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Debt Management-Getting the Priorities Straight Debt Management and Collecting Your Debts
Most of us who are very good at managing our own personal and business finances are very poor at collecting the monies that are owed to us. We really hate to find ourselves in the position of being a debt collector.
Because we take our own financial obligations seriously, we tend to think that others do the same. They don't...at least not all of them.
Everybody has at one time or another loaned friends 20 bucks and never seen a penny of it repaid yet, and most likely never will. We all know that. We knew when we made the loan that it was really a gift. Those kinds of things you simple chalk up to experience and move on.
Other loans of substantial amounts that are made to family and friends should, however, have legal documents attached to them. Asking for collateral isn't unheard of, and neither is charging interest.
Advice given by very wise people of the past tells us to simply not lend money to family or friends, and it really is excellent advice. You aren't a bank or a lending institution. You are simply very good at managing your own finances.
If lending institutions won't lend your friends and relatives money, it is for a very good reason. The institutions have information that tells them that they aren't very likely to get their money back. You won't have the information about how they have handled debt in the past or how deeply in debt they are at the present. All you are going to know is what they choose to tell you.
The best answer when friends and relatives ask you to loan them a substantial amount of money is, “NO.” But if you do decide to make the loan anyway, at least make it legal and binding with contracts, collateral, and interest.
See Also:
Five Secrets of Debt Management
| Debt Management-The Controls Debt Management and Home Equity Loans
Most consolidation loans are second mortgages, and second mortgages are home equity loans. When you buy a home, you usually make a fairly substantial down payment, so you start out with some equity in the home.
As the years go by and you make your monthly mortgage payments, you increase the equity that you have in the home; and when property values increase, your equity in the home increases. The equity that you have in your home represents the portion of the value of the home that actually belongs to you.
Many times when people find themselves in a financial bind, debt collectors calling and coming by, and the mailbox full of second, third, and final notices, they will look at the equity that they have accumulated in their homes and see it as a possible way out of a financial crisis. It is a possibility, of course, but it is one that needs to be well thought out before it is applied.
There are two kinds of debt. There is secured debt, which includes anything for which there is collateral. Your car is the collateral for the loan that you made to buy your car. Your house is the collateral that you used to buy your house. Your guitar and amplifier are the collateral that you used to get the loan to buy them. If you dont pay your secured loans, the lending institution can repossess the collateral that you used.
Unsecured debt is the other kind of debt. This is credit card debt. We are talking about all kinds of credit card debt. The store credit card that you used to buy your television set is unsecured debt. The television is not collateral for that loan. If you don't pay that loan, they will not repossess your television set. They can sue you for payment -- they probably won't, but they could.
When you make a second mortgage or consolidation loan, you are making all of your unsecured debt secured debt. You are using your house as the collateral. If you don't pay your second mortgage, your mortgage can be foreclosed upon and your house can be taken. |
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More articles:
Five Secrets of Debt Management
Credit Card Debt Management Helps You Say Goodbye To Creditors
Debt Consolidation Service
Debt Management for the Future
Debt Management
| American Version of Debt Management Debt Management: Getting the Picture
We all have albums (or shoeboxes) filled with photographs. They collectively make up the story of our lives. Photographs are little moments frozen in time that we can look at and recall whole days, weeks, or months of the good times of our lives.
I say good times because we don't take pictures of the bad times. We all enjoy going through those photographs and revisiting happy times of the past.
If we could take snapshots of our financial lives in the same way that we take snapshots of friends, relatives, and the happy moments in our lives, maybe it would help us to remember financial good times as well. It would be nice to remember what we did that was right so that we could avoid making mistakes today and tomorrow, wouldn't it?
If you could look at a photograph of your checkbook that was taken BCC (Before Credit Cards), you would see a balance that you felt so good about. Maybe it wasn't a really big balance, but it was a balance, nevertheless, and it was there after you had paid every debt that you owed. You had money left over...remember that?
It would be nice to see a picture of your savings account, too.
You can make new memories of positive checking account balances and savings account balances once you get control of your out-of-control debts. The way to do that is to just bite the bullet, so to speak, and seek professional help.
Choose a consumer credit counselor and let him or her help you to get your financial life back on the right track so that you can again experience the good financial times that you once had. There isn't a shortcut, and the trip back may not be painless, but it can be accomplished. |
Related Topics: The Debt Management Plan,
The Virgin Consumer and Debt Management, Easy Credit and Debt Management
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