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September 26th, 2009:

Learn How to Avoid Bankruptcy and Become Debt Free

Many events may drive you to bankruptcy. Actually, except in certain situations, bankruptcy is nothing but the result of a buildup of unfortunate financial decision and unexpected events. Nevertheless, there are ways to prevent it and to keep debt at a reasonable level in order to maintain a healthy financial situation. Planning Ahead

Unless you are a fortune-teller, you can not foresee what is going to happen in the future. Therefore, you should start preparing for the unexpected. It may sound pointless but the truth is that if you have enough savings you will be able to avoid getting in debt most of the time.

In order to be prepared for what may happen, you should always make a budget and stick to it as tight as possible. Within the budget you need to include all your income and expenses, including your debt installments and an average of credit card payments.

You should make a plan for reducing your debt progressively. If you can take a low interest loan to pay off your credit card debt, then you should make payments above the minimum in order to keep reducing your debt. You need to always pay at least a little more than the interest charged for financing.

An excellent idea is to leave round numbers in your balance. For example if the overall debt is $2423.15 and the minimum payment is $380.57 then, you can pay exactly $423.15, so the amount you owe would be $2000, which is an amount easy to trace in the budget. Order Your Payments According To Importance

Even though the above idea is useful, you should always pay more than the minimum in your credit card balances. Moreover, you should pay as much as possible since credit cards carry the highest interest rates. First of all you should pay for essential services and expenses. But immediately after that you should try to cancel the highest interest debt.

Though you should check the interest rates charged along with any other costs and fees. The usual priority order according to the interest rate charged is: Payday Loans and Cash Advance Loans, Credit Card Balances, Personal Loans, Car Loans, Home Equity Loans and Mortgage Loans. If feasible, you should try to get rid of the first ones as soon as possible without neglecting paying the others, especially those who are guaranteed by an asset such as mortgage loans and home equity loans. Consolidation Loans

If you can request and get approved for a consolidation loan, the main problem would be solved. You will use the money to cancel high interest debt like payday loans and credit card balances. Afterwards you should avoid incurring into more debt and you should always keep your budget balanced. After Debt Reduction

After you get rid of your debt, or even when you have it under control you need to start putting some money aside in order to save for any unexpected event. This way, you will be able to avoid getting yourself into the vicious circle of debt again. If you ever need to use that money, make sure to rebuild your savings fast as soon as the unexpected event’s consequences have passed.

Devora Witts is a certified loan consultant with several years of experience in the credit area who instructs people regarding credit recovery and approval for personal loans, home loans, consolidation loans, car loans, student loans, unsecured loans and many other types of loans. If you want to understand <a href="http://www.badcreditloanservices.com/bankruptcy.html” rel=”nofollow”>Loans After Bankruptcy and <a href="http://www.badcreditloanservices.com/debt-consolidation.html” rel=”nofollow”>Debt Consolidation thoroughly you can visit her site http://www.badcreditloanservices.com
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Cancelling Holidays and Paying Off Debts. Good Sign or Bad Sign?

If you’re in a hole, stop digging – it’s true of most things, and it’s certainly true of debt. So maybe The Times brought us good news when it announced that 58% of Britons were planning to cut back on their summer holidays, and 19% canceling their summer holiday plans altogether. Maybe it’s encouraging to see people re-prioritising, keeping their money for essential things like rent, food and petrol.
On the other hand, it’s worrying to see so many cutting back on their holidays. Holidays might not be ‘essential’, but many of us see them as an important annual tradition: a reward for a year of hard work and a way to relax and ‘recharge the batteries’ before returning to the realities of bills, debts and work. It’s hard not to wonder how many people aren’t choosing to economize, but cutting back because they simply have no choice.
However you view the statistics, debt isn’t the only reason for these cutbacks. There’s also the credit crunch, the rising cost of living and the weakness of the Pound against the Euro. Cumulatively, these factors are nothing but bad news for people in the tourism industry. And since the travel and tourism industry employs over 120,000 people (according to the Institute of Travel & Tourism), this could well translate into bad news for economy. After the recent massive job losses among home-builders and estate agents, any threat to the travel and tourism industry could easily damage consumer confidence further and reduce the average consumer’s spending power.
On an individual level, of course, the impact could be much more immediate. How many of those 120,000 people are deep in debt – absolutely reliant on their next paycheque just to stay on top of their debt repayments?
It’s a serious problem: many financial experts advise people to set aside at least 3 months’ salary for a rainy day, but how many are able to do that? With record levels of personal debt and escalating cost of living, millions of people are struggling to afford their essential living costs and debt repayments, so saving is simply out of the question.
The ‘silver lining’, the optimists say, is that hardship reminds people of why that safety net is so important. The next time the tough times come around, we promise ourselves, we’ll be ready for them, with our debts paid off and our 3 months’ salary safely in the bank.
Saving, however, is rarely a good idea when there are debts to be paid off. Whatever interest a savings account might accrue, it’s unlikely to be as much as the interest charged on the debts. So for anyone in debt, step one has to be getting out of debt, and the best way of doing that varies from person to person.
Debt management plans, debt consolidation loans / mortgages, Trust Deeds, Individual Voluntary Arrangements, even bankruptcy… Each debt solution comes with its own unique pros and cons, but they do have one thing in common: they all tend to work better when people talk to a debt adviser as soon as they realize they’re in financial trouble. In general, the longer someone leaves it before they look into debt solutions, the harder it’ll be.

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