10 Tips to Get Out of Debt Fast - How to Save $1000 From Your Bills

As with all things this will only be possible if you are really disciplined. You must not add to your debt pile or borrow any more money until you pay off the current cash. Give yourself goals and timeframes when you'd like to achieve things. For example; to pay my store card off before Christmas. If that's not realistic then extend the date. You have to push yourself with this though. You're literally throwing hundreds of dollars away each month of your hard earned cash. First thing's first; STOP SPENDING!

1. Cut up those cards!

If you don't have the discipline to refrain from using any store or credit cards then they have to be cut up. It's too tempting to say 'I need that shirt; it's only $20 I can afford it'. No you can't! If you have debt on store cards that charge you high interest rates then they have to go. Only treat yourself to that shirt at the end of the month once you've saved $20.

Store cards can typically charge around 30% APR. That means every year that you have $100 on that card you will pay $30 just in interest on that amount. Now how many people have store cards with $1000 on them? Just imagine now $300 of your hard earned cash going straight down the pan! If you have $3000 on store cards, that's almost $1000 before you've started! Credit cards can charge similar amounts but if you shop around you can get much better deals. See below for Credit Card tips.

These are probably the most expensive cards that you have, so get rid of these first. That should be your first main goal. Look at which ones you have and how much you owe on each, then target the first one with a timeframe of paying that off. Push yourself you'll reap the benefits much quicker and be out of debt fast. Only then will you see how far your income actually goes each month. You will be amazed!

2. Switch credit card provider

If you absolutely must have a credit card make sure it has benefits such as a 0% introductory offer for purchases or 0% balance transfers. This is 'free' money providing you learn how to control your spending habits. Some credit card providers give this for up to 12 months. That should be enough time for you to get your house in order shouldn't it?

However, it is possible that your credit rating is shot and you can't get a new credit card. This isn't such a bad thing trust me. If you're in this debt ridden situation in the first place that last thing you need is people throwing offers at you that you can't pay off when the introductory offer ends!
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You can even try using only cash each day. I understand credit cards are convenient and sometimes the only way to pay. See if you can get used to budgeting with what you have each day in your purse to use, instead of throwing that plastic around like there's no tomorrow!

3. Stop the overdraft

Again, another expensive way of saying 'use me when you're really tight on cash'. The overdraft facility is there for emergencies only, not a target each month of what you've got to spend! Typically around 19% APR is just way too expensive in the current economic climate, particularly when the interest that you earn on savings (SAVINGS! What savings, I'm in debt!) are only 2-5%. Talk to the bank manager and ask for a reasonable amount on your account as a buffer zone. This overdraft must only to be used when things get tough.

Best option is not to have one at all. If you can discipline your spending so that you don't spend all of your income each month then you're already saving money by not using the overdraft.

4. Pay off the loan(s)

If you have more than one personal loan then again as with the store cards, target the highest interest rate loan first. Calculate how quickly you can feasibly pay that one off without having to eat bread and water each month. If you have two or three different loan providers see which one has the lowest interest rate and enquire about switching the other debts to that provider. You may find another bank or provider with much better interest rates for the aggregated loans sum.

If the amount you pay each month is $200 for one loan, try and stretch yourself to increasing the payments to $250. This will get the debt out of the way much quicker. Or decrease the term remaining to finish the loan. This will automatically increase the monthly amount payable. As long as it's manageable then push the amount up as far as you can to repay each month. The temptation is to think if I get an extra $2000 we can have that holiday we talked about! NO! The exercise here is to start getting rid of the debt so that you can holiday more frequently with your own CASH!

5. Switch utility providers

How many companies are there now that you can turn to? In the UK I can think of 8 different providers that offer joint gas and electric supplies. You're not usually tied in either often so you can switch whenever it suits your circumstances. Some may tie you in for one year but that's not a long time.

They all have different offers depending on the size of family living in the home. It's all here online so make the most of the search engines and even the comparison sites to help your decision making. This is time well spent to save hundreds from your bills. Look in detail at the offers and when do you actually use the main part of your gas and electricity. If it's peak time as you're a stay at home Mom then look for the best deal for daytime tariffs.

6. Try a different bank for your mortgage

If you've never missed payments on your mortgage then you should be able to find a more competitive rate than what you've currently got. When we initially purchase our home we're offered all kinds of discounted or tracker rate mortgages. Once that discount period has finished we're generally paying through the nose. Providing there's no tie-in period, look to switch again straight away. You may have to pay a setup fee but do the math and if over the discount period you're going to save $2000 and the setup cost is only $500 then it's worth taking the offer. You have to think on your feet here when the bank salesman is pressing you to how good this deal is! Walk away and compare 2 or 3 banks. They still need solid customers to give them business in this economic slump.

What if your credit rating is not good enough at the current time? Well you just don't have a choice and must stay where you are for now. If someone out there is going to provide you with a loan when you have a bad credit score then it ain't going to be a cheap deal! They have to factor in defaulting from your payments into their costs of doing business with you.

7. Reduce unnecessary expenses

How much is your cell phone bill each month? Can you reduce the plan from $100 to $50? So many special offers out there to tempt you; latest handset, more talk-time, 1000s of free SMS messages, free internet. Just make sure the contract length doesn't tie you in for more than 12-18 months. That way you can still get that latest gadget phone, instead of being left with the old brick.

Cable or satellite. Do you have a free plan or are you paying for the most expensive deal with all 400 channels? How many channels can you watch at the same time! Jeepers, get away from that one-eyed monster. Satellite or cable boxes used from e-bay go for peanuts. Then don't sign up for a plan just take the free channels that are being offered. You can always get stuff you really want to watch from the internet (for legal reasons I'm not advocating doing this!!

Switch things off! When you're not in the house make sure everything is turned off. How many small red lamps are shining on all the equipment that's on standby in your home? Turn lights off behind you. Just watch your meter slow right down. Do you ever leave the TV on when you're not watching it? Boil the kettle and forget to make the drink? Turn the oven on for 30 minutes to heat up before starting to cook? These are all small things that can make a huge difference.

Gym memberships can be expensive. Can you reduce this plan or find another gym? If you go there specifically to socialise then take your friends with you to a different gym or ask for a group discount for all of you at your current one. Stop going altogether until you're out of debt. Get some free weights at home if you don't have some in the garage already collecting dust! Cycle or run around the block near your home instead with your friends.

If you're going to visit friends that live nearby don't take the car. Get walking, cycling, run or public transport. Save the planet, get fit and save cash all in one! Even cheaper get them to come to you (a little cheeky doing this every time though, and they may catch on you never go to their house!)

8. Organise your outgoings

Only use cash. Work out how much cash you have left once all essential outgoings have been paid. Break this amount down to weekly and then daily. When you see your purse is empty you know you can't spend anymore that day! It's a real eye-opener to find out how little $20 buys these days and how quickly it goes.
Pay all bills around the day of the month that you get paid. I'm not sure how many people out there still get brown envelopes stuffed with cash these days? Or a weekly pay cheque? If you're paid monthly by your employer on 1st of the month then make sure you have standing orders from your account on 2nd or 3rd of each month. This way, once all the bills have gone out, you know exactly what you have to play with for the rest of the month. Let me tell you this may not be pretty either! Don't worry, at some point in the near future most of the expenditure from loans and cards will disappear. You'll then just be left with the essential bills.
Once you understand exactly how much spare cash you have once everything has been paid you can make sure you put aside at least 10% of that sum. If your outgoings exceed your incomings then there is a problem. The ways to fix that are get a higher paid job (easier said than done buddy!) get a part-time job in addition to your full-time one (man how many hours do you think I have in a day? When do I take care of my family?!). The sooner you get yourself back on the straight and narrow with your finances you can kick that second job into touch and spend more quality time with the ones you love. Let's say your income is $2000 per month. Your outgoings are $1300. This $700 isn't what you have now to blow on what you want! Take off $150 for emergencies or the savings pot. Now live off the $550. Budget well each and every day. $550 for the month equates to around $18 per day. That will go like water if you're not careful.

9. Get streetwise

Don't pay the ticket price, ever! If the sticker says full price walk away. When it's time to treat yourself to that skirt in the sale (I'm talking mainly to the females here but hey, whatever floats your boat!) make sure you have that $30 that you put aside over the last couple of months. It feels so much nicer to pay cash that you've saved and then get the extra discount too. Make your money do the work friend. Each and every cent you earn can go that little bit further. Delayed gratification is what you need to practice. This means save first and purchase when you can, and always at a sale price.

BOGOF (I assume this term is used outside of the UK?) Buy-One-Get-One-Free offers. There are always deals at your supermarket. Heck if you can't eat the stuff this week, freeze it until you're ready to eat it. Savings on your food bill can be made in many ways; loyalty programs with certain chains of supermarket are another nice bonus. Reduce the unnecessary purchases. Get those sweets out of the trolley! Instead of all the brand name items try the supermarket equivalent. If it's no good then go back to the branded stuff next month.

Do you really need the latest gadgets or toys? For me, I always wait until the model has been on the market a while and when the latest model is about to be released, I get the older one for a big discount. Buy second hand. Providing what you're looking for isn't too high a ticket value then why does it have to be brand new? Remember you're in debt here so these trappings are not actually necessary anyway.

10. Look at other ways to make money

Garage sales, distribute leaflets, rent a room in your home, and borrow books and DVDs from the library. There are 101 ways that I'm sure you can think of in a very short space of time if you apply your mind. Sit down and think about this with your partner or a friend. Bounce ideas around, there is nothing too silly to put down on paper. A friend of mine got his son making his own cash by selling a niche product to his school friends! It was a really cool idea that Dad didn't think would work but it's amazing what you can do if you put yourself into it whole heartedly.

There are businesses out there that you can start up for a very small amount of money. I have set my online business up for less than $100. The internet is full of opportunities for 'normal' folks to do something magnificent. Don't believe the hype (great track, if some of you know that one?) of these guys who start from scratch and make 6-figure incomes in two months. I'm sure that does happen in exceptional circumstances but it's few and far between. Check out my sites and see exactly what I'm doing. See if that is something that would interest you. Fire me an email if you have any questions and I'll do my best to answer in a short space of time.

Keep at it, you will reap the benefits in a really short space of time. Don't stress yourself too much by over-budgeting and not being able to enjoy life. Just limit what you're doing that wastes money. Give yourself a pat on the back by spending a small amount at the end of the month if you've made great progress. Discipline is the key. I have been through all of the things in this report and got myself out of debt so I understand what you're going through. It does take some time but it's worth it trust me!

I hope you find this report useful, enjoyed some of the funny stuff and it gives you hope that you can be debt free and start living the way you want to.

Loads of free tips and tutorials for Internet Marketing and check out my rags to riches journey on my blog http://martinsonlinemoneymaking.blogspot.com/ Thanks for reading this article, Martin

Release Yourself From The Burden Of Debt

Do you feel like you are in debt prison? Are you in financial turmoil wondering how you can continue to keep everything from imploding on you? Did you know that there were actually debtor prisons in America before the Revolutionary War? Robert Morris, a signer of the Declaration of Independence, was imprisoned in the 1700's for failure to pay debts. The bible also warns against borrowing more than we can afford to pay. Proverbs 22:26-27 says do not be a man who strikes hands in pledge or puts up security for debts; if you lack the means to pay, your very bed will be snatched from under you.

Credit card use has continued to grow in leaps and bounds. From 1996 to 2005, the total number of bank credit cards almost doubled. In 2004 alone, credit card companies generated $43 billion in fee income from late payment, over-limit, and balance transfer fees. The Federal Reserve reports that the total US consumer revolving debt reached 2.46 trillion in 2007. This large increase in card usage has created a "fee feeding frenzy," among credit card issuers. The whole credit card industry has really evolved for the benefit of creditors in recent years, with the industry imposing fees and increasing interest rates if a single payment is late. Penalty interest rates usually are as much as 30-39%, while late fees now often are $39 a month and over-limit fees are as much as $35. If you consider how that can add up over just one year, it could be very expensive. Consider this: late and over-limit fees alone can easily rack up $900, and a 30 percent interest rate on a $3,000 balance can add another $1,000.

The bottom line is, credit card companies want to issue as much credit as possible to as many people as possible and hope you barely make the minimum payment. It is the exact same way these cash advance companies all over town work. They could not care less if you ever pay it off. In fact, they do not want you to pay it off. While most card issuers claim this is the cost of doing business, consumers should not be charged excessively for small errors. Ultimately we are responsible for our own financial choices and credit purchase decisions. However its clear to see that credit card companies will continue to entice and market low teaser rate introductory offers (the bate) and make it easy for us to use the cards. This is attractive to the consumer because they can avoid waiting and have the items or purchases they want now. But what price will we actually pay for these items?

That said, roughly $355 billion in mortgage loans are set to adjust during 2008, to significantly higher interest rates. This means many borrowers may face additional difficulties. Hopefully the Bush administrations plan for a rate freeze for adjusting arms and foreclosure prevention will help many consumers avoid catastrophe. The combination of mortgage woes and credit card debt pileup has made many people feel as though they just walked out on a pirate ship plank with nowhere to turn.

So, what is the best way to find the road to financial prosperity?

First and most importantly, if you are in an adjustable rate arm loan, check the date that it is set to adjust in your paperwork from your title closing. If you closed two or three years ago and took one of these teaser loans it will adjust 24-36 months from the original closing date. This is very important because when it adjusts it can increase by two or three interest points. Your lender should notify you 30 days prior to your reset date and you may get reminders from lenders vying for your business. Don't get yourself caught in this self destruction.

Mortgage interest rates are anticipated to remain steady or dip slightly in 2008; this may be a good opportunity to refinance into a 30-year fixed-rate. The FHA modernization act will make refinancing a good option for damaged credit borrowers to qualify for up to 95% of their homes value at competitive single digit interest rates and avoid incurring prepay penalties. The teaser arms sold over the past 2-3 years are under extreme scrutiny due to the explosive foreclosure epidemic and its effect on the overall economy. The FHA Secure is also a great option for those who need help to avoid foreclosure, allowing them to roll in the arrearage. The future of sub-prime lending appears to be bleak at best. Many borrowers had little options other than 2 or 3 year fixed rate sub prime arms over the last few years because of credit issues, and aggressive lenders pushing these loans on poor credit borrowers. Unfortunately, these same borrowers are now in trouble and imploding due to a cocktail of housing value depreciation, adjusting rates and maxed out credit cards. The bottom line to most of these issues is proper guidance and good decision making. Additionally, it is prudent that you choose an advisor that will educate you about any loans that are different than the norm, like arm loans, negative amortization loans and loans that do not collect escrows. Now, if that is not upsetting enough, federal regulators pressured credit card issuers to double the minimum payment requirements on credit card balances. This can be both good news and bad news for many Americans burdened by debt. While it may force you to pay the balance down, it can mean disaster for many who cannot afford the extra out-of-pocket expense each month.

Should you use a mortgage refinance as an Option to Debt Consolidation?

If you are a homeowner with verifiable income, who pays their bills on time for the most part, but who would sincerely like to be debt-free and financially secure while still young enough to enjoy it, maybe even become wealthy. Whether you've had some credit problems and have a blemished credit report, whether you're struggling now and need immediate help to avoid foreclosure, or are doing okay but wish there was a strategy to get out of debt and build some net worth. Then this could be a possible option.

When you really analyze your financial situation, are you using too much of your income just servicing debt making the minimum payments? You absolutely can not build wealth overusing your credit cards you have to make a conscious decision not to make purchases with credit cards unless you can payoff the balance. While home equity has been reduced dramatically in some declining markets, many people may still be able to benefit from restructuring the way they pay their bills and by using their home's equity as the means of accomplishing this.

Do you have two loans with one of them adjustable? Consider consolidating your 1st and 2nd mortgage loans. Do you have high balance credit card in which you are being charged late fees, over limit fees and excessive interest? Consider paying off obligations such as auto or high rate credit cards, overdue property taxes or insurance premiums.

This will wrap up your existing obligations into one tax-deductible payment and puts you back in control of your debt with one manageable payment. Consult your accountant or tax advisor on this as it could equate to a 20-30% savings in interest and your overall Net Effective Rate. If you can eliminate your credit card payments, late fees and penalties and start enjoying increased monthly disposable cash flow, you may actually be able to make financial choices that will help you build a positive net worth. Another way you can reduce mortgage interest further is by signing up for a biweekly repayment plan that splits your mortgage into two monthly payments, this forces you to pay down your mortgage interest much faster. I know, I know your friend said just make one additional payment per year to accomplish this, seriously! Who does this? I say forced biweekly, kind of like forced property taxes through escrows, you get the idea! Then take the savings, say for example $200 a month, and purchase an equity indexed life insurance policy that will protect your family if you die to cover the mortgage balance. More importantly, if you live, the account your premiums go into is tied to an investment account so that it will accumulate a cash value that could be drawn on at retirement, and essentially you could pay off your mortgage tax free. Imagine the benefits of having fewer bills to deal with every month and simplifying your financial life!

Here are a few things to consider to decide if you could benefit from a refinance consolidation:

• Do you have equity based on a current appraised value?
• Do you have a home equity line of credit that's increasing out of control?
• Do you have a loan that does not collect escrows for taxes and insurance and have difficulty paying them at the time they are due?
• Do you have too many credit cards that are near or above the credit limit?
• Do you have an Adjustable Rate Mortgage on the brink of spiking Up?
• Do you make minimum payments on credit cards and are unable to make a dent in the balance?
• Are you saving and investing less than 15% of your income?
• Would you like to take advantage of the FHA Modernization and qualify for a great rate?
• Would you like to get out of that high interest rate sub-prime loan and qualify for a single digit 30 year fixed rate loan without a prepay penalty?
• Are there tax-deductible savings opportunities like pension plans, IRA, Keogh, Medical Savings Accounts, etc. that you are missing out on because you don't have enough money after paying bills to participate in them?
• Would you like to take a really nice vacation or make some improvements to your home this year without going into debt to do it?
• Would you like to eliminate years off of your mortgage balance?
• Do you have a mortgage protection insurance plan to protect your home and family should you die or become disabled?

If any of these questions apply to you, consider the following:

The average personal savings of a retiree amounts to about $6,500. The average benefit check is about $968.00 according to the Social Security Administration. Baby boomers are expected to enter retirement starting in 2010 and considering people are living longer, it is expected that these funds will be exhausted by the year 2040 and will create a deficit in the trust, only providing 72% of what is needed.

The key thing to consider with proper debt management is to make a conscious effort to avoid using credit cards for unnecessary purchases. If you cannot afford it, do not buy it! More simply said than done, I know. Look for ways to curtail extra activities such as eating out everyday, soft drinks, anything you can do without. Use the extra savings to pay off your high interest cards first. Contact a credible mortgage advisor to see if you qualify for a debt consolidation loan at a competitive interest rate. Transfer non tax deductible interest from other debts to a tax deductible loan. If the loan will not create a tangible benefit to your financial picture do not do it.

Christopher Beard is a specialist in helping people with credit issues through debt consolidation mortgages. He is the president of Trinty 1 Financial Group and works with clients with planning mortgage and insurance strategies visit his site at http://www.trinity1financialgroup.com and http://www.bkloanoptions.com

The Pros And Cons of Bankruptcy And Debt Consolidation

There are a lot of options out there for getting some relief from your debt. Listen to the radio long enough or watch some television and there inevitably will be a debt consolidation company offering to settle your debts for less and consolidate them together into an easy payment. You also will hear from the bankruptcy attorneys, who offer to help you maximize how much debt you can discharge and how much property you can keep in a bankruptcy filing. So what to do, both offer to take care of your debt, and who really wants to file for bankruptcy? Here is a short examination of the pros and cons of each, Bankruptcy and Debt Consolidation.

First debt consolidation. Lets start with the pros.

1) No bankruptcy. You are not filing bankruptcy. Lets face it, bankruptcy has its cons which will be examined below, and there is a strong social stigma associated with it. People are embarrassed to file bankruptcy. Beyond the social reasons not to file are the financial. There is a benefit to your short term future credit if you avoid bankruptcy. So for many individuals just avoiding a bankruptcy is reason enough to go with debt consolidation. If it works.

2) Keeping property. This is important depending on what you own and how nice it is. Many people filing chapter 7 bankruptcies are what is considered no asset cases. Meaning that with bankruptcy exemptions and other timing options of filing the bankruptcy petition they keep ALL their property and do not lose a thing in a bankruptcy filing. Lets face it though many of these people do not have much which is why they get to keep it all, but you might be surprised as to how much you can keep in a bankruptcy. If you have a lot of nice things though, filing bankruptcy might mean getting rid of them, and that, for some, is unthinkable.

3) Your credit score. That all important credit score now affects everything from how much you pay for car insurance to whether or not you get offered that great job you went out for. Avoiding bankruptcy, especially in the short term will do wonders here. However, many people considering a debt consolidation already have terrible credit, a bankruptcy might not be able to worsen it.

4) Could be wonderful. When it works, it can work great. You get a great deal from the creditors, you pay off the debt for less than it is worth, you are free and clear and have avoided bankruptcy, and the future credit problems that bankruptcy can bring.

And now the cons to debt consolidation.

1) Taxes!! I put this first because many people do not realize this, but any amount of debt you are forgiven in the debt consolidation process is considered taxable income. That is right, prepare for the possibility of a big tax bill at the end of the year.

2) The price. Debt consolidation can be costly, many times much more than a bankruptcy attorney would charge to represent you in a bankruptcy. This does not mean that it is not worth it sometimes, but that will depend on all the factors of an individual case. How much exactly is being saved versus the costs of going through the process.

3) The time. The debt consolidation process can take awhile. Just think it through, you or your debt consolidation team must get all your creditors to the table, or at least most of them to make it worth it. Then they are all going to have to agree to some sort of deal where they may take less money in exchange for fast and guaranteed payment. This can be difficult or maybe impossible depending on how many creditors there are and how disposed they might be to making or not making any sort of deal. The timing here is important, especially for people who may be facing imminent foreclosures, repossessions, or garnishments. While negotiations drag on, property you depend on to make those future payments may be being taken from you, like your car.

4) Could go badly. The result of a debt consolidation might be to leave you burdened with a lot of debt that still has to be paid back over a significant period of time. Depending on your situation, debt consolidation might be one of the big steps on your way to a bankruptcy. This does happen and is unfortunate because all that money paid to the debt consolidation company is money not well spent. Remember that the creditors in this situation have no obligation to accept the debt consolidation plan. The plan really only is as valuable as the creditors allow it to be.

Now, lets look at some of the pros as far as a bankruptcy is concerned.

1) The fresh start. You get all the debt taken care of, and you are setup with a fresh start and opportunity to remake your financial life. There really is nothing else like it, not even close. Being able to walk away from all that bad luck, or those not so good decisions is powerful stuff. There is no tax burden for the unpaid debts, there is nothing you have to look back on.

2) Very quick relief. Although you may not get your discharge for a few months in a chapter 7 and a few years in a chapter 13, the automatic stay arises immediately and forces your creditors to wait, stop all collection efforts, all lawsuits against you, all garnishments, repossessions, or foreclosures. This is very powerful and again there is nothing else like it. You can even prevent your utilities from getting turned off, or get your utilities turned back on. Immediate, quick relief, can be very important.

3) Relatively cheap. Costs to hire a bankruptcy attorney can vary widely and every case is different and some more expensive than others. That being said many are surprised to hear that while not cheap in and of itself, relative to other options bankruptcy is fairly affordable. You will have to check the prices in your are and with the particular attorney you want to hire. Again prices are going to vary.

4) Very reliable. Bankruptcy just works, it is the law, and it is used often. A competent bankruptcy attorney can minimize the property loss to their client while maximizing the debt discharged, and if bankruptcy cannot help you they will be able to tell you, and not waste your time and money. Compared to a debt consolidation agency, who may or may not be able to make that great deal happen between you and your creditors, bankruptcy is a reliable option.

Now the Cons to bankruptcy.

1) The stigma. There is a social cost to filing bankruptcy, no getting around it. People may think lower of you because of filing. These are people who do not understand, and may never, because they will never struggle at all financially. Unfortunately, or fortunately, these people are everywhere and you may have to put up with their attitudes about your bankruptcy.

2) The property loss. You may have to lose property. For some that property might be significant either in dollar value or sentiment. Many bankruptcy filers do not have to part with any property, and there is always a chapter 13 for those who qualify, but not everyone qualifies for a reorganization under a chapter 13. Remember though, the property that is exempt from being taken in a bankruptcy is significant, check your applicable exemptions to find out more.

3) The credit score. Your credit will get worse if it is possible for it to get worse. In a chapter 7 the bankruptcy will be on your record for 10 years, for a chapter 13, it will be 7 years. You will probably be able to get credit, but you will not get great terms and it may take some persistence on your part. This is definitely one of the bigger prices you pay for getting rid of all that debt.

4) Availability. Bankruptcy is complex and is a specialized area of legal practice. Some individuals try and do it on their own. This is not recommended. There are many pitfalls that can ruin your chances for a discharge, and could even hurt you further. Even with an attorney, filing bankruptcy takes a bit of work. You have to go through your entire financial life and past. There is a lot of financial documentation that has to be collected and filed correctly, and while an attorney can help with that, there is still a burden on the person filing to dig that info up. Then there are the people who just, for one reason or another, cannot file bankruptcy. Filing a bankruptcy petition is not available to everyone, whether it is a recent past bankruptcy, or some other reason that makes filing impossible, there are many who would benefit but cannot be helped by bankruptcy.

So there you have it, not a comprehensive analysis by any means, but there is a list of some of the more pressing issues regarding the differences between Bankruptcy and Debt Consolidation and some pros and cons of each.

DISCLAIMERS: Ohio law governing attorneys and attorney advertisements require me to advise that this article is an "ADVERTISEMENT ONLY" and is not legal advice, is intended for general informational purposes only, is directed to the general public, and is not directed at any particular person, group of persons, or entity.

By an act of Congress I have been designated a debt relief agency, and I help people file for bankruptcy under the bankruptcy code.

Samuel Warden is a Bankruptcy Attorney, practicing in Dayton Ohio. You can visit his Miamisburg Bankruptcy Lawyer http://dayton-cincinnati-bankruptcy-lawyer.com website, or read his Mason Bankruptcy Lawyer http://dayton-cincinnati-bankruptcy-lawyer.com/blog Blog for more information on Ohio bankruptcy.

Debt Relief Solutions

U.S. consumer debt is at approximately $21,900 per household, nearly double what it was ten years ago. Consumer debt today equals 132% of the average household's annual disposable income. Many families are looking for solutions to their mounting burden of debt. There are essentially two major avenues for relief - non-bankruptcy options and then bankruptcy.

Non-Bankruptcy Debt Relief Solutions

Liquidating assets. This is the most commonly used non-bankruptcy debt relief solution. Because it is easy, many people invade their retirement accounts but there are often tax implications for early withdrawals. Refinancing a house and using the equity to repay other debt is another popular option. But of course you must pay for it plus interest plus any refinancing fees over a 20 or 30 year period.

Credit card cash advances and balance transfers. These are often readily available options but at high interest rates. Too often these solutions are only temporary and if a person's spending habit hasn't changed, those individuals will find themselves right back in the same situation of too much debt and too little cash.

Credit counseling. Credit counseling is a surging industry that has come under scrutiny because many of the outfits function like glorified collection agencies, receiving fees from clients' creditors on recovered debts. Success is low and the payments often exceed what people can afford on a monthly basis. Another issue is creditor participation - not all creditors will participate. Here are some tips if you are considering going this route:

1. If you are considering credit counseling, make sure you do it face-to-face. Do not provide a voice over the phone with all of your important information. These days, you can not even be sure that the voice on the phone is even in the United State.

2. Ask the credit counseling company if they can assure that all of your creditors will participate. If you have a creditor that is not covered then you have a debt that will have to be settled outside of the credit counseling plan.
3. Make sure that you can pay both the credit counseling amount plus the amounts you might have to pay outside of the plan.

4. The credit counseling alternative will not address payday loans, secured debts and old liabilities which are in collection.

5. Credit counseling will be reflected in your credit report and will impact your credit rating.
Negotiated settlement with creditors. This could take the form of a reduction in principal for a lump sum payment or simply extended payment terms. The risk in this strategy is your creditors taking damaging actions against you before you have time to amass sufficient cash to pay your creditors the settlement amount. Proceed with caution and hire a bankruptcy attorney to assist you. A reduced principal settlement can have possible tax implications. If negotiating extended payments be mindful of the interest rate and know when the debt will be fully satisfied. Insure that you are dealing with someone who has the authority to negotiate a settlement with you. Be certain that all of the debt is settled and released whether through a lump sum payment or extended terms.

Loss mitigation and loan modifications are debt relief options for mortgages. Loss mitigation works to either relieve the homeowner of the mortgage obligation or create a mortgage resolution that is financially feasible for the homeowner. Loss mitigation options include:

Loan modification: This option modifies a homeowner's mortgage and both the lender and homeowner are bound by the new terms. The most common modifications are lowering the interest rate, reducing the principal balance, 'fixing' adjustable interest rates, increasing the term of the loan, forgiveness of payment defaults and fees, or any combination of these.

Short sale: This option is made possible by a lender agreeing to accept a payoff that is less than the principal balance of a homeowner's mortgage which in turn permits the homeowner to sell the home for the actual market value of the home. This applies to homeowners with a mortgage balance greater than the market value of the property. Without such an agreement the homeowner would not be able to sell the home. There can be, and usually are, tax consequences to these deals as well as harmful effects on one's credit rating.
Short refinance: This option is possible when a lender reduces the principal balance of a mortgage so that the homeowner can refinance with a new lender. The reduction in principal must be sufficient enough to meet the loan-to-value guidelines of the new lender making refinancing possible. Tax and credit consequences are the same as with short sales.

A deed in lieu of foreclosure: An option whereby a mortgagor voluntarily deeds over the collateral property in exchange for a release from all mortgage obligations. This is extremely damaging to credit ratings.
Forbearance: This is an arrangement that allows the homeowner to make no monthly payment or make a reduced monthly payment for some period of time. Sometimes, the lender will ask that the reduced or missed payments be repaid when the forbearance has been finished while other times the lender will just modify the loan.

Bankruptcy

Simply put, bankruptcy is the legal forgiveness of debts. The bankruptcy laws changed in 2005 but you can still file. It is a bit more complicated now which makes it even more important than ever before to be represented by a bankruptcy lawyer or expert legal counsel that specializes in bankruptcy.

There are two types of personal bankruptcy, Chapter 7 and Chapter 13.

Chapter 7. This is known as the "complete or straight bankruptcy." In Chapter 7, a debtor turns over his non-exempt property to a bankruptcy trustee who liquidates the property and distributes the proceeds to the unsecured creditors. The debtor is granted a discharge of some debt; however, certain debts (e.g. spousal and child support, student loans, some taxes) will not be discharged. The amount of property that a debtor may exempt varies from state to state. From beginning to end, the typical Chapter 7 bankruptcy will last about six (6) months.

The typical person filing Chapter 7 will have a. a large amount of unsecured debt [i.e., payday loans, medical debt, and credit card debt];

b. no car loan;
c. no mortgage or does not wish to keep the home;
d. no tax debt; and
e. have little or no assets or income.

A Chapter 7 bankruptcy remains on one's credit report for 10 years. Chapter 7 relief is available once in any eight year period.

Chapter 13. This is known as the "wage earner plan." It enables debtors to retain their assets and make monthly payments for part of the debt to creditors over a 36 to 60 month period. The amount and the time of the repayment plan depend upon a variety of factors, including the value of the debtor's property and his income and living expenses. Secured creditors may be entitled to greater payment than unsecured creditors but debtors get to keep the collateral and often pay less than owed on the obligation.


The typical person filing Chapter 13 may be:

a. behind on the mortgage and wants to keep the house;
b. about to have or are already having their wages garnished and want the garnishment to stop and even possibly get some or all of the garnished wages back;
c. behind on the car note and want to keep the car or they are seeking the return of a repossessed vehicle;
d. owing taxes to the IRS or the State. Taxing authorities must immediately stop penalties and interest on your account as soon as a bankruptcy has been filed.

Unlike in a Chapter 7, a Chapter 13 filer may keep all of his property, whether or not it is exempt. If the plan appears feasible to the trustee it will typically get confirmed and the debtor and creditors will be bound by its terms. Generally, the payments are made to a trustee who then distributes the funds according to the terms of the confirmed plan.

When the debtor makes all payment as detailed in the plan, the Court will grant the debtor a discharge of the debts listed in the plan. However, if the debtor does not make the agreed upon payments, the Bankruptcy Court can dismiss the case. Upon dismissal, creditors will likely pursue legal remedies to the extent a debt is unpaid. A Chapter 13 bankruptcy remains on one's credit report for up to seven years after filing a case.

When should you consider bankruptcy?

1. If you have been served with lawsuit, judgment or possible garnishment.
2. If you are considering liquidating assets, refinancing you home, or cashing in your 401k to take care of certain financial matters.
3. If you are behind on your mortgage payments. Also if you have a foreclosure pending or intent to foreclose has been issued by the lender.
4. If your vehicle has been repossessed or you fear your vehicle will be repossessed very soon.
5. If you owe money to a taxing authority.
6. If calls from creditors and/or collection agencies are causing you and your family stress.

The down side to bankruptcy is the impact on your credit score, however, even after filing bankruptcy, if you make timely payments to creditors, within 18 to 24 months, your credit score should significantly improve itself so that you do not have to rely on sub-prime lenders and you should receive more favorable interest rates on loans. The upside to bankruptcy as a debt relief solution is that you get a fresh start without the burden of some or all of your debt.

10 Fast Moves Out of Debt

Debt is not a place one would love to visit and stay. Debt can have such a grip on your life such that movement is nearly impossible. I have been there and have come out. You enter into debt as soon as you receive someone's goods and services without paying. You become a debtor. Most people have been debtors at some point or the other in life and in business. What differs is the speed of paying up the owing (debt). Some will do it within days of delivery of goods and services while others will choose to delay and pay at a later stage. 

This can however become a way of life where one accumulates debt while enjoying the services and goods being ordered. In some parts of the world, it is easy to buy goods and access services on credit terms. They will entice you to believe that is better cash flow management to get products and not pay for them instantly but over a period of time. Hidden in that agreement is the fact that you end up paying more for the item than you would have paid if you used cash due to interest charges. It is very tempting to be in debt. You can get this imagination that "I can get all I want now and not even pay a dollar for it". The truth is you will still pay for the items regardless of the fact that by the time the demand is placed for the payment you probably have thrown away the clothes you got or the items are now so outdated you actually want to replace them with more debt. It can be an endless cycle where one will simply live and work to reduce debt. Just how does one move out of this frenzy. Here are a few steps that worked for me

The Moves

1. Identify why you are in debt - Causes - Until you identify how and why you are in debt you will either not come out or when you come out someday, you will quickly dive back into it. Are you there because you are impulsive; are you there because you have an image to protect? Why are you in debt? To know the cause of a disease is more important in the cure of the disease than administering pain killers which are merely temporary hits on symptoms not on the root cause. Take responsibility and ownership of your situation. or else you will be a full time blame-shifter full of debt.

2. Live within your means - sometimes you look around at people in the same industry or title or former college mates and you just want to catch up really fast. That will cause you to want to own what you cannot afford just because you want to appear to be making progress. The truth is when you go home and you are now with your family, it's you who faces the heat of a loan or debt you have attracted to yourself. You may occupy a good place in the hearts of your friends and yet your own family sees a great amount of pain from your irresponsible moves. The interesting thing is this: when you are in debt and you cover up, you even help your friends who may be in financial crisis with money just because you want good ratings while you actually deprive the one you genuinely owe. This is real, I have done it and I know I may not be the only one. You can own anything you want to own to the degree of your financial discipline and consistency in handling finances.

3. Own all you have - The hook of credit is covered neatly by the imminent convenience and benefits of "staggered payments". If you can afford the repayments and you are consistent with your repayments then you are not the debtor I am discussing in this article. There is peace that comes with knowing that the house you live in and cars your have are actually in your name and not the bank's name. I have watched with great sadness the effects of the recent global crisis in our neighboring nation of South Africa where owning a car or house was easy as long as you were employed. Repossessions became the core business of banks as people failed to repay loans. People ran away from their own houses in America due to the crunch. But not in Zimbabwe and other parts of the world where you needed the full payment in cash before you were deemed the owner. This crunch was not felt as much even though the economy had been sliding for over 10 years. Principle is that you do not call yourself the owner until the item is in your name. Before that you are merely a steward.

4. Come up with a well thought and well researched plan very fast - Follow it closely - Sometimes the person in debt may have a good plan on what would get him/her out. A bankable plan which can work anytime of the day. However, pride and fear of how people will perceive you can cause you to throw away every plan you creatively create. Since you are in debt there is no need to try and maintain a false impression. Your reputation is already at stake anyway. It is better for colleagues to laugh at you for a season while you actively sort your mess out than to remain perpetually in bondage while having to find creative cover up strategies. Be real, face your debt with a plan and work on it. People can only assist someone who is doing something about their situation.

5. Choose not to be comfortable with debt - Refuse it and make the relevant strides out. It is easy to give up and condemn yourself. It is even worse when you then find coping mechanisms to be comfortable with debt. You are not meant to be subject to the lender. You deserve freedom too. Throw away the very sharpened skills of avoiding those you owe. It will certainly catch up with you. When you are thrown in a pit, the optimistic person will find a way out of the pit, e.g. shout for help, find roots to hold on to etc while a pessimist looks around for cushions to make the pit a permanent dwelling place. It boils down to a decision to quit the debt mode. Until you feel the need to get out you can never make it a priority. If it itches so much then you will choose to find a solution very fast.

6. Don't withhold what you don't need - you can only watch one television at a time. What's with TVs in every hallway and in the bathroom too? Your garage is full of cars and yet you are in debt. Get your priorities right and convert some assets into cash. When your head comes out from under the waters, you can still buy newer, modern versions of the same items you are holding onto. Sell off extra assets which you do not necessarily and critically need. Items you can do without or items that can certainly cover a large chunk of the debt you have. What good is there in having many assets and yet losing a good name. Your assets can help buy back the credibility your name needs.

7. Keep communication lines open with those you owe - Sometimes if you are in debt you add stress to yourself, extra effort and work of avoiding and dodging the people you owe. Answer their calls and be transparent about your financial position. There is nothing more disarming than not running away but answering that call and saying "Mr. Davids, I do acknowledge that I am indebted to you to the tune of xx, I have the desire to pay this off as soon as I get my funds. I appreciate your patience with my situation but this is my plan..." The moment you run away you are increasing your own stress level and with stress you are depriving yourself the ability to make enough money to repay. Stress limits capacity to think straight.

8. Create a "cash cow" now - A cash cow is a project that generates cash continually. You may need to increase your streams of income if you are to get out of debt. You can easily start certain projects small enough not to require bank loans and then grow them from there. Reliance on the same salary or project may not get you out of your situation. With more projects you get the leverage when one is not performing well. If ever you have to do some additional borrowing for stocks, be very careful to go for the items you have seen to move off the shelves very fast or only order based on a valid order from your customer. Get customers to pay a deposit so that you won't use much of your own money to finance the order. Tighter cash flow management is necessary when these projects bear fruit. Focus on ensuring that with each day or month that goes, you are sacrificing your comfort to fulfill your debt obligations or promises you have made to the one you owe.

9. Monitor your spending habits - what is taking money away from you? Do you have a budget that you follow? Check on your budget and see what you can afford. Concentrate on things you cannot do without. Remove all unnecessary luxuries. Find means a ways to cut costs. E.g. Ladies, have hair-does that lasts long instead of changing weekly, buy perfume that last you months instead of buying every month-end (remember cheap can be expensive), have family meals and cut down eat out to something you do occasionally, wash your own car - there is nothing special about car wash and vacuum, plan your trips to save fuel, employ only the necessary staff to get the job done not pride in numbers, save electricity by switching on the necessary gadgets only.

10. Get a Financial Advisor - People find family doctors, family lawyers and think less of family financial advisor. It does not cost much but the advice you get is invaluable. We are not all finance or money savvy. There are people who went to school to focus just on financial advisory services. You will save yourself having to wonder in the desert wondering what to do with your seemingly insurmountable debt.

Rabison Shumba is a young African entrepreneur who has interests in Information and Communication Technology, Agriculture and Mining. He is also a motivational speaker, trainer and author. His book, The Greatness Manual and various online articles are tools for personal and professional development. Together with 100 other Career Experts, Rabison co-authored the 101 Great Ways to Enhance your Career. 

Rabison has a personal vision of impacting the lives of children in marginalized communities by creating platforms for career counsel and guidance, information empowerment and capacity building through the Greatness Factory Trust, where he currently holds the position of Chairman of the Board of Trustees and Acting Executive Director. He is actively involved in the organization of career enhancement and guidance colloquiums to propel and inspire both young and mature professionals to greatness. His areas of expertise include strategy, leadership, personal and professional development. Rabison is married to Jackie, and they have two daughters. They reside in Harare, Zimbabwe. [http://www.greatnessmanual.com] or http://www.lulu.com/spotlight/rshumba

Bankruptcy Alternatives With Debt Settlement

Alternatives to Bankruptcy Chapter 7
Credit Card Debt Settlement: The Bankruptcy Alternative
Discover how credit card debt settlement is helping millions of Americans avoid bankruptcy, start fresh, and take back control of their financial future.
With First Choice Debt Resolution You Have Access to:
Your own personal debt relief professional who will take over all collection communications
A professional debt settlement negotiator on your side who will reduce your debts 40-60%.
A debt-free life within 12-36 months
knock out your debt one at a time
Learn more about how debt settlement can provide you with credit card debt relief & save you from bankruptcy or so called "non-profit debt consolidation" companies. First Choice Debt Resolution, LLC has been voted one of the best debt-settlement companies in the country!!!
Debtors should be aware that there are several alternatives to chapter 7 relief. For example, debtors who are engaged in business, including corporations, partnerships, and sole proprietorships, may prefer to remain in business and avoid liquidation. Such debtors should consider filing a petition under chapter 11 of the Bankruptcy Code. Under chapter 11, the debtor may seek an adjustment of debts, either by reducing the debt or by extending the time for repayment, or may seek a more comprehensive reorganization. Sole proprietorships may also be eligible for relief under chapter 13 of the Bankruptcy Code.
In addition, individual debtors who have regular income may seek an adjustment of debts under chapter 13 of the Bankruptcy Code. A particular advantage of chapter 13 is that it provides individual debtors with an opportunity to save their homes from foreclosure by allowing them to "catch up" past due payments through a payment plan. Moreover, the court may dismiss a chapter 7 case filed by an individual whose debts are primarily consumer rather than business debts if the court finds that the granting of relief would be an abuse of chapter 7. 11 U.S.C. § 707(b).
If the debtor's "current monthly income"(1) is more than the state median, the Bankruptcy Code requires application of a "means test" to determine whether the chapter 7 filing is presumptively abusive. Abuse is presumed if the debtor's aggregate current monthly income over 5 years, net of certain statutorily allowed expenses, is more than (i) $10,000, or (ii) 25% of the debtor's nonpriority unsecured debt, as long as that amount is at least $6,000. (2) The debtor may rebut a presumption of abuse only by a showing of special circumstances that justify additional expenses or adjustments of current monthly income. Unless the debtor overcomes the presumption of abuse, the case will generally be converted to chapter 13 (with the debtor's consent) or will be dismissed. 11 U.S.C. § 707(b)(1).
Debtors should also be aware that out-of-court agreements with creditors or debt settlement services may provide an alternative to a bankruptcy filing.
What can Bankruptcy do to my Credit?
Both the Bankruptcy Code and the Fair Credit Reporting Act (which regulates what a consumer reporting agency may include in your credit report) are Federal law, so the same rules apply to all states.
A consumer credit report may include information on a Chapter 7 and Chapter 13 bankruptcy for 10 years from the commencement of the case. We have been advised that at least one major consumer credit reporting agency removes information about Chapter 13 after only 7 years although it is not legally required to do so.
Most other credit information may be reported for 7 years, except for civil suits, civil judgments, and arrest records can be reported for at least seven years, but may be reported longer if the governing statute of limitations is longer. For example, in Arizona, a court judgment is effective for 5 years. However, it may be renewed at the end of that time for another 5 year period, and again after that period. As a result, a renewed civil judgment could be reported for as long as it is effective.
Bankruptcy is on the Rise.
Total bankruptcy filings in the United States increased 31 percent in 2008 over calendar year 2007, according to data released today from the Administrative Office of the U.S. Courts (AOUSC). Bankruptcy filings totaled 1,117,771 for the 12-month period ending Dec. 31, 2008, a significant increase over the previous year's total of 850,912. The 2008 filing total marks the first year since the implementation of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA) that bankruptcies have surpassed 1 million.
Bankruptcy filings will reach 1.4 million or even more this year, especially if Congress changes the law to permit homeowners to modify home mortgages via chapter 13.
The 1,074,225 consumer filings during the 2008 calendar year represented a 31 percent increase over the 822,590 recorded during the same period in 2007. The 714,389 consumer chapter 7 filings during the 12-month period ending Dec. 31, 2008, comprised 67 percent of the total consumer filings for the 2008 calendar year, up from 61 percent the previous year. The consumer chapter 7 total for 2008 represented a 43 percent increase over the 500,613 consumer chapter 7 filings during 2007.
Top States with Bankruptcy Filings
Tennessee - The total number of bankruptcy filings rose to 42,893, an increase of 18.6 percent compared with 2007. The eastern district (Tri-Cities region) was up 30.8% from last year. Some expert argue the methods use to tabulate the numbers might be some of the cause. To quote, "there's no clear reason why the state has persistently led the nation in bankruptcy filings...the bulk of those were for Chapter 13, a court filing under which a person's debts are restructured...Tennesseans repay about $160 million to creditors, out of about $6 billion paid annually in the U.S."
Nevada #2 in the nation. Foreclosures are high, Casinos file for bankruptcy and the State continues to lose people. As a consumer, you can file for bankruptcy in Nevada under either:
- Chapter 7 (Straight Bankruptcy) to wipe out all debts except those listed and get an immediate fresh start or
- Chapter 13 (Wage Earner Bankruptcy) to set up a repayment plan to pay back your debts over several years' time.
Georgia The already busy bankruptcy courts in Georgia had even more filings as the mortgage meltdown and job losses sent consumers to the courts looking for relief because of heavy debt loads. Bankruptcies went up 23 percent in the first quarter of 2008, compared to the second quarter of 2007. Georgia is third in the nation for filing bankruptcies, behind Nevada and Tennessee.
Alabama For Alabama, for cases filed after February 1,2008, the median income for a single wage earner is $36,192; for a family of two, it is $44,918; for three, $51,103; and for four, $62,015. Add $6,900 for each individual in excess of 4.
Indiana Bankruptcy in Indian has continued to increase every single year. Although the bankruptcy rate has dropped from the following years, we have now seen a steady upward movement in the recent years.
Michigan If your monthly income and expenses are more than what is the average for Michigan employee earners you can't file for chapter 7 bankruptcy. Instead you will be able to apply for chapter 13.
In the Michigan bankruptcy law chapter 13 allows you to keep all pf your assets and property. You can pay off your creditors using the wages that you have left from your monthly expenses.
Ohio Filing for bankruptcy in Ohio does not cancel all of your debts. You may be required to pay the following: Alimony & Child Support, Taxes, Student Loans, Purchases of luxury items within 90 days of filing, Fines owed to federal or Ohio government agencies, Debts accrued as a result of fraudulent activity, Recent Cash Advances .
Kentucky Kentucky Bankruptcy Exemptions This list of exemptions updated January 2009. All law references are to Kentucky Revised Statutes unless otherwise noted.
Federal bankruptcy exemptions are not available in Kentucky.
Homestead Real or personal property used as a family residence up to $5,000. Sale proceeds are also exempt. (427.060)
Insurance- Annuity contract proceeds up to $350 per month (304.14-330)
Fraternal benefit society benefits; casualty insurance or cooperative life benefits (427.110)
Group life insurance proceeds. (304.14-320)
Arkansas Bankruptcy Laws - Arkansas WAGE GARNISHMENT EXEMPTION $500 head of family; $200 if single. Since federal law offers better exemption, it applies:
MAXIMUM INTEREST RATE
Legal: 6% or 5 points above the federal discount rate
Judgment: Contract rate or 10% per annum, whichever is greater
STATUTE OF LIMITATIONS ON ENFORCEMENT
Open Account (credit card): 3 years
Written Contract: 5 years
Sale of Goods: 4 years
Domestic Judgment: 10 years (judgment is renewable)
Foreign Judgment: 10 years
Illinois
Federal Offsets:
Debts owed to the federal government may be dischargeable;
Income taxes may be dischargeable if return has been filed and tax liability is at least 3 years old. Example: Bankruptcy filed July 27, 2002, taxes owed for 1998 are dischargeable if no extensions to file were granted;
Non tax debts are dischargeable unless they would be nondischargeable on generally applicable grounds, such as fraud or theft.
Do not file for Bankruptcy; we are your Alternative to Bankruptcy. We work with you and for you. With our debt settlement program you will be on the ROAD TO DEBT FREEDOM. Contact one of our Debt Settlement Specialist Today.

[http://www.1debtres.com]

How to Get Out of Credit Card Debt - 10 Easy Steps to Get Out of Credit Card Debt Fast!

I speak from bitter experience when I write this article, as I had to claw my way out to get out of card debt in the past. What I want to make clear is that it does not matter how much you have to repay, you must realise that there is a way to get out of serious, out of control debt. With a easy step by step process, I will show you how to negotiate credit debt and consolidate charge card debts, so that you will see clear progress. This is how I did it, and if it works for me it can work for you! I've broken it down into steps so it's easy to follow.
Settle Debt - The Current Reality
Before you start the process to get out of debt, and attempt to settle credit card debts, it's important to understand how it all happened, so you don't get pushed straight back into debt again! During the period of low credit card and loan rates, most of us started using debt to consume stuff as it was cheap and easy. Many of us even bought investments which we thought would go up in value, and that helped to push us into debt. Now we're stuck and need to get out of credit card debt and desperately need to settle credit card debt.
The Cure to Get Out of Debt Slavery & How to SUPERCHARGE your debt repayments!
Step 1
Mindset change Needed to Get Out of Card Debt
First of all, you have to change your mind set. there is no point getting out of debt just to get back in again, so you are going to have to change the way you do things!
The Golden Rules to Get Out Of Card Debt:
1) Do not use debt for things you consume.
2) Use debt only for investing in assets that genuinely produce an income.
I say that again: Do not use debt for things you consume. Use debt only for investing in assets that genuinely produce an income.
You need to stop living on debt money and start living on income money, other wise you'll get back into debt. But how you say, you're in serious debt know and your income is smaller than your monthly commitments and you're desperately trying to settle credit cards debts and getting nowhere. Keep reading - I reveal how here.
The reason you got into debt is you spent more than you earned, so you need to change that, by either earning more or spending less or both. I've written a special section on how to SUPERCHARGE your debt repayment, to kill it in LESS TIME. More on that under supercharge your debt busting.
Step 2
Cut your cards through, but don't cut them into pieces, you're going to need the details when calling the companies.
Step 3
Before anything else, open a spreadsheet and list all the debts you have, name of the card and with which bank. Next to that list the interest rate and how much you pay them monthly.
If you don't know the interest rate call up the bank and find out. Arrange them from highest rate to lowest rate, in priority repayment order you could say, and list your credit limit and the outstanding balance. Also list what you spend for your monthly budget on rent, food, utilities, etc You need to know this to budget. The reason you're doing this is to get in control of exactly where you stand. If you've done this and your budget shows you that your cashflow leaves something over each month, then that's a good place to be in.
If your budget shows that you are short every month, then you need to work on reducing your monthly outgoings and/or increase your income. But that will be dealt with in another article.
Step 4
Add all you credit card and loan monthly payment amounts up and all your monthly budget amounts up. Take your income and minus the amount. If you have nothing left after this or the figure is negative, you need to do 2 things. You need to access more income, you need to reduce the amount you spend without reducing your quality of life. Yes this is completely possible, I show you how to reduce spend not quality here. See SUPERCHARGE your debt repayments.
Step 5
Call all your credit card companies but don't use their premium rate numbers! If you're in the United Kingdom, look at saynoto0870 for landline numbers. Call your card companies, and tell them you have been a loyal customer for x number of years and ask them politely "how much of a debt reduction you can offer me".
Use those words; don't say "can you" don't allow them to say no, phrase it in a way they can easily say yes to! This is how you negotiate credit card debt, you check whether they can offer you a reduced rate on your existing debt. If they ask if you're in financial difficulties, tell them no, but that you're streamlining your financial accounts and tidying up.
Step 6
Do a credit check on yourself. This is a vital step to get out of credit card debt, so that you can see exactly where you stand financially, and to see what information is being held. Take one of those free credit checks or free credit reports. Just remember to set up a reminder to yourself to email you from your gmail/hotmail calendar, in order to cancel it before the free period ends. You can always to do this again in 3 months time with another company to get an update. Read the small print! If you're in the UK, checkmyfile is great.
If you're missing payments and are actually fall short on what you need for your monthly cashflow, then you need to set the direct debit payments to the minimum. If you have something over each month, then you're already in a better position to get out of debt.
Step 7
In order to consolidate credit card debts, apply for 0% credit cards that allow you to do balance transfers. Check which ones have the longest period and smallest balance transfer fee. See my article on magic tricks with credit cards for more information on this process.
Transfer as much debt as possible to the credit card that has the lowest interest rate, or get a personal loan from a bank at a lower rate to consolidate credit card debt. Work out how much the repayments are going to be and make sure you include it in your budget. Budget how much you can afford to repay. Set all the credit card repayments onto the minimum amount. Then if you have extra cashflow each month, because of the reduced interest, start to overpay the cards.
Now, there are 2 ways you can do this. You can choose to target the highest rate card first, or the one with the smallest outstanding balance. It all depends on which strategy will give you the biggest feeling of control once you've paid it off. For me fortunately the smaller were at the highest rates so I just started overpaying those. Set up a seperate automatic payment from your bank account, to make this overpayment easy. It doesn't matter if it's just £1 extra a month, it is still helping you get out of credit card debt.
Step 8
Once you've paid off a card, use that extra cashflow to overpay the debt you have left. You see you are making progress and the repayment system is becoming more powerful and beginning to get you out of credit card debt. So add the monthly cashflow which you had used to repay the first card, on the next credit card, to speed up your process to settle credit card debts.
Step 9
Once you settle the next credit card, combine payment amounts again and keep going. Continue until all your cards and other debts are paid off.Check your credit record each month. You'll notice how it improves, and then you will be able to borrow more 0% or lower rates, and you'll be able to consolidate again, so you have even more cashflow. Checkmyfile file updates on the 3rd of each month, so you'll be able to see the change from month to month.
How to Supercharge your Debt Busting Strategy:
Now you need to face reality. To become financially free you need to change a couple things. You have no choice. Think about what it'll be like to be debt free and having your salary to keep every month.
Step 10
Super charge you debt - Kill your Debts Super Quick
If you really want to settle credit card debts quickly and seriously want to get out of credit card debt fast, you need to also earn more. If you're already working, you can start various on-line income streams to bring in another income. It's easier than you think! That will help you to start living from money you have, not money you don't have; which is bad debt. By earning extra cash, you can use this income to live on so you don't go back into debt. Or better yet, use this extra money to pay back you debt quicker, by increasing your repayments to settle your credit card debts quicker.
Everytime you want something you can't afford. Think, don't go into debt, start a business and use profits to buy what you really need.
Do you Want To Get Paid While You Watch TV?
There are many ways to earn extra cash, but I have found a very consistent income completing short consumer polls and surveys, while watching TV or DVDs or chatting to friends on the phone. I could not believe that I was actually getting paid for time I was already using!
The great thing with paid market research is that the cash is a constant stream, reliable and regular, so I was able to use the cash to pay off chunks of debt I owed and slowly worked my way out of debt. The vouchers I received where used to replace my usual grocery spend and I just pocketed the cash. I've found I earn a consistent amount of cash each month this way and it's a very efficient use of time.

DISCOVER TOPS SECRET WAYS TO CUT CREDIT CARD DEBT WITHOUT PAYING MORE
Now that you've learnt How to Pay Off Your Card Debts, Discover How to Earn Money With No Money!

Article Source: http://EzineArticles.com/4144727

Negotiating, Eliminating and Settling Your Credit Card Deb

I've talked to people who didn't believe that the credit card companies would actually settle for less than they were owed. But the fact is that if you haven't paid your bill in a few months, it is likely that they will offer you a settlement without you doing anything.
If your debt is no longer with the original creditor, and has been sent to a collection agency, you will have to deal with them. I have actually gotten better deals from some collection agencies than from the original creditor.
There is no need to panic about the first collection notice you receive. I don't want to imply that there are no consequences, but the process is fairly slow. The collection agency wants you to pay. They have no interest in you declaring bankruptcy. If that happens, nobody wins.
If they win a judgment in court, they can levy your wages, or hire the sheriff to get your property. This is unlikely. I don't want to say it wont happen, because it can. Usually, the expense is to great and they are more likely to sell the debt on the open market to another collector who will again try to collect. These companies buy old debt on the secondary market where debt is traded much like secondary mortgages.
When debt becomes overwhelming, and the word "bankruptcy" starts going through your mind, don't let it get to you. Collection agencies love to tell tall tales of gloom, about taking your pay check or your property. What they sometimes don't tell you (unlawfully) is that they can do none of these things until after they get a judgment against you in court.
Since most consumers don't know this, they turn unnecessarily to bankruptcy. Bankruptcy may become an option at some point, but there are plenty of other choices for dealing with debt before it gets to that.
Make sure you have taken advantage of all of the other options available to you for settling your debt before you go through the financial ruin of a bankruptcy.
The first step in the settlement process is to try "debt validation". Don t attempt to settle a debt until you have checked the statute of limitations.
If the debt is older than the statute of limitations, then the collector is wasting their time and yours. Usually after 7 years negative marks will disappear from your credit report.
We do need to be clear about something. The creditor can still go to court and get a judgment even after the past due debt no longer shows on your credit report. If it has been over 7 years, and the debt has been removed from your credit bureau report but the statute of limitations is 10 years - you are still liable for the debt!
If however, the debt is off of your credit report, and the statute of limitations has passed, it can no longer be collected. You don't have to worry about it any more.
If you know that the statute of limitations has not passed, then validation is a waste of time. You can move immediately to making arrangements to settle the debt.
The collection agency is assigned the debt by the original creditor. Their job is to use any legal means to get you to pay. These may be companies who have purchased the debt, sometimes called junk debt buyers. They may also be attorneys who attempt to collect either by calling, or sending you a letter.
Don't panic just because you receive a letter from an attorney. They have to go through the same court process as any other collector before they can do any type of enforced collection.
Some debts are easier to settle than others.
Unsecured debts include things like store cards, gas cards, medical bills, master card, visa, amex, etc. These are generally pretty easy to settle.
You cannot settle secured debts! You have promised an actual asset as security for the loan. If you default, or cannot make your payments, you have already promised to give back the property. Repossession is used for personal property such as automobiles, and foreclosure is used for real property.
You can get a creditor to make a good deal. In the negotiation, you have the advantage. You have what the creditor wants. They will drive a hard bargain. They will tell you no. Stand firm, and make a good deal. Be professional, be courteous. Let them know that you know what your rights are, and what they can and cannot do.
Correspond with them by mail. You will want to have ALL they paperwork so you can validate your efforts. This means saving not only the letter, but the envelopes with the postmark. When you send mail to them, send it certified mail with a return receipt.
One rule is, if it wasn't written, it wasn't done. If I were to ask you to prove that you sent a particular piece of mail to the creditor, you you be able to produce proof? They agency will almost always take substantially less than what is owed.
How much should you offer? They amount that companies receive for old debt is quite literally a few cents per dollar. The amounts that they pay depend on the age of the debt.
If the debt has been charged off recently, the company may have paid only six or seven cents on the dollar. If the debt has been cycled through a couple of different agencies in an attempt to collect, they may have paid less than 2 or 3 cents on the dollar. If the account is several years old, and is out of statute, they are basically worthless, and may have been sold for one cent or less.
Knowing this, start your offer at 25% or less. If you have an old credit card balance of $1000.00, the collection agency has probably paid at the most $70.00 for the debt (seven cents on the dollar). If you only offer them $250.00, they still make a profit of $180.00. The original creditor gets nothing because they have already sold the debt. So this money is all profit to the collections.
Remember the rule - if it wasn't written, it wasn't done. Keeping this in mind, never, and I mean NEVER, talk to a collection agency on the phone.
Make sure you have all terms in writing before you send anyone any money. A creditor will almost never live up to a verbal agreement. You need to have written documentation of all agreements, and even then you can expect a fight. Good records make or break a settlement.
Keep a copy of every letter you send. Its important to remember that you may not only need to verify what they collector told you, but also what you sent to them.
If you do call a collection agency, my first question is WHY? My second question is are you keeping a log book of the calls, the time, the date, and first and last name of the person you spoke to, their employee number if they have one, and a general record of the topic discussed including any promises made. You can also go to Radio Shack and by a telephone recorder. Keep in mind it is illegal to record a conversation without notifying the other party that the call is being recorded. But when they tell you that "the call is being recorded for quality assurance" it is kind of fun to tell them thats OK, because you are recording them also.
Make sure you know the amount of the debt. Agencies will sometimes add charges that don't actually exist to a debt, basically because they just want to make more money. I understand the motivation to make more money, but this practice is illegal. If your original debt was $2000.00 and its less than 5 years old and has somehow become $10,000, then you know there is some serious padding going on. Most companies will waive the fees.
You generally have a lot of time. As the debt gets older, the daily calls will stop, and as the debt remains uncollected your chances for a good settlement increase. Just because the debt has become inactive from a collection standpoint, doesn't mean that they won't try other means to collect. Don't think that they have forgotten about it. They may consider the debt to be a loss and take the tax write off, or may forget about it for a few months and then pursue a judgment.
Don't be in a hurry to settle. Take lots of time to reach an agreement. If your trying to settle the debt for a specific reason, its none of their business. Don't be "friendly". Be polite and professional. But no matter how nice these people seem, they are not your friends, they are not there to help you, they are there for one reason - to collect the debt. And anything you say will be used for that purpose.
If you tell them that you need to settle so you can buy a new car, you can basically forget a decent settlement.
Let them deal. Don't accept the first offer they make.
Sometimes you will be contacted by a second collection agency attempting to collect the same debt, at the same time. Negotiate with both, and take the best deal.
You should use the threat of bankruptcy. It is in your best interest to let the collector think that you have no money, and that you are on the precipice of bankruptcy. Make the collector think that this is their last chance to make an arrangement for payment.
Thats its for today. Thats a lot of information. Over the last three days we have covered what a collector can do, what they cant, and some strategies for negotiating your debts and paying a lower about. Negotiating your debt can save you literally thousands of dollars.
I constantly stress that while you can certainly settle your debt on your own, it is sometimes best to get a professional to handle a this for you. You know your situation and your comfort level. Whatever you choose to do, get started today. And begin living a debt free life.

Ted Batron is a financial expert who specializes in debt counseling and custom debt elimination plans. He has developed a short eCourse that's a great primer for those who are want to learn how to negotiate, eliminate and settle credit card debt at a 30-70% discount and become debt free. If you would like to know more about Ted Batrons "5 Debt Settlement Secrets You Should Know" eCourse,

Are You in Debt - This Article Will Change Your Life For Ever

Within just a few weeks it will transform your life; No more stress or sleepless nights, you will be happy and life will be fun again.

This is NOT a get rich scheme (SORRY THERE IS NO MAGIC FORMULA).

(STOP NOW- do not use credit to finance your lifestyle, no more loans no more credit cards. (You are going to be a cash only person) stop giving away you hard earn money, once you are clear of debt and turned the corner you can then re-focus on becoming wealthy. The facts are you have NO option you MUST clear your debts, if you fail the consequents are Foreclosure on your home, your car reclaimed by the HP Company, court orders, bankruptcy.)(SORRY but that is the hard truth).

Quote from the course:

Nevertheless, that will NOT happen to you because you are going to implement the recovery plan that we will set out for you.

Are you in Debt? we receive many e-mails asking if an internet, e-commerce business can transform debt into wealth. We cannot promise that, to start any business takes commitment, you must be focused and have a business plan, set key objectives. You also need to have time to develop your new business.

If you are in Debt, you are often under pressure from your creditors, stressed. First consider you priorities:-

- Would you like to pay off your mortgage?
- Would you like to pay off your bank overdraft,loans and credit cards?
- Follow our plan, clear your debts, and become financially independent. (THEN you can move to the next level how to become wealthy).
- You cannot wish to pay off your debts; you need the commitment and the WILL to make it happen, which will require changes to the way you control your money and your spending habits.

Create a new future, turn debt into wealth:
Course content:
1. Step one make the commitment.
2. Actions that will move your bank account into the black.
3. Golden rules to success
4. Review your current financial status.
5. Were you ever taught how control your money?
6. Money makes money, your key objective to get debt free.
7. Why do we fall into the credit card trap?
8. Those cards must go. (High interest crazy)
9. You must operate on a cash only basis. ( you will quickly see the benefits, it is amazing the extra money it creates)
10. HP the monthly payments that cause you worry and stress.
11. Now you have the mind set to pay off ALL your debts.
12. Manage your spending. (Impulse buying will blow your plan right out of the water)
13. Being in debt can be due to bad luck; however, it is far more likely to be our own fault, failing to manage our finance.
The Golden rule, NEVER spend above your means, which includes loans credit cards, over spending on luxuries, cars, holidays, entertainment, drinking, smoking.
Evaluate you current spending habits, YOUR OBJECTIVE to clear all debts, have money in the bank, plan to make money and ensure a new future. Eliminate stress, worry, and depression. Freedom happiness and wealth is NOT just a dream. YOU CAN DO and YOU MUST DO IT. (Develop that mind set believe in yourself, do it for your family and for your well being and health).
We have set the scenario, now we take one-step at a time and make it happen.
Above all, you must be honest, with your personal assessments; you must also be realistic, DO not set impossible goals.
Step one make the commitment
You are about to take the most important step to clearing your debts and achieving personal wealth.
1. I am totally committed to following the advice in this manual, I will make changes in attitude and the way I manage my money, necessary to achieve my main objective build a debt free and wealthy future.
2. In order to plan your systematic recovery and transform debt into wealth we need to put our cards on the table, hide nothing, be honest and complete the following questionnaire.
Please complete the following questionnaire.
It will provide the status of your current financial position. (sorry in this format the table forms do not work, it is better if you are working with the correct forms/ tables ( read on once you are committed to giving it your best shot. you can go to our web page and see the FREE course complete with forms)
No Answer the following questions (Truth only) Yes or No YES NO
1 Do you carry you credit card balance over each month
2 Do you have more than three credit cards that on the upper limit
3 Do you ever use one credit card to pay debts or pay off other cards
4 Do you only pay the minimum payment on credit cards each month,
5 Have you reach your maxim limits on all your cards
6 Are you are struggling to even make the minimum payments
7 Do you have more than 10 years to pay on your mortgage
8 Do you have your car on a finance agreement
9 Have you taken out a second mortgage to pay off debts
10 Are you planning to buy a new car
11 Do you have personal loans, bank over drafts
12 Do you have store cards to purchase goods
13 Are you living beyond your means, struggling every month
14 Have you ever had your services turned off for non payment
15 Is the stress and worry causing health problems
16 Is the debt having an impact on your family relationships
17 Have you tried to find ways of earning more money
18 Are you under extreme pressure from your creditors
19 Are you considering bankruptcy
20 Are you in trouble with the bank or mortgage society
Now we face the decisive moment.
Total all the "YES" numbers
If you scored, 4-0
Not too much to worry about we can soon have you on the way the wealth and happiness.
If you scored, 8-5
You need to review your spending and focus on your options to make money.
If you scored, 13-9
You are managing to pay your way; you earn the money then have to pay it to your creditors (high interest). You need to concentrate on reducing your debts by controlling you excessive spending. Implement our debt payment scheme so you have spare money to invest, use you income and spare money to generate wealth.
If you scored, 17-14
You are on the ragged edge, struggling to pay your way, urgent action is required to stem to flow of outgoing money, consider every penny you spend do you really need to buy new clothes or have that expensive evening out. Focus on channeling the money saved to pay off debits, review the debts that are costing you high interest and pay them off. Once you see the benefits, your recovery will gain momentum.
IF you are 20-18
You are clearly deep in debt, you must be unhappy worried and stressed which will effect your well being and health.
We will help you get back on track, however it will take commitment by you and all the members of your family and you need to cut your spending. Put a plan into place to pay off the most pressing debts. NOW you need the WILL to implement the advice we will give you. (Think new future better life no worries or stress, security) Make this commitment get out of debt, to change your spending habits. This is the hard task. Do that and then you can look forward to a new future?
Learn from my mistakes:
Speaking from experience, I went to university attained a MBA you would think that I have developed the self-control to monitor my spending and invest my money wisely. NO! I did not I was spending more money than I was earning clothes, cars, holidays, living on my credit cards for a few years I had a high old life.
For nearly three years, I continue to impulse buy. Then I started robbing Peter to Pay Paul using one credit card to pay of another, transferring balances, taking out loans. WOW, I had spiraled deep into debt. Under pressure from all the creditors, could not sleep, each month all my salary already committed to creditors, outgoing much higher than my income.
OK it was my fault silly middle class girl who over spent. Why was I such a fool? Well we all want material things. We associate fast cars, designer clothes, with happiness. And fall into the trap of the media and the advertisers, to the offers of credit cards and loans.
I cannot recall any of my family or tutors teaching me the importance of being in control of financial affairs.
Now there are hundreds of ways in which we can fall into debt, I was a miss - guided fool. With many, it is bad luck, ill health, out of work, family problems. They wanted the best for their children.
The objective is to review the status, then formulate a plan transform debt into wealth.
1. Control Spending and credit management.
2. What to do with our salary (Money in / Money out)
3. Make changes, plan a new financial life.
4. Learn how to invest money, or develop a business.
5. Consider the future, pensions and retirement.
First, we will talk about the positive aspects of life and future. We all dream of winning the lottery, becoming millionaires over night. (It will not happen) The fact is if you do spend £10 per week on the lottery or the football pools. That is £520 pounds a year, invested weekly with compounding interest at 8% would provide you a substantial amount of money by the time you are 65 years old - depending on the number of years. On average for most people it would be well over £500,000.
Most of us will earn well over a million pounds in our life time, for example if you earn £30,000 for 40 years that is £1,200,000.
However, the sad fact is most people have no idea how to save or invest money, they give all they earn to banks, credit cards, loans, and high interest is hard-earned money lost forever. (Crazy but true).
If you are living on credit than you are giving away a high percentage of your money, money that, you could be investing and being paid interest.
STOP NOW- do not use credit to finance your lifestyle, no more loans no more credit cards. (You are going to be a cash only person) stop giving away you hard earn money, once you are clear of debt and turned the corner you can then re-focus on becoming wealth.
The facts are you have NO option you MUST clear your debts, if you fail the consequents are Foreclosure on your home, your car reclaimed by the HP Company, court orders, bankruptcy. (SORRY but that is the hard truth).
Nevertheless, that will NOT happen to you because you are going to implement the recovery plan that we will set out for you.
We now need to first motivate you, set key objectives and realistic goals.
We all have different life styles, often based on the salary we earn.
The rule the higher you fly the harder you fall. Applies:
If you live in a large expensive house, you will have much higher mortgage repayments. Top of the range BMW, you impress no one every one knows you are living on credit.
Therefore, before you try to impress with a new swimming pool or ponies and motor bikes for the children, stop and think can we afford to do this, would we be better to wait and pay cash. (Of course you would you know it makes sense).
If you are the average person, living in a three-bed semi, with a second hand car, and are a hourly paid worker, maybe in a factory or in the construction industry, the same philosophy applies. Yes it would be nice to impress your family and friends with a tan from a expensive holiday or a top of the range car, believe me they will only be impressed the first time they see it. You will be the one faced with 3 years of HP repayments, higher insurance, and the cost of fuel.
OK I know what you are thinking every one has a mortgage has credit cards and debits, Stop because you are having negative thoughts, NO it is not OK to be in debt, it complete madness and will never make you happy it will only bring you worry and stress..
Therefore, no matter what your station in life is the same principles will apply.
We are taking time to outline the reasons most of us find ourselves in debt, because if you can not accept there is a problem you cannot take the actions required to eliminate the problem (In this case debt).
We could show many examples of credit cards. They make it so easy, you always spend three times more than, if you were buying cash. Then the situation gets even worst, let us assume you have four credit cards, average interest 16.9% they have a combined outstanding balance of £5,200. If you only pay the minimum monthly payment = to 3% of the outstanding balance it will take you 20 years to pay those cards off and your payment would total £9,720 - work it out you have paid them £4,520 interest.
You know in your heart that you get a much better deal paying cash, often a lower price and you pay NO interest.
OK we never promised a magic over night formula, we did promise the plan that WILL take you from debt to being wealthy.
Key Objectives:
o STOP ---using credit NO loans or credit cards, now you are 100% cash. Think before you spend, do not buy until you have spare cash.
o This is NOT an option, if you are at present deep in debt, you will realized, the high life is over. You will be receiving legal letters. If you do not stop using credit, then you will reach a point where that decision will not be yours. Because once you are exceeding the limit on your cards and fail to make the payments, the credit card companies will put you on stop, and immediately inform the credit agencies. Then you are really in trouble, all the other loan companies credit cards will follow suit quickly. Your bank will also withdraw your over draft facility and monitor you account as high risk.
o Cut up those credit cards. Use only cash, and only when you have spare cash, you need every penny to pay off your debts. You must learn to live a cash based life style.
o Pay off ALL your debts including mortgage, ( we will tell you how to do that in the shortest possible time)
o Learn to invest ALL spare money wisely, your main objective will be to generate wealth,
o Phase 1 set aside money in your emergency saving fund.
o Phase 2 Focus on building long-term retirement wealth, we will guide you to save investment that will generate income without the need for you to work. (You will have financial freedom) Enjoy life travel, play golf, go fishing. Have fun been happy.
o Now in the first few years you are going to throttle back, drop out of the fast lane, no more living on credit and accumulating debts that will eventually bring you crashing down, maybe cost you every thing house, car, family. (That would be devastating)
o Work hard for real freedom and independence; soon you will be the one being in charge in complete control of your own destiny.
o Simple rules, cash only, no loans, no more monthly HP agreements.
o Your family and children will need to understand that from now on all spare money will go to pay off debts. ( Hard to say no to a tearful little girl who wants a new play station game) Still a lot better than telling a teenage daughter, we are going to lose the house because we have not paid the mortgage.
o OK this is not rocket science; it is just plain common sense. You can dream and it is important to have the vision that in 5 years you can be completely debt Free.
The plan:
Prioritize your debts, (we will provide the formula).
List All your creditors ( Debt is money you owe and are legally committed to repay) (Expenses = Money you pay out each month for Gas, Electricity, food, petrol, take items that you pay every year for example car insurance, and divide by 12).
First, clearly understand how much you actually owe, what rate of interest you are paying.
Complete the following work sheets designed to help you and your family to understand where the money going. Invite innovated think and ideas as to how you could save money.
(A) Monthly Living Expenses
Living Expenses Actually cost Saving
Rent
Council Charges
Electricity -
Gas
Telephone / internet
Water Rates
TV company ( Sky)
Food (total for every thing)
Entertainment.
Children Pocket money
Car expenses
Car 1 petrol (only)
Car 2 petrol (only)
Maintenance
Road fund Tax
Insurances
Home insurances
Medical Care
Children's Education Expenses Books Tuition etc
Clothing and Miscellaneous
Other expense
Total
(B) Major Purchases - over 12 months divided by 12
Holidays
Car purchase
Major House improvements
New Furniture
New Kitchen equipment
Garden plants tools
Gym or Golf club fees
Season tickets
Recreation expenses
Miscellaneous expenses
Cash spent ATM etc
Total C/f to summary
(C) Debt payments
Name of Debt Total
Balance Monthly Payment % interest Full amount or min
Mortgage
Second Mortgage
Car Loan 1
Car loan 2
Bank Loan
Over draft
Credit Card 1
Credit Card 2
Credit Card 3
Credit Card 4
Other debts
Total C/f to Summary
(D) Monthly Income
Monthly take home salary
Second income
Benefits DHSS
Pensions
Part time job
Internet income
Total C/F to Summary
Totals carry forward
Personal Financial Statement - SUMMARY the points of reckoning, you now need to insert you figures.
E.g., total income - total Living expenses- total debt payments.
Which we hope will give you a positive result, e.g. more income than outgoings? Referred to as disposable income a true measure of your current capacity to decrease you debts and increase your wealth. Taking these initial steps should have provided you with the base information to empower you and your family to focus your efforts and give you the means to measure your progress.
It is important that you share this information with your family.
Depending on the result of Income (- outgoings) your objective will be to ensure that you have a minimum of 10% of your total income as disposable income, that is the money you are going to use to clear your debts in order of priority.
It will depend on your original check on status if you were in the 18-20 range then the figures may indicate that you have debts and expenses that exceed you present income.
If this is the case, you have NO option: You must cut your spending. All luxuries, none essential expenditure, holidays, two cars, smoking, drinking, golf club, gym, entertaining, clothes, furniture, children games, garden plants flowers. In place of golf the gym going to the pub, find spare time work earn more money.
If you DO NOT TAKE THESE ACTIONS NOW, you WILL lose your home, you will face bankruptcy. This is the hard line truth.
Total income
Total Living Expenses=
Debt Payments
D - Total of AB&C =
Disposable Income
Right now your head will be spinning, you were expecting an easy way out, there is no easy way out it takes total commitment.
We did warn you TOTAL commitment.
NO MORE CREDIT CARD spending
NO MORE LOANS
NO MORE impulse spending
NO MORE Holidays (Until you are clear of debt)
You are now on the road to recovery, you are going to transform you debt into wealth.
You first step was to create disposable income = Income minus outgoings.
Your starting point should be 10% your monthly gross income.
Write down each debt in the first column 1, total balance in column 2 the minimum payment in column 3, then you divide the total balance by the monthly payment, insert the answer in column 4.
Next, you need to prioritize your debts in column 5 Start with the lowest division answer in column 4 until they are numbered.
Column 6 that is where you start to see the benefit, to show the debts as they are cleared (Paid off).
To know how many payments to pay off: You divide column 2 by column 6 = the number of months in column 7.
First you use your disposable income to increase the payments on debt 1, what will quickly clear that debt, at which point you now have even more disposable money all off which you use to accelerate the payment of debt 2, as each debt is paid you roll it over to really accelerate the payment on the next debt. Once you pay all debts off, then you have ALL of the disposable income to invest. Now you have gone from debt to building wealth.
Invest wisely NEVER go back to credit cards or loans only live on a cash basis. Moreover, plan for retirement.
Name of Debt Total
Balance Monthly
payments Division
Answer Pay off
Priority Additional monthly payments Months to pay off
Column 2 = total debt £------------------------
Column 3 = Total Monthly payments £------------------------
We trust that you can see the philosophy, and the benefits of using ALL your disposable money E.G. Income minus outgoings to accelerate repayment of your debts, then the amazing acceleration that takes place as each debt is written off you have extra money to pay of the next debt ( In order of priority).
This is a WIN -WIN situation, once you see it actually working and no more creditors chasing for money, do not relax maintain total commitment this is not just about clearing your debts this is about a new life, (CASH ONLY).
In just a few years, you will be in a position to create wealth for you and your family. You will have taught your children how to manage money, never to worry about you future again.
Now you will really have the respect of your piers, friends and family. You will own every thing the house, cars. Take that five star holiday all paid up front CASH.
I wish you good fortune;
If you need further help or would like the Excel forms to monitor and record transactions FREE please do not hesitate to contact us.
Your Faithfully
Kenneth Yearsley

(Think new future better life no worries or stress, security) Make this commitment get out of debt, to change your spending habits. This is the hard task. Do that and then you can look forward to a new future?
For nearly three years, I continue to impulse buy. Then I started robbing Peter to Pay Paul using one credit card to pay of another, transferring balances, taking out loans. WOW, I had spiraled deep into debt. Under pressure from all the creditors, could not sleep, each month all my salary already committed to creditors, outgoing much higher than my income.Learn from our mistakes: (It take WILL and commitment, but will change your life for ever) if I can be of any assistant please contact us: (It is free genuine no sign up or sales pitch ) ken@makemoney.us.com