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The Right Answer for Debt Management Debt Management and Consumer Counseling
It isn't very hard to get into financial difficulties. Getting out is a lot harder. It might be a bit painful, but it can be done.
And once you have breathed out-of-debt air, you will never again want to find yourself in deep debt waters again.
Most people do not view credit cards as loans, but that is precisely what they are -- loans. When you hand a credit card to a cashier, you have in effect borrowed the money to pay for your purchase.
The same is true when you enter your credit card information on websites to buy merchandise. It's true that credit cards are a convenience. They make buying things much easier and so much quicker, but they are loans.
When you engage the services of a consumer credit counseling service, you will be asked to supply a list of your debts. You will find that some debts can be renegotiated -- even some secured debts can be renegotiated, including mortgages. You will also find out that your unsecured debt (credit cards) can be renegotiated. But there is a catch there.
A credit counselor is usually in a position to stop the interest and late charges from continuing to mount on your credit card bills. Interest rates can be decreased and late charges can be eliminated altogether. The catch is that the accounts will be closed...permanently. You cannot continue to use those credit cards, and you cannot apply for another credit card until your debts have been paid off in full.
Your total monthly obligations can be reduced by quite a bit and you will be able to live within the budget that will be created for you. It sounds really painful, doesn't it? The truth! You are going to have to make some major adjustments, but that isn't necessarily a bad thing.
See Also:
Debt Management - Getting the Priorities Straight
| Responsible Debt Management Debt Management and Credit Scores
There is so much information (and misinformation) out on the net about credit scores.
Some people are under the impression that a credit score and a credit report are one and the same thing. That is wrong. They are two entirely different things.
The credit SCORE is based upon the credit REPORT. Credit scoring is just a simplified method of identifying good credit risks from poor credit risks. You can bet that lenders will get a credit SCORE before they proceed with the loan process but before a loan process goes very far, the lender will get full credit reports and from all three of the credit reporting agencies.
The credit score is based only upon credit history. The things that determine a credit score are whether payments were made on time and in full as well as on other things that are contained in a full credit report like employment history and income level. Points are awarded for each of these things as well as many others.
You might say that the credit score is a snapshot of a credit report -- a summation, if you will, that gives lenders a good idea of whether an applicant is a good or bad credit risk.
Some people believe that if they stay out of debt and pay in cash as they go, they will have a good credit score and a good credit report, but that is just wrong. They will have no credit history, no credit score, and no credit report. All of these things are based upon credit -- payments of loans and debts. You must have been granted loans by banks, or you must have a credit card payment history, in order to have a credit score or a credit report.
The fastest (and least expensive way) of building credit history is to get a credit card, make charges, and then pay them off before any interest is added. |
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More articles:
Debt Management When Starting a Business
Surviving Debt Management Do-Overs
The Virgin Consumer and Debt Management
debt-consolidation101.info
credit.about.com
| Budgeting for Debt Management Debt Management through Bankruptcy
Bankruptcy is a last resort! It should never even be considered as an option until all other options of debt relief have been completely exhausted -- at least not for us ordinary mortals.
If you do find yourself in the position of having to declare bankruptcy, you will be in some pretty good company. Donald Trump, Burt Reynolds, Walt Disney, Wayne Newton, George Jones, MC Hammer, and Johnny Unitas are just a few of the very famous people who have had to declare bankruptcy and then been able to get on with their lives.
It isn't the end of the world. You will survive!
Bankruptcy laws have changed. There was a time when filing bankruptcy erased all debts but that really is no longer the case. You need a lawyer to guide you through the bankruptcy process. Some of your assets are protected even today, and without a good lawyer in your corner, you can be fooled into thinking that they are not protected.
Don't take the chance. If you must file for bankruptcy, get a good bankruptcy lawyer in your corner so that you come out on the other side in as good shape as possible.
Don't listen to hearsay and rumors. You need facts...good concrete information. A lawyer who specializes in bankruptcy can get you the very best settlements that are possible. The harassing phone calls will stop immediately.
Yes, you will lose most of your assets through bankruptcy, but you will be getting a clean slate. Contrary to popular opinion, it is sometimes easier to get loans and credit cards after bankruptcy than it was prior to the bankruptcy.
You will have to start over, so to speak, after bankruptcy, but that doesn't necessarily mean starting from zero. You can retain many of your assets if you have the right legal counsel. |
Related Topics: Five Secrets of Debt Management,
Debt Management-Getting the Priorities Straight, Debt Management Is a Family Affair
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