make better debt decisions. Always compare loan rates and terms before selecting a loan. That way, your loans will be more affordable and less likely to overwhelm you. Luckily, once you start the consolidation process, your credit score will improve and you will be able to enjoy better rates.
- Learn to live below your means. Budget your money and live more frugally so that you are not living paycheck to paycheck after you start your consolidation program. This will ensure that you will not have to borrow for every debt emergency.
- Invest. Putting aside even a small amount of money each month for investing pays off very well and protects you financial future.
- Avoid new debt. After you start your consolidation program, it is healthy to be a bit shy about incurring new debt. In general, only take new debt that you really need.
- Educate yourself about financial management. Your consolidation program offers financial information as well as counseling, do take advantage of the offers to learn more about keeping your finances in order. Learning how to save money or how to budget properly can save you from future debt and can help ensure that you do not find yourself overwhelmed by credit card debt again.
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