How to Erase Credit Card Debt: (while still living your life*)

August 2nd, 2010 | Posted in Credit Card Debt

Getting stuck in debt is stressful, emotionally draining, and can really take the enjoyment out of day to day life. Most people don’t have a clue how to start fixing their finances, but if you take a slow step by step approach, you can really accomplish alot. There are a great number of businesses that offer debt relief, but quite a few of these “amazing” offers, turn out to be like a mirage in the desert and will leave you thirsty for honest, unbiased debt help.

how to erase debt mindmap

Above we’ve created a “how to erase debt” mindmap that you can refer to if you are unsure where to start to get rid of your debt. “Click Here for the Full SizeContinue reading »

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Credit Card Debt: Myth vs. Reality

July 20th, 2010 | Posted in Credit Card Debt

credit card debt mythsIn 2010, credit card debt has become a very typical, normal part of growing up in today’s society… Carrying a ballooning monthly balance is normal, and taking on debt to keep up with the neighborhood families is routine. Many people start taking on debt in college and continue until their finances reach a breaking point. Only when things become completely out of hand, debtors feel like they need to address this very serious issue.

Credit cards are a big problem because they inevitably lead to overspending. There is something about the physical act of parting with paper money that is lost on the user when they just swipe a plastic card. This could be one of the reasons that the average U.S. citizen holds about $3500+ in debt! “Paying 15% interest” on a credit card debt is such a poor use of money, when it could be saved for for something important (like food, rent, family, or yourself!). Alot of people out there are stuck in bad habits when it comes to credit cards. There is alot of bad information, myths, and blatant lies about credit card debt. Read down the page as we attempt to squash the top 10: Continue reading »

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Debt Management Plans: how do they work?

July 8th, 2010 | Posted in Debt Management

debt management plansIt can be a challenge to understand the differences between debt management, debt settlement, and debt consolidation. There is alot of new terminology to learn, when you are trying to understand the basics of these programs. It is even more difficult to find a source of reliable information on the subject that is trustworthy and unbiased….With that being said, here is a breakdown on what you can expect from a debt management plan.

Most debt management plans (DMPs) are services provided by non-profit credit counseling services (although some companies do charge). These organizations have non-commission based employees that provide financial counseling, planning, and repayment plans. They can also provide a range of services relating to financial planning, debt repayment, housing, and bankruptcy. A debt management plan is a service that involves the negotiation of your unsecured debt with your creditor in an attempt to arbitrate lower interest, fees, and payments. Unsecured debts include things like credit cards, medical bills, or any personal loans not attached to collateral. Your counselor will propose a monthly payment that should be palatable to both you and your creditors. If it is accepted by your creditor, you will usually pay less interest, reduced fees, a lower balance, or lower monthly payments over a period of time until the balance is repaid. Continue reading »

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What is Credit Counseling?

July 2nd, 2010 | Posted in Credit Counseling

credit counselingThere are many professional services that you can seek out if you have a debt problem…Some companies will offer to slash your debt in half, some will offer a loan at a low interest rate, but credit counselors are “impartial non-profit organizations” that can help you:

1) negotiate with creditors

2) create  a monthly budget

3) set up a debt management plan (without the agenda to make money off of you.)

Most credit counseling services operate as non-profit groups and for the most part offer their services for minimal or no costs. The majority of non-profit credit counseling organizations are accredited through the Aiccca or the NFCC and provide financial counseling and repayment strategies. Getting in contact with these two companies is a good place to start when looking for an accredited non-profit credit counselor.  Continue reading »

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California Collection Laws

June 30th, 2010 | Posted in Debt Help

Americans live under both federal and state rules. When it comes to debt and collections, consumers that are living in California are better protected from underhanded collection practices than those in the other states. Aside from the state their debt collection rights and protection under the Fair Debt Collection Act (FDCPA), California residents also benefit from the Rosenthal Fair Debt Collection Practices Act.

What sets California collection laws apart from the other states?

The Statue of Limitations (SOL) on debt collection in California is 4 years on written agreements – calculated from the date of the breach and 2 years on oral agreements.

California has a 4-year statute of limitations on debt collections, as opposed to 6 years for most states. This means that a consumer who owes a debt from 4 years ago may not be sued for a judgment, but the creditor/lender may try. The Statute of Limitations expiration is a defense against a judgment. The consumer must show up and defend themselves, when they receive a court trial date. But, many consumers, thinking that they have no chance of winning against the creditor, don’t attend the hearing. As a result, many cases of judgment are won via a default judgment (or unchallenged). Continue reading »

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Debt Settlement: what are realistic expectations?

June 23rd, 2010 | Posted in Debt Settlement

credit card debt settlementIf you gaze down the row of ads when you “search” for debt settlement, you can often come across some pretty unbelievable claims. Some companies state a 50%, 60%, or even a 70% reduction in your total debt…

This “HUGE REDUCTION” would definitely appeal to anyone swimming in an ocean of credit card debt. But, should you buy into this tremendous hype? The answer is N-O. Before you make any rash decisions, you need to step back a minute. Learn a little bit about how these companies operate and how they actually profit off you and  your debt. Once you grasp how debt settlement companies work, it’ll be much easier to decide if a settlement company is the right answer to your problem. Continue reading »

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Getting a Loan to Pay Off Credit Card Debt

June 8th, 2010 | Posted in Debt Consolidation

credit card debt loanThe idea behind applying for a loan to pay off debt is that you are trading high interest credit card debt, for a low interest loan with a very long term payment strategy.

It is essentially a debt reorganization. You rearrange your finances to provide yourself with a more manageable monthly payment…that is the basic idea. But, before you commit to this process, you need to ask: is acquiring new debt, to pay off older debt really a smart idea?

There are 2 main factors that should decide whether a loan is right for you.

1) The Interest Rate of Your Credit Cards: if you can trade 20%+ interest rate on credit cards for an 8% home equity loan, that makes decent financial sense.

2) Your Ability to Pay Off this Loan in the Long Term: can you predict what will your finances look like 5 years from now? A loan is commitment that could span a decade or more. You truly need to understand the ramifications of your loan and how it could affect your life in the future. Continue reading »

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Debt Relief Programs – 5 “obvious” ways to cut debt

June 3rd, 2010 | Posted in Debt Help

credit card reliefIf your credit card balance has ballooned to a size that makes you scared to open your statements, you really need to start trimming down that debt… Most cards carry interest rates, when compared to other types of financing are considered extremely high. Rates can even adjust after a promotional period and send your balance through the roof.

So, if your credit card balance is out of control and you’re struggling to get those bills paid, what steps are you supposed to take?

To get rid of the debt you need to get educated quick, and the internet is a decent place to start. There is a wealth of information out there, but to be honest, most of it is garbage intended to persuade you to sign up for debt services. You need to be able to separate the sales pitches from the helpful goodies and figure out a plan to remove yourself from the depths of the debt hole you’ve dug. Here are some simple ways that you can reverse bad spending habits and get on track to recovery… Continue reading »

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Liens on Property Due to Credit Card Debt

May 4th, 2010 | Posted in Debt Help

Lein for Credit Card DebtA lien is a legal claim on your property for some form of outstanding debt or obligation…in this case unpaid credit card debt. Credit card companies extend a borrower credit without any form of collateral, so in order to recover their debts they sometimes have to get a legal judgement that may include a lien on property.

Getting a legal judgement involves court costs, attorney’s fees, and labor. This court action would be a step of last resort for the credit card company because of the high costs and risk of losing the judgement.

It is possible for a lien to be placed on your home due to unpaid credit card debt, but is very unlikely because of time and high costs.

Can i sell my home if i have a lien, because of credit card debt?

Selling a home with a lien is more difficult. In many cases a lien will need to be payed off before the property is sold. Or, sometimes the lien will be paid out of the proceeds of the home sale. If for some reason the lien isn’t taken care of by the revenue of the sale, the buyer will inherit the lien. In this case they will acquire your debt as the property changes ownership. Continue reading »

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How to get Assistance for Medical Debt

April 25th, 2010 | Posted in Medical Debt

Medical DebtA serious medical condition can generate massive debt and mountains of bills…

Hospitals charge exorbitant amounts for simple procedures, so a short stay can turn your finances upside down. Many insurance companies aren’t covering all that they used to. The recession is affecting their bottom line and they are passing more expenses on to the consumer. If paying medical debt is an impossibility, there are some options in how you can deal with it. You can choose to negotiate with the hospital yourself, get a private company’s help (debt reduction companies, health care advocates, medical billing advocates), or government and private funding programs. Remember unsecured debt(i.e. medical debt, credit card debt) is negotiable. Hospitals CAN make a deal with you, it is very common. Continue reading »

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