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Debt Relief

Debt Negotiation Can Equal Debt Reduction And Canceled

Are you faced with an ever increasing amount of personal or business debt with no end in sight?

Bankruptcy is an option but it is not one to be taken lightly. The best option is to first look into some type of debt negotiation to drastically reduce and even cancel some of your debt.

Did you even know there was a process to eliminate your credit card obligation with self-negotiation? Being financially free by using self-negotiation will seem daunting and difficult because it requires that you work through the process. Thankfully, the procedure for financial relief can be simplified by finding someone or some organization to guide you through the process. One step in the process is to contact your creditors and credit card companies to explain that you are facing significant hardship and are unable to pay. You need them to restructure, eliminate or reduce your debt load in order to avoid bankruptcy. This can be done via a certified letter so that you have proof it was sent and received.

Why would they agree to this?

If you are forced to file for bankruptcy you unfortunately will completely liquidate your obligations to them and so they will receive no money at all. It is better for them to settle for 50% or even 30% of the balance that you owe. It is best to provide as much information about your current situation as possible. They need to understand the seriousness of your current situation and that you are not simply trying to get out of your responsibility to repay your debts. Complete elimination of your debts is what many people try to aim for but is usually not possible. The typical reduction is by 50 or 60 percent.

Where can I turn for help?

Debt Canceled and other web sites can provide information and sample letters to use to contact your creditors and begin the process of debt relief that you are looking for.  You will find a number of companies that will try to charge large fees to guide you through the process.  Unfortunately, many of these companies are not very good at what they do.  They can ruin your credit rating and end up adding to your actual debt load with their fees and the additional late fees generated by your creditors.

Who can I trust?

The recent credit crisis has really opened up the floodgates with many new companies trying to profit from the painful debt loads that many individuals and businesses are facing.  It can be overwhelming trying to figure out who you can turn to and who you can trust.

It is important to really do your homework and research the available options.  You want references from people that the company has already helped.  It’s important to actually call and talk to these people and find out specific details good and bad as far as what they went through.  The time to find out that a company is not as good as you had hoped before you sign a contract with them and not after.

Don’t wait until your credit is damaged beyond repair or until you can no longer make even the minimum payments to take action.  Start the debt negotiation process as soon as you realize you’re at a point that your debt is beyond your control.

Is Credit Card Debt Relief Possible?

Credit card debt was an inevitable situation as credit cards became the norm in almost every household; increasingly people are using their cards just to pay for everyday goods. Very few people that can say they owe nothing on them and as a consequence these finance companies are now owed thousands of dollars on most of the cards that have been issued, unfortunately people are only now beginning to realize that the damage has been done. The easiest action to take is to arrange credit card debt relief whilst you are still in a position too.
The first thing to do before opting for financial help is to stop using the card all together because if this doesn’t happen it will be almost impossible to devise a debt relief plan. Once the debtor has decided to do something about the debts incurred they can start looking for a suitable credit card debt relief option. Whilst there are a number of debt consolidation options, the three mentioned below are the most common used for people in similar situations.
Obviously, the easiest way to proceed is to apply for a credit card with a low interest rate on balance transfers where the debt can be consolidated where repayments can be made regularly within a specified budget. If this method is not available then a consolidation loan may be a debt relief answer where a number of debts can be replaced with just one at a lower monthly installment.
This option does require a certain level of commitment on the debtor’s part as once the debts are clear there must be no temptation to use them again. Remember, consolidation by card or loan will only work if the debtor has not already damaged their credit history.
There are times when credit card debt relief is not possible by this route and it is left to negotiation, often by a specialist company. They will normally suggest a sum of around half the debt be paid off with the remaining amount canceled by the creditors.
The last option available to the debtor is to apply for bankruptcy which will clear all the debts and although this may sound inviting it should only be regarded as something done when all else has failed. This is the last resort for a debtor because once they declare bankruptcy, their credit standing fails and it will be difficult to get further loans; however, the positive aspect of filing for bankruptcy is it enables a fresh start. Whichever credit card debt relief option you take, remember that this should only ever be a one-off as important lessons about managing finances should be learnt so the situation is not repeated.

Anthony Dean has helped thousands reduce their credit card debt. Find out how he can help you.
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Credit Card Debt Solutions

Most people have credit card debt for one simple reason: they spend more than they earn. However, there are other reasons why you might have credit card debt, such as a medical emergency, a one-time emergency expense, rising costs, or impulse control. No matter how you got into debt, there’s a solution. Review the situations below to find the right credit card debt solutions for you.

Overspending

If you spend more than you earn, the first step is discovering why. It could be because your mortgage has recently shot up, leaving you with little money for other expenses. It could also be because you make a lot of impulse purchases on your credit card. If you have high fixed costs, you should consider scaling back on luxuries like cable television, movie rentals, and eating out.

If you spend too much because you like to buy stuff, then you need to learn to ask yourself if it’s something you really need. Wait two weeks before making any purchase. Chances are you won’t really want it anymore. Once you control your spending, you’ll have an easier time paying off credit card debt.

Large One-Time Expenses

If you have credit card debt because of a large one-time emergency like car repairs, your first goal is to pay off that bill as quickly as you can by reducing spending in other areas. Once that’s done, use the extra money to build an emergency fund. Tap the fund for true emergencies, like car repairs or emergency room visits, so you don’t have to go into debt again.

Extended Medical Emergency or Illness

If your family is experiencing a major medical emergency or long-term illness, sometimes credit card debt is the only way to get by, especially if the primary earner is the one who is sick. In this case, your best bet is to negotiate with the doctor or hospital to reduce the medical bills. If the bills are more than you can ever reasonably pay, you may have to consider bankruptcy. Medical bills are the reason for 50% of all bankruptcy filings.

Extended Job Loss or Other Financial Hardship

Many people find themselves relying on credit cards to pay basic expenses after they lose their jobs. If you’re one of them, your first step should be to reduce every possible expense. Cancel cable, cut back on clothing and food purchases, don’t take vacations, do whatever it takes to cut your spending. If you have student loans, apply for forbearance. If you have a mortgage, find out if your lender can also extend a temporary forbearance. If you still can’t pay off your credit cards, consider contacting a credit counseling service for help. They’ll review your finances and may recommend a debt management plan, debt negotiation, or bankruptcy.

Once you get back on your feet, dedicate as much money as you can to debt repayment. You should also establish an emergency fund and continue to spend wisely so that you never find yourself deep in debt again.

For more articles visit: http://www.bills.com/credit-card-debt-solutions/

Justin has 5 years of experience as financial adviser; his key areas are consolidation, debt relief, mortgages etc. For more free articles and advice visit http://www.Bills.com.
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Debt Settlement Vs. Debt Consolidation – Which Option Is Better?

Both debt settlement and debt consolidation can reduce and eliminate your debt. But each will have different consequences on your credit score and future financial options. Before choosing either option, educate yourself on the pros and cons of each.The Benefits Of Debt SettlementDebt settlement means that part of your debt is immediately wiped out by your creditor. You will find instant financial relief in your monthly budget. And the rest of your debt payments are much more manageable.You will also find that you can start rebuilding your credit from this point on. Instead of juggling late payments, high debt loads, and other factors, you can focus on managing your credit better.The Downside Of Debt SettlementThere are a few downside to debt settlement. The biggest one is the immediate affect on your credit score. Debt settlement is seen much like a foreclosure; your score will be 500 or lower. And while you can improve your score, for the next two years you will have to work with sub prime lenders.You will also have to deal with the tax implication of a write off. The IRS sees debt settlement like receiving a cash gift or income. Depending on where you live, you may also have to pay additional state taxes.The Benefits Of Debt ConsolidationDebt consolidation can also help you get out of debt. With consolidation, a company negotiates lower rates with your creditors. You make one monthly payment to the debt consolidation company, and they handle paying all your accounts.They also deal with any paperwork hassles, canceling fees, and closing accounts. Usually, you can be out of short term debt in five years or less.The Downside Of Debt ConsolidationDebt consolidation will have less of an impact on your credit score. Most lenders will temporarily put a hold on extending you more credit until they see you are making regular payments. You need to still monitor your accounts to be sure the debt consolidation company is making on time payments.Picking The Right OneThere is no perfect solution for getting out of debt. Debt settlement can help you see an instant improvement in your finances, but at the cost of your credit score. Debt consolidation simplifies the process with minimum affect on your credit, however it does take time.

Poor Credit Debt Consolidation

Too much debt is a common problem that affects millions of consumers across the country. Eliminating debt is not an easy task. Yet, there are many strategies in place to help consumers reduce unnecessary debts and save money. If you have good credit or own a home, there are practical means of reducing debt. Unfortunately, those with lower scores have fewer options.
Easy Way to Reduce and Eliminate Debt
If you do not qualify for a personal debt consolidation loan, and a home equity loan is not feasible, consider using a debt management service to assist with your outstanding debt.
In the past five years, debt management and consolidation companies have become widespread. These agencies advertise their services on commercials and online. There main objective is to help people manage their debt, and outline a realistic solution for eliminating debt.
Types of Debt Management Services
There are two main types of debt management services. Before choosing an agency, it helps to research both alternatives and select the one that’s best for you.
If you have acquired too much debt, a debt consolidation service may be the solution. The primary reason why many consumers are unable to reduce their debts is because of high finance fees and late charges. Debt consolidation agencies recognize the problem, and will work with your creditors to have rates and fees reduced or waived.
Once the creditors and agency reach an agreement, the agency will combine or consolidate all debt into one payment. Payments are made directly to the consolidation service. Because the interest rate is lower, monthly payments are reduced up to 50%.
Debt settlement agencies are different from consolidation services. If consolidating debts, consumers are responsible for repaying the full debt amount. On the other hand, a settlement will cancel out a portion of the outstanding debt. For example, if a person has acquired $60,000 in credit card debt, a debt settlement may reduce the balance owed to $30,000.
Debt settlements are not intended to be an easy fix for extreme credit problems. In fact, the effects of a settlement are damaging. This maneuver will likely result in a lower credit score, and future lenders may be unwilling to extend a line of credit.

Ridding yourself of Bad Debt Without Bankruptcy

Credit card debt creates anxiety and financial chaos. It caused many people trap into serious financial issue since the introduction of credit card. This plastic card create easy and convenient payment scheme for you to buy things without the need to worry about cash inside you wallet; frequently make you over spend your money and create debt.

The situation getting worse with the best feature of credit card, the minimum monthly payment; you no need to pay in full of credit card balance each month, just pay the minimum amount will do; the credit card balance snowballing month by month, when you start to realize that you have financial issue, most probably you already at a bad debt situation. When you are in the debt trap, more efforts and times are needed to get out from there.

The last option for debt free is filing a bankruptcy but before your need to choose this option, consider this five-step program first to rid yourself of bad debt with bankruptcy.

1. The desire to get out of debt

This is the most important part of any debt free program. Lip service is not acceptable because it is going to be hard work on your part. It’s going to require lifestyle changes and breaking of bad spending habits. You must get yourself ready and have an ultimate desire to get out of debt.

2. Assessing just how much debt you have

Before you put in your actions to resolve your debt issue, you need to know how much debt you have and who you owe. The best way is list down all your debts on to a piece of paper or enters your debts into any of personal finance program you use to assist you. Then, break it down further by listing down each interest rate of each credit card you current paying of. The most current information can be found on your card statement.

3. Devise a workable plan

You need a plan that you can live with. Write it down so that you will be more committed to it. You need to stop adding more debts, stop using credit cards. And try to call your creditors and ask if they would be willing to lower their interest rate. Other actions that you can put into your plan are:

* Generate and review your cash flow worksheet so that you know where your money going to come from each month to reduce your credit card debt.

* Things that you willing to change or give up to make the goal of being debt-free happen.

* Explode a few ways to increase your monthly income to cover for your debt payment.

* Assets that you may sell off to cash out to pay for your debts.

Start out with baby steps, paying more than the minimum each month. You can either choose to pay off the card with the higher interest first or choose the one with the lowest balance so that you can eliminate that one quickly.

4. Cancel all your credit card but leave one

This may be painful living without the credit card, but look what having these cards has done to you. Get the scissor out and cut all of them except one so that you will able to use it. Then, call to the credit card companies and call all your credit cards that you have put the scissor on; this is to stop you from asking for a replacement card later.

Now, what do you do with the last card? Carrying it in your wallet makes it too easy to access and use it for impulse purchase. You should keep it in a place where it will take an effort to retrieve it. This last card will only be used for any emergency purpose.

5. Seek for professional help if you just can’t manage it on your own

If you find that you can’t manage your debts at your own, then getting help from debt managing professional should be your option. You can contact the National Foundation for Consumer Credit (NFCC). This is a national network of nonprofit organization that provide consumer education, debt counseling and debt repayment program. Their counselors can help you set up a budget and re-establish credit.

In summary

If you always trap into bad debt situation, bankruptcy filing a fastest step for debt relief but it is not the best option as the impacts will follow you for many years. Always access other alternatives to rid yourself of bad debt without bankruptcy. The above five-step program can be your guide for better option.

Cornie Herring is the Author from http://www.StudyKiosk.com. An informational website on credit basics, debt consolidation & bankruptcy. Learn more about money from our Manage Your Money for Debt Free Life.
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Is There A Way Out From Credit Card Debt?

It was only a matter of time before the number of people experiencing credit card debt would increase; cards have become easier to obtain and more tempting to use, which is a lethal combination. The swipe and spend culture has created massive problems and people are now realizing just how foolish they have been just spending indiscriminately. Once this point has been reached then it only remains for some form of relief from the credit card debt to be arranged.
At this point it is important to start as you mean to go on and stop all spending on the card otherwise it will make arranging a debt relief plan much harder to implement. Making the decision can be the hardest part but no-one said credit card debt relief would be easy. There are various debt consolidation alternatives available but the three most common options are detailed below.
The easiest method of debt consolidation is where the person still has a good credit rating and uses another credit card that has a low rate of interest where all the debts can be transferred to one card. Another method is to arrange a consolidation loan to relieve the debt, then paying just one amount which is easier and within a budget.
This option does require a certain level of commitment on the debtor’s part as once the debts are clear there must be no temptation to use them again. Debt consolidation does require that the debtor is still able to access credit and that they will have sufficient funds to repay the loan.
If credit card debt relief is not available then negotiation remains and this is preferably left to a debt relief company that can deal with the card companies directly and negotiate payment conditions. They will normally suggest a sum of around half the debt be paid off with the remaining amount canceled by the creditors.
If all else fails the debtor is left with bankruptcy to clear the debts but this is not something that should ever be looked upon as the first course of action as there are serious consequences to be considered. The debts may be clear but they will find it hard to get any form of credit for a long time and will have to rebuild their credit history from scratch although it does enable them to have a fresh start. Credit card debt relief should not be something you ever repeat because it will mean you haven’t learnt anything from your experience.

Anthony Dean has helped thousands reduce their credit card debt. Find out how he can help you.
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Debt Consolidation + Refinancing = Debt Relief

Getting debt relief is sometimes too complicated. Even after consolidating your debt through a debt consolidation agency you may end up with monthly payments too difficult to afford that won’t leave space for unexpected expenses. However, by combining Debt Consolidation with Mortgage Refinancing you can achieve debt relief to an unbelievable extent.

The usual means for reducing debt exposure is contacting a consolidation agency or negotiating debt yourself. Debt consolidation implies contacting lenders and agreeing with them new repayment programs with lower monthly payments. This result can be achieved either by reducing the amount of money charged on interests or by extending the repayment schedules.

Debt Consolidation

The procedure is simple enough: Either you or the agent assigned to your case by the consolidation agency contacts each of your creditors and tries to convince them of the advantages they will get if they agree to lower your monthly payments. Sometimes in order to obtain their money sooner the lenders agree to a cut on the overall debt including capital and interests. In many cases debt consolidation agencies have obtained up to a 65% reduction of the debtor’s outstanding loans and credit card balances.

Once the negotiation process is completed; your debt expenses will be greatly reduced. However, sometimes the procedure is not enough and you may not be able to afford the monthly payments. At this stage, some debt consolidation agencies offer a debt consolidation loan with a longer repayment program. You just pay this single monthly installment to them and they take care of your loan payments and bills.

The problem is that in certain situations there is too much debt that is non-negotiable. Typically, federal student loans and some private student loan programs, home loans, home equity loans and any other form of secured loan is too hard to negotiate because the lender is comfortable knowing that he can legally claim your property in case you fail to repay the loan.

Refinancing

One would think that refinancing would only solve the problem with your home loan, but truth is that by taking advantage of cash out refinance loans you can request a higher loan amount than the amount of your current mortgage’s remaining debt and use that extra money to cancel other non-negotiable debt.

This procedure will not reduce your debt but will reduce your income/spending ratio because by refinancing you’ll be able to spread your debt into a longer repayment program reducing the amount of your monthly payments. Since by applying for a cash-out refinance loan you’ll get actual cash, you can use it for prepaying outstanding debt, but be careful to repay those loans that don’t have prepayment penalties first; that way you’ll save even more money.

The only difficulty that this method presents is that you need to have enough equity on your home in order to obtain a cash-out refinance loan. If a home equity loan is part of the debt you need to repay, chances are that you won’t be able to use this system. However, there are some lenders offering up to 135% financing at slightly higher rates. If there is no other choice, you can resort to them.

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/bad-credit-personal-loans.html” rel=”nofollow”>Personal Loans for Bad Credit and <a href="http://www.badcreditloanservices.com/unsecured-loans.html” rel=”nofollow”>Unsecured Loans thoroughly you can visit her site http://www.badcreditloanservices.com
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Facts to Consider About Debt Relief

Are you like the thousands of Americans who feel very overwhelmed by debt? Sometimes, relief seems like it is nowhere in sight. If you are looking for debt relief and would like to get out of debt, there are a few options to consider.
The process might seem complicated, but if you are dedicated at becoming debt free it can be very simple. It is possible to get the debt relief you need but it takes some time and patience on your end. Be prepared to budget your finances, keep track of what you’re spending and start saving money.
If you are looking for debt relief help there are a few things to consider. If you are a home owner, you can take out a Home Equity loan. The equity in your home can be used towards paying off any debts that carry a high interest.
A home equity loan is one that is secured, so you will be able to get reasonable interest rates on your loan. People who are looking to get out of debt, if they own a home they are very fortunate since the lower rates can help them to manage their debt.
Another option to consider is trying to renegotiate the terms of your credit line. By talking with creditors, you might just be able to work out a negotiation that is favorable for the both of you.
If you let them know what terms you are able to pay them on, they might be willing to lower them. It really is in their favor if they help you. If you have to file for bankruptcy, then they will never get paid for the account.
If possible, try to pay more than your minimum balance every month. This is the quickest form of debt relief, if your budget allows you to do so. By paying the minimum every month you will be in debt for years!
This will result in thousands of dollars in interest fees alone. If you can pay more each month, you will get out of debt faster and of course avoid paying extra in interest.
There is credit counseling available for people who need it. Consider working with a debt settlement or debt consolidation company. Debt consolidation is when the company you are working with will arrange for you to have one, lower monthly payment based on a lower interest rate. You do have to cancel all accounts with your credit companies.
Debt settlement is usually considered by people who feel that the consolidating is not right for them. If you are unable make your minimum payments to the debt consolidation program, then negotiating those debts is usually the next step.
If you decide to use a business to help with your debt relief, then make sure you do the research. Find out if there are any complaints and make sure you are dealing with a reputable company.
Know up front how much they will be charging. The quotes will be free (or they should be) from these companies, but it will cost you something to have them work to settle your debts.
Just do your research, know what the company is providing and what they will do for you. Get it all in writing, and get started on finding the debt relief you deserve.

Christina Costa, a freelance writer, recommends eQuoteGrabber.com for debt relief where you can receive help with all of your personal debt settlement needs in seconds! Visit http://www.eQuoteGrabber.com
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17 Debt Advice Tips for Australians

Debt problems come in all shapes and sizes from the occasional cash flow crisis to the full on, out of control, debt nightmare that requires professional debt advice.

For Australians experiencing short term debt problems a number of easy steps are open to them.

1 One of the simplest and best debt advice tips is drawing up a budget and sticking to it so that it’s easy to see what money is coming in and what’s heading out.

2 Most consumers’ wallets contain credit and store cards that they have had for some years. As consumers get older their credit score often improves with age, meaning they could be eligible for cheaper credit cards and could save money if they switched lender. It is possible to switch away hundreds of dollars of credit card interest this way.

3 Getting a list of standing orders and direct debits from your bank is a good way of spotting non-essential outgoings that could be put to better use.

4 Interest free loan and buy now pay later deals are often expensive and designed to part consumers from their hard earned cash. It is best to avoid these deals, and only buy what you can pay in cash for.

5 Pay more than the minimum monthly payments on all credit cards, otherwise you will be paying more than you need to in interest payments.

6 If you have a home loan, think about refinancing. If you do your sums carefully you could save money on an introductory cheap rate.

For consumers who are facing more than short term debt problems a number of alternative steps are available.

7 Think about consolidating all credit and store card debt into one loan. Average loan rates are significantly less than those for average credit and store cards. Applying for two smaller loans, rather than one large one, can make it easier to get your loan accepted.

8 Don’t extend any loan for more than 3 or 4 years, doing so can make the total cost of the loan much more expensive, for just small monthly savings.

9 Consumers with consumer credit insurance should consider cancelling it, as it not good value for money. It was highlighted as a ‘junk insurance’ by the Australian Consumer’s Association. CCI adds a considerable amount to the monthly cost of credit, and it won’t give any advantage to a credit application.

10 Consumers with a mortgage could think about re-mortgaging and consolidate their credit or store card debts into their mortgage, at a lower rate of interest.

11 Consumers struggling with their debt need to prioritise their monthly payments, to ensure that the essentials are paid first. Failure to pay the mortgage, secured loan or rent can lead to homelessness, so it’s always important to pay these first. Don’t pay the lender that shouts the loudest first.

12 There are government funded independent financial counsellors in all parts of Australia. They can give consumers free expert debt advice. Consumers who need to deal with their creditors to reduce their payments can get help with an Informal Arrangement through their local free financial counsellor.

13 If a consumer’s debt problems have become a real horror story, there are a number of options to relieve the stress and burden and achieve a fresh start.

14 Bankruptcy is an option for those who cannot see any way of repaying their debts. For $400 it wipes the slate clean. Creditors are no longer able to pursue a customer who has been declared bankrupt, and the consumer will be discharged after three years.

The downside of bankruptcy is that it remains on a consumer’s credit file for seven years. Their assets, which could include their home, will be sold off by a Registered Trustee or the Insolvency and Trustee Service. A contribution is taken from bankrupts who earn over a certain level, currently around $40,000, to pay their creditors.

15 An alternative to formal bankruptcy is a Debt Agreement, targeted at people on low incomes with few assets. This can reduce the amount consumers owe to their creditors by agreeing a compromise deal. Debt Agreements tend to be used by consumers struggling with their credit cards or loan payments, and who earn less than $58,000 after tax. These can be administered by Registered Trustees, ITSA or a third party. Service fees can be around 20%. As long as 75% of creditors agree, a formal Debt Agreement is binding on creditors.

16 A more expensive alternative to a Debt Agreement is a Personal Insolvency Agreement. These are open to more consumers, but can be more expensive because they can only be administered by a Registered Trustee or ITSA. Both Debt Agreements and Personal Insolvency Agreements appear on credit reports for 7 years.

17 For more debt advice information, check out the debt advice published by the Australian Competition and Consumer Commission and the Australian Securities and Investments Commission entitled: “Dealing with debt: Your rights and responsibilities.”

Description: Many more Australians are in need of good debt advice since the onset of the credit crunch. This article contains top tips for people facing a cashflow crisis to those in need of hitting the financial reset button.

Tristan Dunston is an independent public relations consultant specialising in finance and privacy matters. He loves whitewater kayaking and photography
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