Ladydebt

If you are buried in bills, you may be ready to get a proverbial shovel and try to dig yourself out of a hole. Many people who do not know anything about finances may dig themselves deeper and cause themselves more trouble than they intended to if they are not careful. A person can get around for this if he knows what the best debt solutions are.

Debt solutions are not as hard as they might seem. They do not even involve paying back everything a person owes. In fact, sometimes it is impossible for a person who has dug a deep hole to pay back all the money that he owes. Protections exist for consumers with a lot of money owed and there is a law on the books that gives the debtor a chance to start over. Finding a lawyer who can guide you through the process is a great way towards getting back on your feet, but bankruptcy is extreme.

The reader may wonder if there are any other debt solutions since the idea of bankruptcy does not appeal to everyone. There are legal ways a person can get his debt reduced. They do not remain on a person’s credit score afterward. They even make it possible to pay off debts and repair credit at the same time.

No honest business offering debt solutions will tell a customer that this will happen overnight, but it is possible. Debts have statutes of limitations. A person who finds a debt still on his record can check the law and request it to be removed. He can do this own his own but he should not. This is just one of the possible debt solutions a person may try. It is not the only one. There are other options for debt reduction that have not yet been discussed.

When you want to know what these debt solutions are, you should contact us. A member of our staff can walk you, your spouse and your family through the process needed to recover from debt. Like any other worthwhile activity, it takes time to go through the full process of finding debt solutions that will work for you.

Home Equity Loans Versus Consumer Credit Counseling for Debt Consolidation

With the recent bankruptcy reforms, some consumers might turn to consumer credit counseling to get out of their heavy debt. But, do not forget one of your biggest assets is the home in which you live. While consumer credit counseling does work for many people, some mortgage industry experts think a home equity loan could erase your debt faster and improve your credit almost immediately.

First, lets talk about Consumer Credit Counseling. When a consumer signs up for Consumer Credit Counseling, or CCC for short, the CCC agency contacts each of the creditors and negotiates lower interest rates or no interest at all, and sets up a payment schedule. In severe cases, the National Foundation for Consumer Credit Counseling shows consumers should participate in a Debt management plan or DMP.

“A DMP is a systematic way to pay down your outstanding debt through monthly deposits to the agency, which will then distribute these funds to your creditors. By participating in this program, you may benefit from reduced or waived finance charges and fewer collection calls. And when you have completed your payments, we’ll help you reestablish credit.”

“When you use a credit-counseling service to structure a debt-management plan, the accounts included in that plan are usually noted on your credit report as “not being paid as agreed, says Don Taylor, Ph.D. “These creditors may also report that the payments are being received through a credit-counseling service.”

A consumer choosing to use a home equity loan to eliminate debt, pays off the debt immediately. Experts say “After using the funds from a 2nd mortgage to repay credit cards, many make the mistake of closing the credit accounts. However, if hoping to boost credit rating, closing older accounts will have a counter-effect. For this matter, never close accounts. If unable to use restraint with credit, cut or destroy the credit cards.” Another benefit to using a home equity loan is the IRS allows you to deduct the interest from your debt consolidation whereas CCC usually requires you to pay some interest, and personal credit card interest is no longer a valid tax deduction.

“Once credit accounts are paid in full, and homeowners begin making regular payments toward reducing the balance on the 2nd mortgage, a noticeable credit score increase will begin to occur. The key to boosting credit rating is keeping low balances, paying bills on time, and avoiding late payments.”

These Debt Consolidation or Debt Continuation Companies don’t tell you what you should absolutely know to be debt free.

78% of people who consolidate their debts will fall again in debts after a short period of time, and will end up in the office of a debt consolidation service.

Why? Simply because you think that you will really be debt free after three or five years, but it is not the case. Let me explain… Those company, after giving you a very nice pitch (anyway, you did not have choice: bankruptcy, home equity – you can loose your home – , debt settlement company another kind of wolf -), promise you that you will pay a lower interest rate.

But what is the catch? Yes there is a catch. The catch is that you will stay longer in debt if you want lower interest rates.

It is not the only reason why I call them Debt Continuation Services. Another reason is: While people are trying to consolidate their debts, they still need to live, and they drag out the credit card for their everyday life. Yes, bills are not stopping while you are trying to get out of debt, it is going on. And those services know that you will come back, this is the reason why they want to help you.

They know that debt consolidation companies are gaining in popularity, and because thousands of customers turn to these services, they continue to grow.

How do they catch so much customers?

Let’s review some examples of pitches promising to be debt free:

* We will help you to eliminate your debts, don’t worry

* Consolidate your bills into one monthly payment without borrowing

* Stop credit harassment, foreclosures, repossessions, tax levies and garnishment

* Keep your property

* Wipe out your debts! Consolidate your bills! How? By using the protection and assistance provided by federal law. For once, let the law work for you

Until here, it sounds good… Let’s continue,

* For that, you just need to pay us a one time bill, or a small fee.

Oh great you say! I found these people and they want to help me, and I will be debt free in less than three years. I must give it a try.

What? They just need to get you more in trouble, by having more debts, paying interest rates, work for them (making them richer than they already are).

And upon that, you need to investigate before choosing any debt consolidation service, because there is a lot of scams out there.

9 Steps To Get Out Of Debt – Part 8

Step 8 – Getting Insurance

Most people are only one major disaster or a few weeks of unemployment away from bankruptcy. If you have done all this work to get out of debt, you dont want it to all be in vain, just by one major crisis hitting you or your family. Theres nothing you can do to totally protect yourself from every type of catastrophe, but there are steps you can take to significantly reduce your risk.

The first half of this article is going to be on insurance, and well start with the type of insurance that is most likely to save you from being completely wiped out, medical insurance. This is one a lot of people choose not to buy because its quite often very expensive. This is a very dangerous decision, though.

You never know when you will need medical care and we all know it isnt cheap. Even if you are in perfect health, medical conditions can pop-up over night. You could wake up tomorrow and either have a major internal problem show up, or possibly have an accident and break a bone. You can easily rack up bills in the thousands, ten thousands or even hundreds of thousands from a single incident, and you never know when one will strike. Once this incident occurs, its usually too late to get insurance.

If medical insurance is available through your employer this is usually the cheapest option, however you can still get insurance if your employer doesnt offer it. The next cheapest option is most likely to get a group plan from another organization you belong to. Some examples would be a credit union or NASE. If you cant find a group program, you can still buy insurance as an individual, it just typically costs more. The best way to reduce the cost is to go with a plan that has a high deductible. You may end up paying 2000 or so if you have a major incident, however it wont completely wipe you out.

If you own a home, you most likely have homeowners insurance because your mortgage company has required it, but if not, be sure to get it. If you rent, you may think you dont need insurance on your property, however if a disaster was to hit the apartment complex or other place you live, you can still lose all of your possessions. You may think the apartments insurance will cover your losses, but it wont; you will need renters insurance. This is usually fairly affordable. If you own a car, you are required in most states to at least have liability insurance, but depending on the value of your car and whether or not you can afford to replace it if you were in a wreck, you may also want full coverage to cover any damage to your vehicle.

The last type of insurance I would like to mention is life insurance. This is something many people overlook, especially younger couples. If you are single and are not responsible for supporting anyone you may not need this insurance, but if you are married and have children or anyone else you are responsible for caring for, this is something you are going to want to have.

To determine how much insurance you need, I suggest calculating how much your family would need to get by with you gone and multiplying that by fifteen. This will most likely be a shockingly high number, but it will allow you to support your family indefinitely by allowing them to live off the interest from this money rather than the principal. Youll learn more about this in the next article.