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Financial Framework – Four Tips That Can Help You Get Out Of Debt On Any Income

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If creditors have been hounding you for payment, you may be wondering how in the world you’ll ever get out of debt. Many people fear they will never get out of their financial strife because what they owe is more than what they can afford to pay back in the foreseeable future.

The good news is that even if you’re living paycheck to paycheck, there’s light at the end of that stifling tunnel. You can get out of debt sooner rather than later by following the tips listed below.

1. Create a Budget that Works for You

Every person’s debt profile is different. This means you may have to explore multiple solutions to get out of debt before you find one that works for you.

Before you panic or throw your hands up in despair at the mountains of debt you owe, take a minute to look closely at how much you have coming in and going out. Evaluate the things that are necessary and not and find ways to cut expenses where you can. When you create a budget like this and stick with it, your eyes are opened to how much you really spend (get ready for a shock), and you often find funds you didn’t even know you had.

2. Make a Plan for Repayment

Most creditors are willing to work with you as long as you let them know about your situation. It’s when you ignore their repeated attempts to contact you that they begin to get nasty. If you’re experiencing financial hardship or can’t afford to pay as much as they’re asking each month, just contact the creditor and work out a payment plan. Keeping them in the loop makes them much more understanding and willing to work with you.

3. Get a Lower Interest Rate

There are a few different options for obtaining a lower interest rate on your lines of credit. First, you can simply call the creditor and ask for a lower interest rate. If you have a history of on-time payments, the creditor may be more inclined to grant you the more reasonable rate you seek.

Second, you could transfer high-interest balances to a lower-interest bearing credit card. Some of these cards have introductory periods with no interest for a specified amount of time. If you plan to pay the balance off during that time, you could save a ton in interest.

Having said that, if you don’t pay off the balance during that introductory period, you could end up owing more than you originally started with once the interest rate kicks in.

The last of these options to consider is a debt consolidation loan that allows you to combine all your high-interest loans into one lower-rate loan. Alternatively, you could also work with a debt management service who will advocate on your behalf to your creditors for lower monthly payments.

4. Stop Using Credit Cards

Credit card use seems to be what drives the economy these days, but if you’ve over-extended yourself (it’s easy to do), credit cards can be a nightmare to pay off. The easiest way to pay off debt is to stop adding to it with more credit card spending. Cut your cards up, put them in the freezer – whatever you have to do to keep yourself from using them.

Facing excess debt is never fun, but regardless of your income level, you can pay it down and achieve financial freedom. If you find yourself feeling hopeless about the financial hole you’ve gotten into, use the tips above to pull yourself out.

Some Important Facts about Debt Settlement to Make Up Your Mind

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Debt settlement is regarded as a viable option by most consumers, when they are not able to make the usual monthly payments for instance on credit cards or when they are only making minimum payments resulting in the accumulation and piling up of outstanding amount.

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The consumer or a debt settlement company may then negotiate with your creditors for settling the outstanding debt with a part of the overall sum you owe to your creditors. Opting for debt settlement over the other options could be a difficult choice for you to make. However, you should know a few vital things about debt settlement before you finally, make the choice. Browse through debt settlement reviews for a clear understanding.

Debt Settlement May Mean Substantial Cut in Existing Debt

Debt settlement generally allows you to slash your debt amount significantly. Although officially credit card industry will not be advertising this, but in reality, they are readily slashing your balance by almost 20 % to 75 %

Debt Settlement Could be Unattainable on Your Own

It is a challenging task to try to settle your debts independently. It is advisable to seek the expert services of an experienced debt settlement company. If you are on your own, your creditors would try their best to make you repay the exact amount you owe. So it is best to turn to a professional and reliable debt settlement company so that they can help you in arranging the settlement.

Debt Settlement Services Never Come Free of Cost

You cannot seek professional and reliable debt settlement services without paying them applicable charges. You need to pay for expert debt settlement advice and services even if you are attached to a non-profit organization. You must clarify about the fee model before you come to an agreement. Verify if the fee structure works for you. You should know that each company has its own unique fee model.

Debt Settlement Possible If You Are Really Behind on Your Outstanding Amount

If you happen to be current on your debts, creditors generally refuse to interact with you no matter how overburdened you are financially. Bankruptcy under Chapter 7 cancels most unsecured debts, and is hence very favorable, but it is much harder to qualify for and secure Chapter 7 bankruptcy. If you qualify only for Chapter 12, a debt settlement firm could help you navigate past the murky waters of bankruptcy.

Taxes Can Be Levied on Debt Settlement

If the forgiven debt balance is more than $600, you are legally needed to pay taxes on them, as you had spent the funds in the form of un-taxed money when the original purchases were made.

For-Profit Debt Settlement Firms Are Not Legal in Some States

If you are a resident of Maine, New Mexico, Arizona, New York, Mississippi, New Jersey, Hawaii, Georgia, West Virginia, Wyoming or North Dakota, state rules make the operation of for-profit debt settlement firms illegal. Hence, you must check whether the firm you are hiring is working within the bounds of the law or not.

The Process Is Never the Same

Before signing with a debt settlement company, you must go through all their fine-print and understand the process of how they intend to communicate and negotiate with creditors, and the methods they will undertake to pay off the debts, and whether all parties have agreed to the same. There is no hard and fast mode of operation, so nothing can be taken for granted.

We can safely conclude that you should do your homework diligently. Weighing your options for tackling overwhelming debt is a good idea. It is a fact, that in business everything seems to be negotiable. You can easily get significant discounts provided you know whom to approach with the request and also, if you know how to request. In case of falling back on credit card payments, you can negotiate. If you have the necessary guts and knowledge you could drastically cut down your outstanding debt amount by at least 50 % to 70%.

Author Bio: Ava Hutton is presently working with a charitable firm to provide free debt relief advice and debt settlement reviews for those in need. She has worked in the private finance sector in the past, and now enjoys reading and blogging.

Top Tips to Remember When Managing Credit Card Debts

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Today, most people are suffering with overwhelming credit card debts. The truth is that managing debts can be quite difficult. If not careful, credit cards can turn out to be quite problematic.

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Although the government has come up with innumerable changes in credit card laws, it is important to remember a number of things when dealing with credit. Knowing how to manage credit card debt effectively is very important. The following are top tips that will help you manage these kinds of debts in the most prudent way:

Regularly update your credit report

Every year, you should obtain a credit report from any of the three main credit bureaus. This way, you can stay up to date with your credit status. You can effortlessly avoid any default payments. You also need to check carefully for any fraudulent or inaccurate entries. If you find any mistakes, make sure you get them changed or removed as soon as possible.

Never co-sign with an individual with a credit risk

So what co-signing entail? Whenever you co-sign a loan with an individual with bad credit, things might get quite difficult for you. You will be fully responsible if the primary borrower is not able to repay the debt. Consequently, to be on the safe side, avoid co-signing with such an individual altogether.

Avoid giving different identification information

Always give the same identification information everywhere. Avoid changing your identification information anytime or every time you are applying for credit. Your basic information includes social security number, telephone number, and name. Always keep them the same to prevent any cases of duplicate credit files. This will go miles in helping prevent credit fraud charges. For instance, if you choose to use your middle name on one of your credit cards, make sure you do the same on the others.

Always use your own name when applying for credit

It is very important always to obtain credit in your own name. Failure to have a credit report means you won’t be able to make huge purchases like a home or car. You can always exercise rights over your partner’s account after getting married. Nevertheless, in case of a divorce, you will lose this right. Consequently, it is very important to obtain credit in your own name.

Refrain from applying too many credit cards

Sometimes, credit cards normally do not give a true sense of achievement. Most often, you will end up with debts. The rule of thumb is that credit cards should strictly be for emergencies. This is unlike what most people do. They use the cards everywhere and anywhere. To avoid these problems, always use cash to pay for your regular expenditures. If you carry only a handful of cards, you can effortlessly track down your expenditures. This will help you incur less debt even in the days to come.

If you find yourself in huge amounts of debt, you can rely on national debt relief programs for a way out.

The 10 Most Dumbest Things to Do If You’re Deep in Debt

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It is quite easy to get into debt. However, what matters the most is getting out of debt as soon as you can. However, many people are not aware of how to avoid mistakes that could lead them to more debt. If you are deep in debt, it is essential for you to take things seriously. Failure to do so can result in additional debt problems.

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Solutions for Debt Reduction

If you want to get debt-free, always remember to avoid the following dumbest things in terms of debt problems:

1. Spending a Lot

It is surprising to know about those people who are deep in credit card debt but still do not care about spending more on things they actually do not need. If you are one of them, it means that you should stop your shopping addiction so that you can get rid of the debt burden.

2. Using Your Home Loan to Get Rid Of Other Debts

Poor money managers think that there home equity loan can be best served for the purpose of paying off other debts. However, they have no idea how this can put them in bigger debt. Using home loans to pay other debts simply means that you will have to pay more in the future.

3. Borrowing Money from Relatives

People in desperate need of cash often borrow money from family members and other relatives because they think that this is the only solution left. However, this is the worst thing you can consider while paying off your debt as paying this loan on time is an obligation for you.

4. Ignoring How Debt Is Giving You Warning Signs

Some people living in debt manage to make ends meet if they are paying their minimum payments on time. However, this can still be risky because you never know when you are required to pay a lot. Secondly, many people ignore the warning signs of living in debt.

5. Relying On Credit Counselors That Want More Money

When you search for credit counselors, you will find many. However, some will demand high fees and promise to help you get debt free. They will hardly meet your expectations. Therefore, relaying entirely on credit counselors should not be done.

6. Not Making a Budget

It is a common phenomenon that most people spend money without making a budget. This should especially be done if you are in debt. Those who do not follow an organized form of managing money end up getting more debt problems. Therefore, you should always make a budget.

7. Considering Loans with High-Interest Rate to Pay Off Previous Debt

If you have debt and you want to pay it off, getting into more debt is not the right solution. This is because you will have to pay a higher interest rate for the loan youjust took so that you can pay off your previous debt.

8. Declaring Bankruptcy

Declaring bankruptcy can affect your financial stability in the Short term. This Solution should not be taken specially if you intend to start a business soon again or just as a solution to get debt-free. It is always recommended to  consider bankruptcy  as a last option. If debt settlement works for you, then prefer it over declaring bankruptcy.

9. Using Your 401k

If you have already taken a lot of debt, and you plan to use your 401k for further expenses, then it is quite an ineffective decision. You never know when you really need for 401k. So, it is always better to save this amount of money for your retirement.

10. Buying a Car on Lease

If you are already stuck with your home equity loans and you want to buy a car, leasing is the worst option you can ever think of. When you calculate your overall payments, you will realize that you have spent a lot of money on its payments as compared to its actual value.

If you think that you the above mentioned warning signs are interfering in your life, then this indicates that you should avoid them as much as you can. Rather than using these ineffective ways to manage your money, it is better to look for debt consolidation solutions.

Author’s Bio

Angelina is  a financial expert in debt management solutions. She likes to help her readers get rid of debt and for that she recommends Consolidated Credit’s debt settlement companies page which is worth reading www.consolidatedcredit.org/personal-finances/life-events/debt-settlement/.

Different Types Of Debt Relief

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Freedom from debt becomes an overriding concern for someone who is struggling to pay bills and loans of various kinds every month. When the income streams remain fixed but expenses mount forever the looming mountain of debt becomes even more insurmountable at times.

How to get Debt Relief

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There are several methods by which this debt can be managed. Debt relief programs can come in many shapes and forms and depending on personal capacity and comfort levels, one can choose the right kind of method that will best suit the financial status and repayment capability of an individual. With personal judgment and recommendations and advice from trusted friends and experts, one can choose the right method or type of debt relief program.

Some people choose the right method simply by doing a bit of simple mathematical calculations. Others may weigh the risks and pros and cons of each method and then take the decision about which one they should adopt. Yet another method of choosing the right kind of debt relief would be to do intensive research on the same – using the internet, expert advice and perhaps even legal advice – and then deciding. All methods of debt relief start with making a thorough and complete assessment of one’s financial status. All income streams and all expenses need to be listed out.

Debt consolidation as a Relief

Debt consolidation is one method of debt relief which relies on the use of one single loan to repay all other debt. This consolidation loan can give the benefit of a lower interest rate to the borrower and also entail the repayment to one single source rather than paying and juggling the payments to many different sources. In turn, this method or type of debt relief can work with credit card balance transfers, secured and unsecured loans and home equity loans. Bankruptcy may sound like a drastic step but this too is a type of debt relief program.

With bankruptcy, one can file for either Chapter 13 or Chapter 7 bankruptcy and become debt free and make it legally binding on creditors to accept the court’s ruling as well. Out of the two options, Chapter 7 has the lowest costs. However, this method is really the last recourse to debt relief management. Debt roll up is another type of debt relief program. This works best for people who have a steady and unthreatened source of income. If there is a good job that pays well and you are in no danger of losing the same then this type of debt relief can work the best.

Such a debt roll up also needs a great deal of personal discipline, for you will need to create and commit to a very organized method of repayment every month. Then there is credit counselling. With this method of debt relief, one can opt for a debt management program. The start point to this method of debt relief is to draw up a monthly budget. You can then repay a fixed percentage of credit card balances every month and do so regularly too. There are plenty of non- profit credit counselling companies that can help in this regard.

This article has been supplied  by paul for www.debtreliefnetwork.com