Money From Home - Debt Fixes - Press Article

Money From Home - Debt Fixes

Everywhere you go it seems that people are talking about the economy. How interest rates, home prices, gasoline, healthcare, and food prices are going up. If our job incomes were also going up at the same rate, at least we would be staying level. However, for most people that is not the case. A car accident can even put a family’s budget a risk. Because this and so many other factors, consummer debt has become a major problem for a growing number of people. Let’s take a look at some of the possible fixes and some a scam that many people are getting caught in.

Debt Elimination Scams. Consumers seeking debt assistance are faced with a bewildering assortment of debt companies, services, programs, books, eBooks, and websites. So, how do you tell the scams from the legitimate options? There is a new debt elimination scam being seen on the internet. This scam is based on the bogus “no money lent” argument, where the claim is made that credit card banks cannot loan money legally. Through strange leaps of logic, the scammers claim that credit card banks are actually operating illegally, and so you never really borrowed any money when you used your credit cards and therefore, you don’t really need to pay anything back. You just have to follow their system and the debts will go away. I couldn’t understand how anyone would really believe this. These con artists are really very convincing and start quoting federal code and such. For 15% of the total debt, they will make it go away. About the only thing going away here is more of your hard earned money and your credit. Then you have all the creditors suing you for payment. Basically, the scammers are telling you to walk away from your debts, don’t pay, and duck and cover. That’s it. It’s a lot of hot air and bogus nonsense. It only works because debt-weary consumers are desperate for solutions. If you have become the victim of a debt elimination scam, I urge you to take action. Demand a refund in writing. Complain to the Better Business Bureau where the company is located (assuming you can even find them), complain to your state Attorney General and the Federal Trade Commission. And then get on the phone with your creditors and explain that you were misled and that you would like to work things out in good faith. It may be necessary for you to formally retract any documentation that the scammers sent to your creditors.

Debt Reductions Options. Let’s look at debt consolidation and credit counseling. Debt consolidation allows you to lower interest rates and payments on your own. Credit counseling can help you find other ways to reduce your debt and develop goals for your financial future. Debt consolidation is a quick way to reduce your interest charges and monthly payments. With secure loans, like a cash-out refinance, your rates can drop by half or more. You can also select terms that give you a reasonable monthly payment. Remember though that the longer the loan, the higher the total interest charges will be. Selecting a fixed rate loan also gives you the security of knowing what your payments will always be. Do your comparison shopping for a consolidation loan. There are differences in rates and loan fees which can mean savings of thousands of dollars. Online lenders and broker sites can help you get a quote in just a few minutes. Credit counseling uses several techniques and having an unbiased opinion helps. As experts in debt reduction, credit counselors can help you develop strategies for eliminating your debt. This might mean developing a budget with a debt consolidation loan. Or they may suggest using the services of a debt manager.

Credit counselors can point out areas where you can save money, such as switching account holders. They also help you plan for the future by developing a savings strategy. Credit counselors aren’t simply focused on reducing your debt; they look at your entire financial picture. Credit counseling is best for those who want to do a total makeover of their finances. It’s ideal for those who want to make long term changes, but need help in deciding what are their best financial choices. For those who strictly want to get out of debt, consolidating your loans is a good choice. In a short amount of time, you can save yourself money with better rates.

Debt Settlement. (also called debt negotiation) is another option. Debt settlement is a more aggressive strategy for eliminating your debt. And it is not right for everyone. The process of debt settlement is designed for consumers who are behind on their payments, and wish to avoid bankruptcy. The consumer would make an offer to pay off the balance at a reduced amount, often 40-60% of the original balance. Why would a creditor accept such an offer? They get a lump sum of money rather than monthly payments.

How do you know if debt settlement is the right strategy for you? For anyone considering bankruptcy, debt settlement is a good alternative. While debt settlement does get recorded on your credit report, it is usually considered less damaging to your credit than bankruptcy. For anyone behind on their payments, debt settlement is also a good option to consider. Since late payments are already considered a negative mark on your credit, settling your debts allows you to finally pay off the debt. For anyone who just has not made any progress paying off their debts, but still pays on time, debt settlement can be considered. While the process of settling debts does work against your credit score, so does a high amount of debt. So, keep in mind that the main benefit of debt settlement is to pay off your debt as quickly as possible, saving you money in both interest and in principal, and allowing for greater financial flexibility. After all, having good credit is worthless, if you don’t have any money to spend!

Bankruptcy. Many people who are overwhelmed with debt think that filing bankruptcy is the easiest way out. If at all possible, consider this the last alternative due to your credit rating which can remain on the credit report up to 10 years. Creditors will consider personal bankruptcy when evaluating you for a personal loan. You may receive credit but only if a predetermined amount of time has passed, or if the filing is no longer on your credit report. Attaining a loan after you file for bankruptcy is more difficult and could cost you higher interest rates. Each year more than 900,000 Americans file for protection under Federal Bankruptcy Laws. Unfortunately, some are credit abusers or just not financially responsible, but on the average, the person or persons filing for bankruptcy relief are just average working individuals or families who are trying to pay all of their bills. Somehow, they find themselves in financial trouble. Be it the sudden loss of a job or income, mounting medical bills, a divorce or even a natural disaster can quickly wipe out a life’s savings. For many, bankruptcy provides a second financial chance. In some cases, it can shed tremendous stress and provide the opportunity to rebuild from scratch. Generally, filing a bankruptcy is a last resort. While it should not be entered into lightly, it may prove itself to be a positive solution for you.

We have looked at several options being used today to either eliminate or decrease your debt. These are very difficult and confusing decisions for most people. If the best option for you is not readily obvious, I suggest you consult a financial expert. Remember that saying, “If you continue to do what you have always done, you will continue to get what you have always got.”

Here’s to a brighter financial future,

Karen Kelley is the owner and developer of several web sites. During her career with a major corporation, she struggled with balancing a job and raising a family. Because of a strong interest to find something that could produce an income from home, she embarked on this project. This report is part of a series; to obtain the complete FREE report http://www.momsresourcecenter.com/capture-ebook.html.

Category: Business