Archive for January 2010
How To Get Out of Credit Card Debt FAST!
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Credit Card Debt Information and Help
You’ve probably heard the frightening statistic that the average American owes more than $8,000 in credit card debt. Fortunately, that statistic isn’t completely accurate. Here are true credit card debt info and statistics.
Average Credit Card Debt
The average credit card debt is actually around $2,200. This is still a lot of money when you consider that the average income is $48,600, but it’s not a dire figure.
However, only 45% of Americans have credit card debt. 23% of Americans don’t even have credit cards. The remaining 32% pay their credit cards in full every month. 8.3% owe more than $9,000 on their credit cards.
If you carry a balance on your credit cards, you can become one of the 32% who doesn’t. Although it seems challenging with rising fuel and food prices, resolving to cut back on your spending can make a real difference in your ability to pay debt without truly restricting your enjoyment of life.
Total Consumer Debt Info
You may be wondering how these statistics are derived. They’re derived in part from the Federal Reserve’s Survey of Consumer Finances, which is conducted every three years.
As of June 27, Americans had a total of $2.46 trillion in consumer debt, but this figure includes mortgages, auto loans, student loans, and other non-revolving debt. Revolving debt, which is usually credit card debt, was only $904 billion. While this figure is still high, it’s not the devastating figure you’re more likely to hear on the news.
What Can You Do?
If you’re one of the people with revolving debt, you might be wondering how you become one of the people without it. It’s not easy, but it can be done. The key lies in learning to control your spending. American society doesn’t make that easy because our economy relies on spending, but if you have the willpower to do what’s right for your personal finances, you can do it.
There are three basic steps to controlling credit card use:
- Stop using them for one month. See if you can pay for everything with cash in your pocket. Checks don’t count. It must be cold, hard cash. Once you actually see the money leaving your pocket, you’ll have a much better idea of your actual spending. You’ll also discover your money cycle because you won’t be able to spend money that isn’t in your checking account.
There are exceptions to this rule. For example, you can’t pay your bills, rent, or mortgage in cash. Use checks for your monthly bills, but write them out and deduct them from your checkbook balance before you withdraw cash to spend. - Reduce other expenses to free up more cash. Consider canceling or reducing cable, conserving energy, and buying less expensive groceries. Rather than putting the freed up cash in your pocket, use it to pay off debt, especially debt from high-rate credit cards.
Avoid buying things you want, but don’t actually need. Food is a need. Dinner in an expensive restaurant is not. Shoes for your children are a need. $200 designer sneakers your child will grow out of in three months are not. Transportation is a need. Unless you live up a steep, unpaved road, a $40,000 SUV is not.
Impulse purchases are usually wants, not needs. Wait at least two weeks before buying anything. If you still want it after two weeks, it might be a need, or it might simply be something you really want. If it’s something you need, buy it. If it’s something you really want, buy it only if you can afford to pay cash without limiting your ability to pay off debt or save for retirement. If you’re still paying off your credit cards, avoid buying things you want, no matter how much you want them.
Once you learn to control your spending and differentiate between needs and wants, you can pay off debt more quickly. Soon you’ll be one of the 45% of Americans who pays off their credit cards every month, and you won’t be contributing one dime to the $904 billion in revolving debt.
Source: http://www.bills.com/credit-card-debt-info/
justin narin
http://www.articlesbase.com/credit-articles/credit-card-debt-information-and-help-746106.html
Your Debt – Should You Consolidate Or Eliminate?
Credit card debt is at an all-time high, delinquency rates are skyrocketing and thousands of people are losing their jobs to outsourcing every day. If you’re at the end of your rope, and ready to throw in the towel regarding your financial struggles, you can be sure you’re not alone. Unfortunately, many people are faced with these same problems, and are finding this situation to be intimidating and unpredictable due to their uncertain futures. If your credit accounts are delinquent, or you’re barely making ends meet attempting to keep your accounts current, you can take comfort in knowing that there are options available to assist you in getting control of your finances.
?Credit Counseling – Upon signing up for a credit counseling service, the company you’ve chosen will contact your various creditors to work out a repayment plan. At that time you will be required to make one monthly payment to the credit counseling service, and they will in turn distribute your funds to your various creditors. Prior to committing to the services of a consumer credit counseling service, please take the time to do your homework to ensure that the firm, with which you’ve signed up, is not funded by your creditors, as many are. This leaves the average consumer wondering whether or not the consumer credit counseling service is really interested in what’s best for them, as opposed to looking out for the best interest of their creditors. Also, please know that many of these firms claim to be “non- profit” organizations; this doesn’t necessarily mean that their services are free, or even affordable. In fact, some of these firms aren’t even legitimate. As with everything related to your current financial situation, conduct the proper research to be certain this is the right path for you, as entering into a credit counseling agreement can take longer than five years to complete and you’ll still be liable to pay off the entire amount of your debt, plus interest.
?Debt Consolidation – This route is best used by individuals who have sufficient equity in their homes in order to obtain the required funding, through a home equity line of credit or second mortgage, to pay off all of their credit card debt, and still have some amount of equity available for potential emergencies. Obtaining a second mortgage may enable you to reduce the amount of interest you’re now paying on your credit cards; however it’s important to be extremely cautious when considering using your home as collateral. You see, you do run the risk of losing your home if you’re unable to make the required monthly payments on your home equity loan at any time in the future, due to unforeseen circumstances. It’s also crucial to shop around because the cost of a home equity loan can be significant if you’re required to pay points. When you take a closer look at the bottom line, you’ll want to see that you’re ahead of the “credit game” and not just inching by.
?Bankruptcy – In most cases bankruptcy is used as a last resort because this option is a matter of public record and its consequences are long lasting. As you may know there are two types of bankruptcy – Chapter 7 and Chapter 13. Chapter 7 Bankruptcy is known as “straight bankruptcy” due to the fact that your debts are discharged and no repayment plan is required. Because of the bankruptcy law that became effective in October 2005, however, many individuals have found that they’re no longer eligible for Chapter 7 and instead must file Chapter 13 Bankruptcy. Chapter 13 Bankruptcy requires a court approved repayment plan – usually over a period of five years or so. After all of your payments have been made, you will then receive a discharge of debts. The new bankruptcy law also requires that bankruptcy filers obtain credit counseling from a government approved organization six months prior to filing for either type of bankruptcy relief. If you must file bankruptcy, it’s very important to hire an attorney with whom you’re comfortable. Don’t be afraid to network a little bit and ask around; chances are you’ll run into somebody who has previously filed bankruptcy and is more than happy to recommend an excellent attorney.
?Debt Settlement – Debt settlement is a process whereby most creditors will agree to accept less than the full balance of an account as payment in full. Debt settlement has been the proverbial lifeboat for many individuals and businesses that otherwise would have had no choice other than to file for bankruptcy. If you’re considering debt settlement, be sure to speak with at least three firms to determine how each operates and which of their plans best meets your needs. There are many debt settlement companies who work on a contingency basis, and do not require any up-front or monthly maintenance fees. Whichever firm you choose to represent you, take the time to be certain that your financial health is their number one priority. When you speak with them, make sure that all of your questions are answered to your satisfaction, and that you have a clear understanding of the costs and procedures of their debt settlement program.
Congratulations on your proactive stance and taking the time to look into the resources that will help you achieve a debt-free lifestyle. What’s most important is choosing the path that best meets your needs.
Marie Megge
http://www.articlesbase.com/finance-articles/your-debt-should-you-consolidate-or-eliminate-131178.html
What Is Credit Card Debt Consolidation?
Credit card consolidation entails taking out one loan on your card to pay off several others. This is often done to secure a lower interest rate, secure a fixed interest rate or for the convenience of servicing only one loan. It helps hundreds of thousands consumers reduce their debt and high interest rates. Since cards are issued at an alarming rate, it is needed to help the consumers tidy over their multiplying debts.
You can apply for a credit card consolidation loan to help in the consumers debt consolidation procedure. It is a regular loan, reengineered to counter debts. The speed with which debts are eliminated is of prime importance in debt settlement process. Since the debts carry a very high rate of interest, employing a method that moves slowly will only increase the interest burden over time. These loans present the fastest method of coming out of debts.
So, how can consolidation help?
Credit card debt consolidation counseling can help in consolidating your debts into one single loan that can be paid off as soon as possible. It can also, through the debt program, help you by lowering your interest rates and enabling you to pay off more of the principal, therefore getting out of debt more quickly.
The debt help that you seek can involve dealing with those annoying collection agencies that call your house at all hours of the day harassing you for money. Once enrolled in the service of a consolidation company, you simply give those collection agencies their phone number and they will deal with them for you.
When you sign up for the debt program, the company chart will help to refer you to the right credit consultant based on:
Your current financial status.
Your State of residence.
The amount of debt you owe.
Unsecured financial obligations like debts, payday loans, utility bills, medical bills, student loans etc.
Total Secured loans like mortgage, auto loans etc.
Balance on each credit card.
If you own a home in which you might have some equity.
Principal / Interest component of the total of each card.
Known as a Ranking Chart, this chart which has credible debt consolidation companies (based on community feedback) offering consolidation, settlement, counseling and budgeting services, on its rolls, will find the consultant best suited to your needs. After free counseling, you are free to accept or reject the offers suggested by the counselor.
Your credit report is an essential part of your credit and debt management. It is very important to check your credit report often in order to see what creditors are saying about you. It is also an excellent way to check on the progress of your loan program if you are currently in the process of improving your credit by paying off credit card debt.
Besides this, your credit report can alert you to possible identity theft by checking any unusual changes such as any new credit accounts that have recently been opened without your authorization. This can minimize future consolidation and bad credit problems due to unauthorized activity. Many companies issue a free copy of your credit report as
a part of their thorough debt consolidation service once you complete the application form and submit it. So, go ahead and enroll in a reputable program which consolidate all your dues into one single loan.
Saurabh Jain
http://www.articlesbase.com/non-fiction-articles/what-is-credit-card-debt-consolidation-133975.html
Debt Settlement Program
Bankruptcy is a legally declared inability or impairment of ability of an individual or organizations to pay their creditors. Creditors may file a bankruptcy petition against a debtor in an effort to recoup a portion of what they are owed. In the majority of cases, however, bankruptcy is initiated by the debtor.
Bankruptcy in the United States is a matter placed under Federal jurisdiction by the United States Constitution, which allows Congress to enact “uniform laws on the subject of bankruptcies throughout the United States.” The Congress has enacted statute law governing bankruptcy, primarily in the form of the Bankruptcy Code, located at Title 11 of the United States Code. Federal law is amplified by state law in some places where Federal law fails to speak or expressly defers to state law.
There are six types of bankruptcy under the Bankruptcy Code, located at Title 11 of the United States Code:
· Chapter 7: basic liquidation for individuals and businesses;
· Chapter 9: municipal bankruptcy;
· Chapter 11: rehabilitation or reorganization, used primarily by business debtors, but sometimes by individuals with substantial debts and assets;
· Chapter 12: rehabilitation for family farmers and fishermen;
· Chapter 13: rehabilitation with a payment plan for individuals with a regular source of income;
· Chapter 15: ancillary and other international cases.
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There are two primary types of personal bankruptcy: Chapter 13 and Chapter 7. Each must be filed in federal bankruptcy court.
Chapter 13 allows people with a steady income to keep property, like a mortgaged house or a car, that they otherwise might lose. In Chapter 13, the court approves a repayment plan that allows you to use your future income to pay off a default during a three-to-five-year period, rather than surrender any property. After you have made all the payments under the plan, you receive a discharge of your debts.
Known as straight bankruptcy, Chapter 7 involves liquidation of all assets that are not exempt. Exempt property may include automobiles, work-related tools, and basic household furnishings. Some of your property may be sold by a court-appointed official — a trustee — or turned over to your creditors. You can receive a discharge of your debts through Chapter 7 only once every six years.
Both types of bankruptcy may get rid of unsecured debts and stop foreclosures, repossessions, garnishments, utility shut-offs, and debt collection activities. Both also provide exemptions that allow people to keep certain assets, although exemption amounts vary. Note that personal bankruptcy usually does not erase child support, alimony, fines, taxes, and some student loan obligations. And unless you have an acceptable plan to catch up on your debt under Chapter 13, bankruptcy usually does not allow you to keep property when your creditor has an unpaid mortgage or lien on it.
The Debt Settlementdefines Bankruptcy as: Personal bankruptcy generally is considered the debt management option of last resort because the results are long-lasting and far-reaching. A bankruptcy stays on your credit report for 10 years, and can make it difficult to obtain credit, buy a home, get life insurance, or sometimes get a job. Still, it is a legal procedure that offers a fresh start for people who can’t satisfy their debts. People who follow the bankruptcy rules receive a discharge — a court order that says they don’t have to repay certain debts.
James123
http://www.articlesbase.com/loans-articles/debt-settlement-program-671956.html
