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More and more individuals throughout the country are confronted with big debt loads daily. A lot of these borrowers think that filing for bankruptcy is the sole manageable choice to get themselves free from debt. Luckily, a solid debt reduction technique exists. Debt negotiation is a way of reducing the borrower’s debt and avoiding totally demolishing your FICO.

Settling your debt for a reduced pay back total is quickly becoming a more popular way to deal with your credit and debt troubles. Typically, a debt advocate may help in the negotiation of your debt settlement plan so you can eventually pay back your debts. When the debtor is overwhelmed with debt the concept of debt negotiation becomes a real answer. Debt negotiation is equally utilizable for individuals who are now behind on repayment as it is for individuals who can barely afford the minimums.

All the same, no resolution to debt is totally absent of possible downsides. Debt settlement, like other options, might probably have a destructive consequence on an individual’s credit rating. Yet, Bankruptcy can beat up a consumer’s credit even more than debt arbitration. There is likewise the possibility that the bank may take judicial action to collect the total sum of money owed. The last potential drawback is that the lender may continue calling until the debt is settled.

It is reasonably easy to settle debt in California due in part to the strong debtor policies in that state. California renders its residents with several rights and protections in regard to overdue amounts of money on non-secured charges such as repossessions and medical bills. For instance, if you want to put together a debt management plan in Corte Madera then creditors will be happier to work it out with you than in a state that favors the creditor’s right to collect.

Every state has laws requiring collectors to stop calling a borrower if the consumer sends out a Cease and Desist letter which tells the collection company that a third party is going to be handling all creditor communications. California keeps safe its consumers more by inhibiting the nuisance of collection agencies as well as the first creditor. The laws which moderate and restrain what a debt collecting company is allowed to do will also cut back the nuisance abilities of first creditor.

Additionally, California has passed laws that frequently completely protects a credit holder’s home and earnings. Earnings garnishment laws protect workers’ pay. This legal structure gives a credit issuer more of an incentive to work out a plan. Several of these types of cases, despite all of these borrower rights laws, will finish up with court. The reason for this is because credit issuers have the right to bring a lawsuit against a debt holder as a manner of collecting a overdue debt.

There are two alternatives for filing bankruptcy as a single person or married couple, chapter 7 and chapter 13 bankruptcy. Chapter 7 is often referred to as liquidation as all of your property that is not exempt is sold in order to pay off your debts that you claim in the bankruptcy. Exempt property is that property that the government allows you to keep in order to continue living a normal life, like a car, clothing, furniture, etc. Each state has their own bankruptcy exemptions, as well as the Federal bankruptcy exemptions that can be used in some states.In order to qualify to file a chapter 7 bankruptcy petition, you must be an individual, you must take a credit counseling course from an licensed agency inside the 180 days before filing for chapter 7 bankruptcy relief, and pass the means test which is filed with your petition.In a chapter 7 petition, you will have to file schedules that list your creditors, assets, earnings and living expenses. The bankruptcy court may also request to see tax returns, pay stubs and credit counseling certificate. Bankruptcy filers who are married must provide the spouses data even if they are not going to be filing bankruptcy together so the court can determine the households ability to pay the debts.When finishing your petition, you will have the option to continue paying and holding onto your property if you are able to, such as your dwelling or auto, by making a reaffirmation agreement with the creditor. By reaffirming the debt you are recognizing that you intend to make payments. If the trustee approves your reaffirmation agreement, the creditor may be able to repossess the property if you do not pay.When you file your chapter 7 bankruptcy document you will have to pay a filing fee of $299. This cost can be paid in installments, up to 4 no later than 120 days after you file. Once you file, the bankruptcy stay is in effect, and your creditors cannot try to collect on the debts or continue lawsuits, or wage garnishments. Each of your debts will be given notice that you have filed bankruptcy and yielded a chance to respond. A meeting of the creditors, a 341 meeting, will be called within 20-40 days of filing the petition. During this group meeting, the trustee and your creditors may ask questions about your petition.The trustee then rules on the presumption of abuse of your case. If the trustee finds a presumption of abuse you can be forced to file ch 13 instead.The trustee then liquidates your assets if any are not exempt and gives the profits to creditors. After liquidation a discharge is granted to you, which wipes out the rest of your debts.

With the increase of credit card issue and usage, it was only a matter of time before the number of people experiencing credit card debt would also increase. The problem is it is just too easy to spend money but now people are looking for ways to try and pay off the thousands they owe to the finance companies. Generally speaking the only way out of this predicament is by using a credit card debt relief solution.

At this point it is important to start as you mean to go on and stop all spending on the card otherwise it will make arranging a debt relief plan much harder to implement. Once the debtor has decided to do something about the debts incurred they can start looking for a suitable credit card debt relief option. The three debt consolidation plans detailed below are going to be your best options although they are by no means the only one available.

The next step is to find a credit card that is offering special low interest rates on balance transfers, this way the debt consolidation can be made into one loan which can be repaid in regular installments. Another method is to arrange a consolidation loan to relieve the debt, then paying just one amount which is easier and within a budget.

Once this amount has been agreed, the person with the debts must ensure the payments are made in full each month until the balance is clear. Remember, consolidation by card or loan will only work if the debtor has not already damaged their credit history.

When the situation or poor credit rating occurs, credit card debt relief is unlikely; then it will probably be necessary to contact a company that specializes in negotiating settlements. The company can negotiate with the creditors to accept some money, generally about 50 percent of the outstanding balance and then write off the rest.

However, if this option fails then the only option left is to file for bankruptcy which will clear all the debts but this should never be viewed upon as the easiest or first option as there are negative aspects to consider. Once this option has been decided upon the debtor must be in no doubt that they will find it difficult to apply for any type of credit until the end of the bankruptcy as they will need to rebuild their credit rating. Once your debts have been cleared, hopefully you will learn to be more responsible and not require debt relief from your credit cards ever again.

Often, a structured settlement is one that offers the payment of funds owed in an agreed upon way. It works to allow individuals to receive payments of the money that is owed to them in such cases as a lottery winning or a personal injury lawsuit.

A structured settlement also allows for the company making payments to pay in payments rather than in a large, lump sum. To decide if a structured settlement is the right choice for you, consider these factors.

• In many cases, a structured settlement is one that will allow you to receive monthly payments as opposed to one large lump sum. It is often the case that a lump sum will be worth less than the payments could be over time. It is often the most beneficial in dollar amounts.

• Secondly, it has more tax advantages to it than that of a lump sum payment. It is often structured to include a lesser amount of money going to taxes.

• It is a good choice in circumstances where the individual is on disability, is incapable of work or has become incompetent. In these cases, it allows for monthly payments to allow care throughout the life time.

• In cases where a wrongful death has happened, it is necessary for the spouse and/or children to receive monthly payments to allow for compensation for wages.

• It is also a benefit in such cases where the money will be needed to make payments. For example, in the payments needed for mortgages and car loans.

A structured settlement allows for individuals to receive payments instead of receiving a lump sum. While a lump sum may allow for more right away, a structured settlement allows for continuous help throughout the course of the repayment terms.

Determine which is the right situation for you is something that you and your attorney will need to discuss further. Ask him what a structured settlement can do for you.

Ken Austin is the webmaster at Structured Settlement Tips
and Financial Resource Guide.

If there is one thing that Turning Point knows, it is credit card debt. They are a debt settlement company that helps to negotiate with credit card companies to reduce debt by up to 50 percent for its customers, through the use of fixed free settlements. They do not add interest to the debt amounts, and they will not try and promise you something they cannot deliver. They are fair and through, and if you receive had past due payments on your credit card, they can try and assist you.
Your credit mark is really key. It defines what kind of credit you get, if you can get credit, and how much of credit and an interest rate you get. Approximately thirty-five percent of your Total credit mark is made up of your payment history. Therefore, if you have a history of making late payments on your credit card, then you are going to have to deal with having a lower credit score. One past payment, which is defined as 30 days or more past due, can lower your credit mark by dozens of points. Those scores of lowered points can mean you will receive a higher interest rate and owe more money.

If you have payments that are past due more than ninety days, your credit will be impacted even more. Your credit score can drop as much as one hundred points if you receive more than 5 late payments. This can actually impact your score more than bankruptcy. The great news is that resolving the past payments is typically easier and less of a concern than a bankruptcy.
You run the risk of your account going into collections if you are extremely past due and have some ninety day or more late payments. Collections appear on your credit report and lower your FICO score quite a bit.
As long as you have not gone into collections, you should have the option to make minimum payments which may save you from being late, but the minimum due doesnt help to pay off your rotating balance by much and can make you to drop even farther behind on your accounts.

Having been in the debt collection business for some years now it never ceases to amaze me how people deal with their debt problems. There seems to be 3 main methods of dealing with debt.

1. Ostrich Approach – Bury your head in the sand and the problems will disappear.

2. Worry Wart Approach – Believe everything the debt collection agencies tell you.

3. Sensible Approach – Deal with your problems.

Generally the people that choose option 1 or 2 will eventually have to opt for option 3 but their costs will be far greater in the long run.

Here I will point out the do’s and don’ts for dealing with your debt problems.

Debt collectors in the UK that work for major financial institutions earn a wage. They can earn a bonus (usually yearly) by exceeding certain targets set for them. Generally these targets are based on the amount they collect and also the number of promises (a promise to pay by a debtor) that have been made versus the number kept. To put it simply, if you promise to pay a Bank £10 per week for 5 weeks and you make every payment on time, that counts as a successfully kept promise against your record and also against the collector who arranged it for you. If you fail to pay on time or pay less than you agreed, the arrangement will fail and the collector will be penalised and your record will be marked.

Rule No. 1 – Don’t make a promise you can’t keep. Many people feel intimidated by debt collectors and therefore feel under pressure to promise to pay more than they can reasonably afford. When this arrangement fails (and it will fail), the Bank will be less likely to help you in future.

Rule No. 2 – Know exactly how much you can afford to pay and then halve it. It is absolutely essential that you work out your budget prior to making an offer. Most people forget to include things like haircuts, clothes purchase and home maintenance in their budgets. These are things that you will have to pay out for during your arrangement with the Bank and therefore will affect how much you can afford to pay. When you have worked out exactly how much you can pay and have halved it, ring the Bank. It is their job to get you to increase your offer. So if you know you can comfortably afford £10 per week, you offer £5 and after some strong negotiation the Bank get you to increase your offer to £7.50, it is a win-win situation. The collector feels they have done a good job by getting you to increase your offer and you are better off. This enables you to pay extra on top of your offer if you want and this will improve your record with the Bank.

Rule No. 3 – If your basic expenditure exceeds your income there is no way you can pay your creditors a fair amount. Get help. Major Banks and Building Societies contribute financially towards certain debt counselling companies. The major one in the UK is CCCS. There are many agencies that will help you, however the majority will take a percentage of the amount you can afford and keep it themselves to cover their costs. With CCCS every penny goes to your creditors, meaning you repay your debt more quickly. Quite often they are also able to suspend charges meaning you owe less. http://www.cccs.co.uk/

Rule No. 4 – Make them an offer. If by chance you come into some money but it is not quite enough to repay all your creditors, offer them a percentage of the total debt as a ‘full and final’ offer. This is a very common way of reducing the amount you owe. Say you owe a Bank £1000. If you can’t pay, they will eventually sell this debt onto a debt collection agency for say 60pence in the pound. Meaning they have already lost £400. Add on to this figure the Bank’s costs for chasing the debt originally and it will probably amount to around £600 lost. Therefore the Bank will be open to offers. Generally the lowest they will go to is 50% of the total debt outstanding. Offers must be made in writing.

Rule No. 5 – Get things in perspective. If you are a worrier then CCCS is the way to go. You can even send them your letters from the creditors chasing you and they will deal with them. Remember that Banks earn billions of pounds of profit each year; the small amount you owe them is a drop in the ocean for them. Banks also allow for a certain amount of loss each year.

Rule No.6 – Cancel as many direct debits and standing orders as you can. If your Bank account is overdrawn the Bank won’t pay these items anyway and will charge you between £20 and £50. The charges are automated. It doesn’t matter if you told the cashier at your local branch that you were having trouble, the charges still apply.

There are some common misconceptions about debt that I will correct here.

1. If I am paying something they can’t take me to court. Absolutely false.

2. I am paying the amount I promised so my credit rating will not be affected. False – your credit report will show that you are in an arrangement with a creditor.

3. I have gone through CCCS so my credit rating will not be affected. False again – your credit report will show that you have sought help for credit problems and is likely to remain on your records for 6 years.

The best thing you can do when you first realise you have debt problems is to speak to the companies involved and ask what their financial difficulty policy is. Some may give you 3 months of reduced payments to assist with short term difficulties and some may offer you longer. They are far more open to helping people if you contact them first. Keep in touch with the companies involved and pay a little extra every time you can, as this will encourage them to help you in future.

Lisa Mills was a debt collector for many years before launching her own business. http://www.newbabygiftboxes.co.uk is a site offering a baby gift box service.

You eliminate credit card debt by paying off your credit card balances.

You can make the minimum payments (about 4% of your debt or $10, whichever is larger). But, if you only make the minimum payments, and don’t charge anything new, it may take 14 years or more to eliminate your credit card debt. The length of time largely depends on the interest rate you are being charged.

The ideal solution is stop charging things to your cards and pay more than your minimum payment each month to eliminate your credit card debt faster. People typically decide how much extra they can pay beyond the minimum required payments. Then, they pay that amount every month until they have completely eliminated their credit card debt.

So, let’s suppose you have four credit cards with the following characteristics:

Card 1: $3,500 balance at a 21% interest rate

Card 2: $2,500 balance at a 19.8% interest rate

Card 3: $4,000 balance at 17.9% interest rate

Card 4: $2,000 balance at 12.9% interest rate

That totals $12,000 of debt. The current minimum payments for these cards (at 4% of the total debt) total $480.

Suppose you can add another $100 to that payment to make a total payment of $580. You will pay $580 each month until you have eliminated your credit card debt.

So, how do you allocate that extra $100 to the four credit cards?

The 3 Methods

There are basically three methods that are suggested:

1) Add all the extra money to the card with the smallest balance.

2) Add all the extra money to the card with the highest interest rate.

3) Add the extra money proportionally to the cards based on their current balance.

Using method 1, you would add the $100 to the payment of Card 4 with the lowest balance. The minimum payment (4% of $2,000) is $80. So, each month you pay $180 on Card 4. This method eliminates Card 4’s debt after 11 months. When Card 4 is paid off, you add $180 to Card 2’s payment. You then add the amount you were paying for Card 2 to Card 1. Then you pay the entire $580 on Card 3 until it is paid off.

Using method 2, you would add the $100 to the payment of Card 1 with the highest interest rate. The minimum payment (4% of $3,500) is $140. You would pay $240 each month until Card 1 is paid off. When Card 1 is paid off, after 17 months, you add $240 Card 2’s payment. You continue to add the amount for a card you paid off to the next card with the highest interest rate.

Method 3 is the most complex. Here you divide up the extra $100 between the four credit cards in proportion to the current balance. In general, the way you determine the amount to add to a payment uses the formula:

(Balance for Card)/(Total Debt)x(Added Amount)

For the first payment, the amount you add to the minimum payment for each card is computed as follows:

Card 1: (3500)/(12000) x $100 = $29.17

Card 2: (2500)/(12000) x $100 = $20.83

Card 3: (4000)/(12000) x $100 = $33.33

Card 4: (2000)/(12000) x $100 = $16.67

Since this is harder than the other methods, you may want to determine the amounts you add to each card only every six months or so.

How Do The Methods Compare?

All three methods will eliminate your credit card debt. So, is one method clearly superior to the other methods?

Here are the results:

Method 1: Add to the smallest debt. This methods will eliminate your credit card debt in 26 months. You will pay a total of $14,618 with $2,618 in interest charges.

Method 2: Add to the highest interest rate. This method will eliminate your credit card debt in 25 months. You will pay a total of $14,471 with $2,471 in interest charges.

Method 3: Allocate proportionally to balance. This method will eliminate you credit card debt in 26 months. You will pay a total of $14,551 with $2,551 in interest charges.

Using method 2 (highest interest) will save you $147 and 1 month over method 1 (lowest balance). So, compared with the $12,000 initial debt, the differences between the methods is relatively minor.

So which method should you use?

If you are interested in a psychological boost by quickly paying off a debt, then pay off the smallest debt first. This will get it out of the way quickly.

If you are interested in paying the absolute least amount of money with the quickest debt elimination, use your excess money to pay off the debt with the highest interest rate first.

If you want to pay off your debts at nearly the same time and don’t mind the calculations, allocate your excess payment between all your debts.

The important fact to note is that by adding $100 to your payments you paid off your debt in just over 2 years.

Bob Sherman is the webmaster of http://www.bobshermancredit.com which expains the essential knowlege about credit and debt. The information in this article is taken from him ebook, “How to Free Yourself From Credit Card Debt”, available at no charge on his website.

Credit card debt have you drowning financially? You’re not alone. The average American household carries $9,205 in credit card debt, according to CardWeb, an online industry tracker. Not managed properly, this debt can come to eat up all of your disposable income leaving little or nothing for bare necessities. Some people in this situation respond by charging more but that will only get you further in trouble.

Fail to plan and you plan to fail

There is this cliché that states that if you fail to plan you plan to fail. The first thing you need to do is evaluate where you want to be. Do you want freedom from your credit card burden? Is so, you need to develop a different action plan to the one you are currently following. Makes sense doesn’t it?

Start by listing all of the debt you currently owe along with a list of what your monthly obligations are for each debt. At the top of the page, list the amount of income available to pay these debts after essentials like food, hydro, etc… are taken out. When listing essentials, it’s important to include a certain amount for clothes, medical and entertainment because no matter how good your intentions, you will spend some money in these areas. If you budget ahead for them, you are less likely to just waste it.

Start paying one credit card first

Don’t try to pay off all of your credit cards at once. Doing this will take too long and end up discouraging you. You’re better off concentrating on getting one card paid off, then putting the money you’ve freed up from that one card and applying it to the next one and so forth.

Which credit card charges you the highest rate of interest? Start with that one. Pay the minimum due on all of your credit cards expect for the one you have chosen to focus on first. On that card, put as much money as your budget allows onto the card after all of your expenses and debts have been factored in. Keep doing this month after month until the credit card balance goes to zero.

Loose all credit cards except one

Plan to keep one major credit card for unexpected expenses, car rentals and emergencies. Get rid of all your other cards as you pay them off. Most people can’t resist the temptation to spend money on a clean card. If this describes you, you’re better off without many credit cards than you are to get right back into deep credit card debt.

Follow this plan, and depending on how much you owe, in a year or so, you should have pretty much achieved credit card debt freedom!

Joe Duchesne is the webmaster of Bootdebt.com a website dedicated to helping people with credit card debt, debt consolidation, getting out of debt and becoming financially literate. Reprint freely as long as you keep this resource box and include a live keyword rich link back to my website.

A few years ago I figured my family would be better off if I was killed in a car accident as my life insurance would pay off all our bills and my wife would be able to pay off the house.

Looking back on this I realize just how desperate things seemed. I was up to my eyeballs in debt and could not make all of my monthly commitments, then, the phone started to ring and the bills turned different colors – it was the “Collection Department”. Well, I thought that was bad; after a few months of them calling, it got worse. My creditors had sold my debt to a Collection Company who had me on speed dial.

I was a guy in sales who had good and bad months, only at the time, I was in a bit of a dry spell and the collection calls did not make my life any easier. They would call me at home, at work and on my mobile phone.

I began to think that my only option was to claim bankruptcy, or as I said before, get killed in a car accident or something, so the insurance paid off.

THERE IS A STRATEGY TO GET OUT OF DEBT!

A friend of my suggested something simple and also helped me understand a bit of how the collection companies work:

Collection Companies are in the business to make money, they either make money off of interest, are paid a percentage of the collection, or a combination of the two. They are hired by the company that you owe money to, because the Collection Companies methods are very harsh and typically get results. The Collection Companies will threaten your credit bureau (big deal) they will mentally try to beat you down, they will try anything that they can to get money out of you. Here is the thing, many people have just decided that they do not want to pay and are playing just as many games with the Collection Companies as they are playing with those that owe money. If this is you and you are just playing games, leave this page now.

If you go bankrupt, you lose AND they lose; the collection company makes no money and the company that you owe money to has to write off your debt as a business loss.

Here is the solution – Develop a Win-Win:

Figure out what you can afford to pay per month, for three months in a row, without having to settle with eating the Kraft Dinner box before your next pay check…$10, $25, $50, $100, then figure out what the number could be the following three months. Try to make the number twice as much for the second period (example: Three months worth of post-dated cheques for $25, followed by three months of post-dated cheques for $50)

Then, YOU call the Collection Company (not when they call you to beat on you for money) and TELL THEM what you are going to pay them; they won’t like it, but THEY HAVE TO ACCEPT IT! If you are showing a “reasonable effort” to pay back your debt, they have to leave you alone and accept the money. Six months is more than enough time to get a better job, start a business, or whatever and will likely be enough time to get generally back on your feet.

Now, if you are not able to completely stand the monthly bills after six months, then, call them up an tell them what you are going to do next. By the way…this works with the banks and car companies too, but probably three months at the max.

The point is, as long as you demonstrate to them that you will be regular in your payments and that the payment amount will go up over time, they will leave you alone. If they decide to strike your credit, this is not nearly the hit you will get on your credit report if you claim bankruptcy. In fact, showing future creditors that you worked your way out of debt instead of going bankrupt will earn you bonus points.

You can do it, I know you can!

To Your Success!

Greg Nicholls

©Greg Nicholls – Nicholls Consulting – All rights reserved

Greg Nicholls, I am a 36 year old father of three and husband for 15 years; I have been either self employed or in commission sales since high school. Today, I am the President and CEO of my own corporation and teache people, that want to learn, how to effectively start and run their own business. I favors the direct selling business model where one product sold makes one person one profit. If you want to start your own business and learn to work from home, visit my website at http://www.gregnicholls.com or call me toll free directly at my home office 1-800-388-4563.

Credit card debt is easy to ignore. You make the monthly minimum payment on your credit card debt and you just keep charging. Have you thought about the fact that you are spending your retirement money now? Do you know how much money you need to retire comfortably? To retire in comfort requires planning now, not later. It is difficult to estimate the future spending power of your dollars but any money saved is better than no money.

Credit card debt and retirement just don’t equate. You can plan and estimate the price of vacations you take, the costs related to the vehicle that you drive or your monthly expenditure on food. The future value of your dollar has you stumped. Financial Planners tend to give high estimate of what you will need to retire, not taking into account that most people reduce their spending dramatically in retirement. The lack of exact numbers does not remove the need to plan and save to retire.

If you have a heavy credit card debt load, what’s going to happen when interest rates start to rise? That prospect may no longer be imminent but the day will arrive when the record low interest rates are but a memory….make the right retirement decisions now and retire in comfort later.

If you have a bad credit personal loan record, it’s not over. You can repair your credit rating and clean up your personal loans through systematic repayment. Even by just paying the minimum, you will eventually pay off the balance. The earlier you start dealing with your bad credit personal loan record, the earlier you can start building your personal net worth and be working to meet your financial goals through effective money management.

A bad credit personal loan record need not stop you from fulfilling your financial dreams and attaining your goals. Anything you want to achieve badly enough is possible, with a money management system. Don’t plan on living by a budget. Budgets are like diets, as soon as you start one or plan to start one, you tend to binge. Participate in a last bit of gluttony before the long starvation diet, or budget.

It’s possible to repair your bad credit personal loan record through improved money management techniques. Consider debt consolidation, low interest credit cards, and a home equity loan. There are many options available to you but you do have to be prepared to take a proactive money management stance.

Please feel free to reprint this article provided the following author’s credit and live URL link remains intact.

About the Author;
Ryan Atkinson is the founder of http://www.money-management-info.com/debt-management.html. Helping others understand the fundamentals of managing money. Click here to learn more about Debt Management through Debt consolidation & Debt Consolidation Loans.