Debt Management

Solutions To Getting Out Of Debt

It is a sad fact of life today that many people suffer from debt problems as a result of the financial squeeze and recession. Whilst in the bad old days the only option for escaping debt was bankruptcy, these days there are better and more tailored solutions to help get individuals or families back in control of their finances.

For those with debts of less than £15,000 a wide range of options and support exists to help solve the problem. Companies such as payplan.com can help to work out a debt management programme that works within your budget and is acceptable to your lenders. There is no need to even consider bankruptcy as an option when skilled help is on hand to find a workable solution to making ends meet.

For those with debts in excess of £15,000 it may be advisable to consider an Individual Voluntary Arrangement (IVA). This plan was introduced in recent years to help people to avoid bankruptcy and work out a structured and legally enforceable debt management plan between lenders and borrowers. It may be that at the end of the IVA period (usually 5 years) any remaining debt can be written off. This has to be arranged through an authorised insolvency practitioner but companies such as payplan.com have a number of professionals on hand to talk through your options and arrange the best plans to ease your debt problems.

So whether your problems come from mortgage arrears or credit card borrowing there is generally always a way to get back in control and rarely the need to consider bankruptcy. This really is the final resort to clearing all debt problems but can have many long lasting and penal consequences for your job prospects and future credit rating. Whilst an IVA may impact your credit rating and make borrowing more difficult, the details are not published and no one need know unless you choose to tell them. If considering bankruptcy then get free advice before you act from any debt management company such as payplan.com.

Whilst problems caused by debt rarely go away unless you take positive action, help is at hand and free advice is available so you can always know what your options are. In addition to payplan.com free advice can be sought from your local office of the Citizens’ Advice Bureau. Avoid bankruptcy and act today to sort out your debt problems fast.

Most lenders would rather have you repay over a longer period than not at all. That means that monthly payments can be eased by arranging with them for a reduced amount over a longer period of time. If you have a number of lenders then looking at a debt consolidation loan or using website providers such as payplan.com can ease the burden of liaising with them all to get a manageable plan in place.

Debt Management

Reducing Your Credit Card Debt with Balance Transfers

Credit card debt is easy to rack up and difficult to pay down. One reason that it can be so hard to pay off credit card debt are the high interest rates that many cards carry. If you are only able to make the minimum payment you might find that every dime you are paying toward your credit card is only covering the monthly interest. It might seem like a lost cause and like you will never be able to get out of debt, but there is hope. Learning to use balance transfer offers to your advantage can help you to reduce your credit card debt and pay down your balances much more quickly.

If you don’t understand balance transfers it might seem unlikely that moving your money around will actually help you to pay it off. It does work however. The trick to this process is finding credit cards that offer low interest rates on balance transfers. This helps by putting yourself in a better situation and allowing you to spend less money on interest. Look for credit cards that offer 0% balance transfers, as these are provide the most opportunity to save.

Once you find offers with 0% APR balance transfer deals you can start transferring balances from high interest credit cards and start saving. For example if you have a credit card with a 20% APR you should move this balance to the 0% card. Once it is transferred you can pay down the balance without having all of your money go to interest payments. This allows you to finally get on top of your credit card bills and start making a dent in how much you owe.

Of course these 0 balance transfer offers are typically only for a limited amount of time. Credit card companies use them to attract new customers. However, this does not mean that they aren’t beneficial for you. If you aren’t spending money on interest the money you pay will go toward your actual credit card debt. Even if the offer is only for 6 or 9 months that is still 6 or 9 months that you can make progress on your debts. Make sure that you take full advantage of the opportunity that you have during this time of 0% interest by paying as much as possible toward your credit card debts so that you can make progress and reduce your debt before the 0% rate expires.

This is especially important if you are based abroad as many countries have higher interest rates than the US. You can still get 0% offers like this one from Austrailia, but you need to use the interest free months well http://www.hsbc.com.au/1/2/personal/credit-cards/balance-transfers.

Transferring the balances from your high interest credit cards to lower or 0% interest options is a great way to start reducing your credit card debt and take control of your finances. If you aren’t spending money on interest you can actually start reducing your debt.

This is a guest post by Jenn D

Debt Management

Four Signs You Should Consolidate Debt

Drowning in a pile of debt is a stressful way to live. Debt consolidation may help, but there are fees involved and it’s a time-consuming process, so it’s not for everyone. Still, it may help you avoid bankruptcy, and you don’t necessarily have to have good credit to qualify. Examine your individual situation for signs that you should apply for bad credit loans and consolidate your debt.

1. Living Paycheck to Paycheck

If you have so many loans that you can never put any money into savings, and you struggle to pay for necessities, you need a solution that will lower your monthly payments. This will give you time to build up a safety net and to purchase necessities without resorting to credit cards and more debt.

Consolidation may be the answer, if it results in a lower monthly payment. Lower interest rates are a positive as well because they’ll allow you to pay off the debt sooner, but it’s not always what you get with consolidation. Turn to consolidation only if lowering your monthly payment and dealing with one lender instead of several can help uncomplicate your life. This is usually the case with those living from paycheck to paycheck, so it might be worth consideration. 

2. Falling Behind With Payments

Falling behind with your payments as you struggle to stay afloat could be a sign that you need to consolidate your loans. Increasing your debt by relying on credit cards isn’t healthy for your credit score, as failing to pay the minimum amounts can damage your credit score even further, compounding the situation and starting an endless cycle of debt.

Consolidation allows you to work with one lender and only worry about one loan repayment each month. It’s possible the lender will be able to lengthen your payback period, which could mean a lower minimum payment each month. A consolidated loan may also offer a lower interest rate, which means that in the end, you’ll pay less and may become debt-free sooner; however, do expect repaying your debt to take a long time regardless. Still, consolidation may be your only option to avoid bankruptcy and losing your home or car when your paycheck doesn’t stretch far enough.

3. First-Time Consolidation

If you have consolidated in the past and you’re thinking about consolidating again, consolidation may not be the answer. This is especially true if you haven’t finished paying off the previous consolidation. Consolidation impacts your credit score somewhat, and there are fees involved, so it shouldn’t become a frequent occurrence.

Look at consolidation as a one-time solution to help you climb out of insurmountable debt and to learn to live within your means once you’re free of debt. If you’ve never consolidated before, then this is the time to take advantage of this option to get back on your feet.

4. Lenders Won’t Help

Lenders would rather get their money in the long term than have you completely default. For this reason, many of them are willing to work with you in the light of extreme financial difficulties by extending your repayment period to lower your monthly payments, reducing your interest rate or, in rare cases, reducing the amount you owe. Federal loans, such as student loans, are especially likely to qualify for some form of debtor assistance, especially since defaulting on student loans, while damaging to your credit, won’t lead to as severe consequences as defaulting on home or car loans.

If you have spoken to each of your lenders and they won’t offer you any assistance, or the assistance they offer still isn’t enough to make a sizable difference in your living situation, only then should you consider consolidation. Consolidation will let you pay off all these individual loans, potentially lowering your total monthly payment or interest rates and allowing you to deal with only one provider.

Image from Flickr’s Creative Commons

About the Author: Allen Dhawan is a contributing blogger and loan officer for a credit union. He writes frequently for financial websites.

Image Source: http://www.flickr.com/photos/gemstonefinancial/5383051791/sizes/m/in/photostream/

Money Management

Life’s Little Surprises

While a budget can help you keep track of daily expenditures and monthly expenses, it can do little to prepare you for the many surprises that life always seems to bring. At some point, the car will break down, a job will be lost, illness will strike or some other surprise will rear its financially devastating head. Since you don’t know what surprises your life will bring, it can be hard to plan. Here are a few tips to help you prepare and handle these financial surprises when they do strike.

Get Out of Debt

Probably the most common theme on all personal finance sites is the great need to get out of debt. If you aren’t spending your monthly income on debt, you will be better able to handle unplanned and unexpected expenses. Start paying down your debts today. When trouble does come, it will be easier to borrow money if necessary if you aren’t already buried in debt. Additionally, you will have more money to save each month if you aren’t spending it on interest and fees. Make a plan and stick to it and start working on eliminating debt.

Make Sure You Have Enough Insurance

You can avoid some major financial disasters by simply having enough insurance. Make sure that your insurance policies are up to date. Also make sure that you have enough coverage. Insurance costs a little each month, but is a lot easier to pay than one huge expense down the road. If you want to protect yourself from surprises later, get health, life, car and home (or renter’s) insurance today.

Stock Up

You also need to build a reserves whenever possible. Have a little extra money in your bank account, a little extra cash in your house and some extra food in your cupboards. If you have a little more than you need now, it can help sustain you when times get tough.

Plan for the Future

Life is uncertain. However, you can plan and minimize your risks. What would you do if you were to lose your job? Do you have a backup plan? What skills could you learn now to help you in the future? If you can learn to do a job on the side or get a little more education, you may be better qualified for future positions later. Come up with a backup plan and have ideas in mind if your situation should change.

Surprises will happen; plan for them. These ideas will help you prepare for the many financial surprises that wait in your future. Remember if you don’t plan ahead, you are just asking for trouble.

What ways do you prepare for life’s little surprises?

 

Do What You Want

Start Doing What You Want

I want to welcome you to the rest of your life.

It’s not everyday that we take the steps necessary to make a life we want. I’ve been doing that for a little bit on the side but I didn’t go full speed until I was let go from my day job.

When that happened my heart was racing but you know what? I wasn’t scared.

My heart was racing because one, it came out of nowhere so it was more of a surprise than anything, but two because I knew I wanted more than what that job could give me and I was ready to hit the ground running with my new endeavor of working for me, being my own boss.

I’ve been that way part time for about 8 months before I lost my job, so I did have a small net to catch me.

The point I’m trying to make is that you should start NOW!

Start planning your escape from the job world before they kick you out and you have no choice but to go back begging for a new one.

I made an alternative life for myself, and while I was thrust into it a little sooner than I planned, I’m more than happy about being my own person, with my own dress code, and my own rules.

Is that you want in life?

If it is, then get excited because this course is going to show you how I set up my side business doing what I love and how you can do the same thing.

I’m going to go off on a tangent real quick

*Begin Tangent*

Because this is my life now, I want to let you know that throughout this course I’m going to be showing you the products I use and the links to them will most likely make me money (I gotta eat). If a product costs money, I’ll try to tell you about a free alternative. But the thing I learned about free stuff is that they usually take more time to do the same thing as a paid product. That’s pretty much the major difference, just to let you know. But I do try to use free whenever possible because I’m pretty patient and I like free.

*End Tangent*

I really hope you get a lot out of this course and I want you to know that I’m trying to bring as many people out of the Matrix (yea I know it’s an outdated reference but it will always apply to the world) as I can.

It’s time to take the red pill, enjoy and remember to Live Your Passion!