Stop Debt Collectors

Can you stop debt collectors ? . . .You better know you can

You can stop debt collectors under the law provided by the Fair Debt Collection Practices Act. If you use credit cards, owe money on a personal loan, or are paying on a home mortgage, you are a "debtor."

If you fall behind in repaying your creditors, or an error is made on your accounts, you may be contacted by a "debt collector." You should know that in either situation, the Fair Debt Collection Practices Act requires that debt collectors treat you fairly and prohibits certain methods of debt collection. Of course, the law does not erase any legitimate debt you owe.

What debts are covered?

Personal, family, and household debts are covered under the Act. This includes money owed for the purchase of an automobile, for medical care, or for charge accounts.

Who is a debt collector?

A debt collector is any person who regularly collects debts owed to others. This includes attorneys who collect debts on a regular basis.

How may a debt collector contact you?

A collector may contact you in person, by mail, telephone, telegram, or fax. However, a debt collector may not contact you at inconvenient times or places, such as before 8 a.m. or after 9 p.m., unless you agree. A debt collector also may not contact you at work if the collector knows that your employer disapproves of such contacts.

Can you stop a debt collector from contacting you?

You can stop a debt collector from contacting you by writing a letter to the collector telling them to stop. Once the collector receives your letter, they may not contact you again except to say there will be no further contact or to notify you that the debt collector or the creditor intends to take some specific action. Please note, however, that sending such a letter to a collector does not make the debt go away if you actually owe it. You could still be sued by the debt collector or your original creditor.

May a debt collector contact anyone else about your debt?

If you have an attorney, the debt collector must contact the attorney, rather than you. If you do not have an attorney, a collector may contact other people, but only to find out where you live, what your phone number is, and where you work. Collectors usually are prohibited from contacting such third parties more than once. In most cases, the collector may not tell anyone other than you and your attorney that you owe money.

What must the debt collector tell you about the debt?

Within five days after you are first contacted, the collector must send you a written notice telling you the amount of money you owe; the name of the creditor to whom you owe the money; and what action to take if you believe you do not owe the money.

May a debt collector continue to contact you if you believe you do not owe money?

A collector may not contact you if, within 30 days after you receive the written notice, you send the collection agency a letter stating you do not owe money. However, a collector can renew collection activities if you are sent proof of the debt, such as a copy of a bill for the amount owed.

What types of debt collection practices are prohibited?

Harassment. Debt collectors may not harass, oppress, or abuse you or any third parties they contact.

For example, debt collectors may not:


use threats of violence or harm;


publish a list of consumers who refuse to pay their debts (except to a credit bureau);


use obscene or profane language; or


repeatedly use the telephone to annoy someone.

False statements. Debt collectors may not use any false or misleading statements when collecting a debt. For example, debt collectors may not:





falsely imply that they are attorneys or government representatives;



falsely imply that you have committed a crime;



falsely represent that they operate or work for a credit bureau;



misrepresent the amount of your debt;



indicate that papers being sent to you are legal forms when they are not; or



indicate that papers being sent to you are not legal forms when they are.





Debt collectors also may not state that:





you will be arrested if you do not pay your debt;



they will seize, garnish, attach, or sell your property or wages, unless the collection agency or creditor intends to do so, and it is legal to do so; or





actions, such as a lawsuit, will be taken against you, when such action legally may not be taken, or when they do not intend to take such action.

Debt collectors may not:





give false credit information about you to anyone, including a credit bureau;



send you anything that looks like an official document from a court or government agency when it is not; or



use a false name.





Unfair practices.

Debt collectors may not engage in unfair practices when they try to collect a debt. For example, collectors may not:





collect any amount greater than your debt, unless your state law permits such a charge;



deposit a post-dated check prematurely;



use deception to make you accept collect calls or pay for telegrams;



take or threaten to take your property unless this can be done legally; or



contact you by postcard.





What control do you have over payment of debts?

If you owe more than one debt, any payment you make must be applied to the debt you indicate. A debt collector may not apply a payment to any debt you believe you do not owe.

What can you do if you believe a debt collector violated the law?

You have the right to sue a collector in a state or federal court within one year from the date the law was violated. If you win, you may recover money for the damages you suffered plus an additional amount up to $1,000. Court costs and attorney's fees also can be recovered. A group of people also may sue a debt collector and recover money for damages up to $500,000, or one percent of the collector's net worth, whichever is less.

Where can you report a debt collector for an alleged violation?

Report any problems you have with a debt collector to your state Attorney General's office and the Federal Trade Commission. Many states have their own debt collection laws, and your Attorney General's office can help you determine your rights.


By Omar M. Omar

Learn The Five Key Debt Reduction Steps You Must Take Immediately!

Step 1. The purpose of this first step is to bring you back to reality. You must know exactly how much money you owe and to whom you owe it.

* Collect all of you unpaid bills and any other evidence of your outstanding debts.

* List each outstanding bill on the same sheet of paper. In separate columns, include the invoice or account number, amount due, name of the creditor, and the date the bill can be paid in full without incurring additional finance charges.

* Total the amount due column.

* Total the number of creditors.

* Total the number of bills.

Are you surprised or shocked? Of course, most will be shocked by the scope of their debt. Regardless of your reaction, you now (perhaps for the first time) have an exact accounting of your current debts. Debt help Considers this to be your guide, because it shows exactly how much money you currently owe, and by what date you must pay.

Step 2. This step employs a powerful visualization technique that actually enables you to visualize an end to your current debts.

* Mentally consolidate your bills. Do not think of your debt as a series of separate bills. Consider all your bills as one large bill to be repaid. As you diligently repay each component bill, your large bill becomes smaller.

* Mentally consolidate your payments. Do not consider your individual payments towards separate bills, consider them one large payment towards your one large bill.

* Debt help shows why you must continue making the same size payments regardless of how many bills are repaid. As bills are paid in full, more money is available to pay other bills, but only if your payments remain the same.

* You must pay your bills in the order of their higest monthly payments. This allows you to apply the most amount of money to the next bill and reduces your debts in the shortest amount of time.

If your large bill becomes smaller each time you make a payment while the size of your payments remains the same, the net result of this strategy is that each successive payment has a greater impact upon the size of your debt.

Debt Example: Say you have two bills, one for $250 and one for $750. Together they total $1000. You can afford to pay $500 per month. If you pay $250 towards each bill, the small bill will disappear after the first payment and the larger bill is reduced to $500. You still have $500 available for the next payment. If you maintain the same size payment, you will completely eliminate the remaining bill with the next payment.

Step 3. Now it is time for a course correction - you must alter your spending habits. Regardless of the cause, be it problem debt or chronic debt, you must be willing to change your spending habits and if necessary, seriously alter your lifestyle.

* Establish your long-term financial goals. It took months or years to reach your current level of debt. Since you cannot wish yourself out of debt nor can you count on winning the lottery, you must adopt, reasonable financial goals. The more you pratice meeting even limited financial goals. The more confident and in control of your life you will feel. This in turn enables you to meet longer-term goals successfully.

* Establish credible short-term goals. Short-term means tomorrow! Durning the next 24 hours you are not to incur any new debt.

* just get through one day, then another. You get the idea. The impact of this - trail by fire - is to immediately boost your confidence by preventing your debt from expanding. This prepares you for the serious commitment to complete debt reduction ahead of you.

* Establish realistic intermediate term goals. These goals should find you becoming comfortable with the basics of debt reduction. Your goals are to implement the plan, grow more confident as you watch your debts grow smaller and begin to realize that you can become debt free.

* Establish, well defined, long term goals. As you master these debt reduction techniques , you will be firmly committed to effecting, permanent chance in your financial condition. Not only can you see yourself debt free sooner, but also you can realistically see yourself accumulating wealth. You are in control of your financial well being. You are no longer a debtor - with debt help you are on the road to complete debt freedom!

* Prioritize your spending. Eliminate impulse purchases. Buying on impulse addresses your wants not your needs. Seek alternative methods to pay for goods and services:

* Barter: You may be able to barter anything of value including your time, for something of value to you.

* Learn to live with less. you must learn to live with the extremely limited financial resources you have available, instead of the unlimited ones you pretended you had. Remember, a sacrifice is a trade-off. You give up something now; you are rewarded later. Denial, on the other hand, has no reward. it is punishment.

Step 4. Remove access to any credit you may still have. During this entire debt reduction program you must learn to steer clear of bad habits. You should no more try to conquer debt while you have access to credit, than you would pilot a rowboat thru a hurracine.

* Lockup, return, revoke, cancel, desroy or otherwise make unavailable to you all the remaining sources of credit: credit cards, revolving lines of credit and credit extensions.

* If you feel you need to keep a credit card for identification purposes such as when you pay by check, then choose the card with the least available credit remaining on it.

* Become your own banker. Do not carry your checkbook on your person. Write yourself one check every week. This is your allowance. Cash the check and live on it.

* Every time you receive an offer of credit in the mail, immediately tear it up and throw it away. Do this even if you have to make a special trip to the incinerator or the dumpster in the middle of a blizzard!

Consumer credit is the most insidious type and the most Difficult to give up. As you know, you will be continually bombarded with new offers of easy, often pre-approved credit. You must ignore them at all cost. By this almost surgical removal of your access to credit you will come to realize the power of the word NO! And you will become more comfortable saying it.

Step 5. Use Cash Only!

* Pay cash for everything. If you do not have enough cash to pay for an item, you cannot afford it. Anticipate your expenses now, so that you will have enough cash on hand.

* Now if you do not have enough cash on hand, then cash a check at your bank or make a withdraw from your savings account. Either way, you will need to immediately deduct the amount from the remaining balance.

* If your account is overdrawn at the bank, please stop writing checks immediately. If you do not know how to balance your checkbook, do not write any checks until you learn how to do it. You must be absolutely sure there is enough money in the account to cover every check issued. Under no condition may you bounce a check. Aside from any criminal liability and negative credit reporting you may be subjected to, you will have to pay an overdraft charge. This may be as much as $50 and will be deducted automatcally from the balance in your account. You also amy be liable for a merchants return check fee. Which can be as high as $25 to $50 per check.

* Do not apply for overdraft protection at your bank. Because this is a line of credit with a high intrest rate, you will be tempted to abuse it.

Living on cash teaches you to prioritize your spending. Since you can no longer buy anything you want whenever you want it, you must focus on what you really need. Ask Yourself: Since I am paying cash, is this something I absolutely must have? Am I really willing to forego something else in order to pay for this item now? Learn not to feel denied. Instead, think of the sacrifices you are making to achieve your long-term debt reduction goals. In order to eliminate your debts, you must satisfy your needs not your wants. There will be time to buy what you want after you are in control of your finances.

by Vincent Dail.

Craving For Financial Freedom

Have you ever felt trapped in a Rat Race and wished to retire quickly but rich?

Have you ever felt that you are spending way too much time working with your boss at your office instead of with those you love? Your spouse, children, friends?

Have you ever felt frustrated because you are so deep in debt that you think you won't be able to retire because as soon as you do, the money will stop coming and thus you won't be able to pay off your mortgages and credit card?

Have you ever felt that you have no control over your life anymore in terms of time? Think about it: can you take a vacation just anytime whenever you want/ need it and as long as you want/ need it?

Have you ever wished that you can work whenever you want and wherever you want?

You are not the only one!

Too many people are trapped in a Rat Race because they have to. There are too many bills to pay, and too many dreams to fulfill. To them it seems that there is just no way to quit their job and enjoy life, travel and see the world with their loved ones.

Most people work because their bills tell them to, not because they really love to do it. Most people enslave themselves to their debt or job, because (they think) they have no choice.

This is when the craving for achieving financial freedom come in.

Freedom to choose when to work, without worries about income cuts. Freedom to spend more time with your loved ones, without worries about your employment or your boss. Freedom to take an expensive vacation, without worries about retrenchments thereafter. Freedom to do what you like, instead of what you've got to do, without worries about whether or not what you like generates enough income for you.

If you seriously crave for financial freedom, finding a better job with a higher paycheck is not going to work. Higher paychecks would usually mean more expensive lifestyle, more needs, more mortgages you THINK you can afford, more responsibilities thus more working hours and more time to spend at the office instead with your loved ones. And there is always the same problem: as soon as you stop, the money stops.

If you understand this, you will come to see that financial freedom is not measured by how much money you make by working, but by how long your money can support your normal lifestyle when you stop working.

And financial freedom is definitely not about accumulating abundant riches. It is about a golden chance to live abundantly!

Imagine! With financial freedom, you will have more quality time to spend with your family and friends. You will have more control over your life to do whatever you want, whatever you love, whatever you're passionate about. You will be able to give more, help others, make your part of the world a better place to live! You will be able to spend as much or as little time with your business as you choose. You will be able to come and go at will.

What a great chance to live abundantly!

Is craving for financial freedom realistic? Yes it is. It is not impossible to achieve it. Ordinary people have achieved financial freedom. They may not have their own luxurious yacht, but they have the time and the money to take their family on an expensive cruise to the most expensive spot on earth.

There are basically only two fundamental things ordinary people have known for decades to achieving financial freedom:

1. Manage your time and money! Time and money are the only two factors that keep people from achieving financial freedom.

To duplicate the success of people who have reached financial freedom, you do not need to have self-confidence, super intelligence, high education, great luck, hard-work or great career path. Although those are all good characteristics, they are not fundamental to achieve financial freedom.

All you need is a good time and money management, which would also result in high productivity!

Invest your time in creating extra money that you can later invest. You can do that by taking up a part-time job or working overtime.

As soon as you have more extra income, be a responsible manager of your own money! Live less than your income so you can start investing. It is from investing in a business that will one day generate income for you and sets you financially free from having to work for a living.

As much as possible avoid borrowing money for anything at all. I believe everybody has been taught about the negatives of being in a debt, but very few have been taught to consider the benefits of being debt-free.

By being debt-free, you will have more money to invest. Ask yourself this question: how difficult would it be to create an extra $1,000 a month by cutting expenses and by investing the money you normally use to pay your debt?

2. Start investing in your own business to create passive income! Passive income is income which requires little or no work at all. The example would be writing a book and get paid forever on it, traditionally investing huge capital or starting your own business.

As a passionate home-business owner myself, I believe that having your own home-business is by far the most powerful way to create passive income. It takes only small start-up capital and you will have extra tax benefits.

It is easier to generate passive income by having your own business than by traditionally investing. If your goal was generating $40,000 annually you would need $1,000,000 to invest at 4% interest. Very few people have this much start-up capital.

But there are many ordinary people who have become home-business entrepreneurs and generated $40,000 annually by investing very small capital.

Finally, quoting Robert Bolton, "A belief is not merely an idea that the mind possesses; it is an idea that possesses the mind", the idea that even ordinary people like you can achieve financial freedom should possess your mind and you will not be denied.

By Dinar P. Wiria-Atmadja

Reducing Debt Before Its Too Late - How to Avoid the Pitfalls of Creeping Debt

Reducing debt usually isn't a high priority for people until they have already gotten into trouble with overspending. Using a few basic guidelines, and debt calculations, can help you see when your debt load is getting into the danger zone.

Budgeting Guidelines

Creditors use budgeting guidelines when reviewing and approving credit. If your debt exceeds the financial communities recommended guidelines, then you have a higher risk of credit applications being denied.

Getting, and keeping, your debt in line with recommended budgeting guidelines, is an important step in debt reduction.

Use the following recommended budgeting guidelines (the same ones used by Financial Institutions) to review the items in your budget:





Housing 35% - Mortgage or rent, taxes, repairs, improvements, insurance, and utilities;



Transportation 20% - Monthly payments, gas, oil, repairs, insurance, parking & public transportation;



Debt 15%* - Credit cards, personal loans, student loans & other debt payments;



All other expenses 20% - Food, insurance, prescriptions, doctor & dentist bills, clothing & personal;



Investments & Savings 10% - Stocks, bonds, cash reserves, retirement, rental real estate, art, etc.

Debt Income Ratios

The second step is calculating your debt income ratio. Once you know what your ratio is, you will understand just how important debt load is to your overall financial picture. Your debt income ratio is the percent of your monthly take-home pay that goes to paying debts.

You calculate it by taking the amount needed to repay debts each month, including rent or mortgage, and divide by your take-home pay (your net pay after taxes). Remember, this is "Debt" ratio, so only include actual debt repayment in the calculation.

Credit To Debt Ratio

Just because you pay off a credit card is no reason to close your account. One little known fact about the Credit to Debt Ratio is the reverse effect it has on your credit score. If you pay off a credit card, and close the account, you are actually negatively impacting your credit score.

The reason for this negative effect is in the calculation of the Credit to Debt Ratio itself. This ratio is the relationship of your debt total vs. your credit limit.

You calculate it by dividing the total credit limit of all credit cards and loan accounts by the total of the actual debt (spent total). Now, if you pay off a credit card, you are reducing the actual debt, which is great, but, if you close the account, you are also dramatically reducing the credit limit you have, and usually by a higher percentage than the debt reduction.

Pay Yourself First

Essential to long-term financial success, and protecting your future, is paying yourself first. While this may seem easy to do, it happens to be the last thing most people do, instead of first. Debts and other financial obligations, money for entertainment, and other spending always seem to take a higher priority. All I can say is, STOP! Think about it, if you aren't worth being paid first, then who is? Always put something away in your savings, and leave it alone. It doesn't matter if it's only $5 a week, just do it!

Snowball The Credit Cards

Last, but not least, is making extra payments, not just the minimum payments, on your credit cards. You have probably already seen this many times, but it just can't be stressed enough. Paying just $10 extra a month on a credit card, above the minimum required payment, can cut your repayment term in half, if not more! So, squeeze out that extra payment, however small, every month, and take advantage of the compounding effect of snowballing your debt away.

The Power of Financial Knowledge

Remember, you don't have to be a financial whiz to understand what's going on with your credit and debt. Just a few simple calculations, and an eye on the future, will go a long way to help you succeed financially and keep your debt under control. Be safe, be smart, do the math!

Related articles:

Compare the pros and cons of debt consolidation loans, service companies, and credit counseling.

The Debt Free Lifestyle

Many people have been taught that you cannot get ahead without debt. We are also inundated with advertising telling us we can have anything we want. All we need to do is put it on our credit card.

We have become an impatient society, we want it right now. We have lost the ethic of working for what we want.

It is not how much money you make; it is what you do with it. By living without debt you can actually have a higher income since you are not paying out interest, you are actually getting paid interest on invested money.

All debt is not created equal. We will classify them as good debt and bad debt.

To simplify the classification we will say that good debt is a loan for something that you could sell at any time and repay the debt. This narrows down good debt to a home loan and possibly a home equity loan.

A bad debt, of course, is a loan on anything that will lose value.

Let's take a look at some debts that we would consider bad debt.

Home equity loans are in the gray area. They could be considered good debt if they are used to repair or improve your home, but you would be a lot better off to just save up the money for the project. Home equity loans become bad debt when used for purposes other than home improvement or maintenance. In other words a bad home equity loan is for anything that does not add to the value of your house. Do not jeopardize your home by taking out a home equity loan on unnecessary items.

One possible good use for a home equity loan is when the interest rates are low. You can use a home equity loan to refinance your mortgage. Home equity loans generally have lower costs than conventional home loans.

We consider school loans bad debt. If you finish school, get a good high paying job and then attack the loan like mad, a school loan may work out. The problem is that there are too many things that can go wrong. At best, even if you do graduate and get a good job there are always a lot of other expenses at this time in ones life. You are really behind financially when you start your working life in debt.

Auto loans are bad loans that have become common practice to us. We pay interest on a vehicle that will only be worth one half of its original purchase price in five years. Lately it has also been common for us to borrow more than a vehicle is worth. We can trade a car in that we still owe on, and roll that owed amount over into another vehicle. This gives us a loan amount that is higher than the value of the car that we drive away. We have lost our capacity to say NO.

Co-signing is a bad debt that usually and unfortunately involves family. If someone cannot qualify for a loan at a regular lending institution, they should not get a loan. The fact that they can't qualify for a loan elsewhere should tell you that they are a huge risk. Use this opportunity to teach them how they can get what they want by working harder for it and delaying the purchase.

If you want to get off of the debt treadmill, you must run as far away from debt as you can. You cannot use debt to get out of debt. Even if you do, you have not changed your habits; you must change your lifestyle.

By John Cook

Debt is The Master of Souls

Wholeness requires separation. In order for you to experience yourself as being whole, you spend most of your live experiencing being separated, trying to get back to wholeness.

One of your most creative ways of moving away from happiness has been through consumer debt. Your fixation with spending, gives you little time to contemplate being whole, until it hits you in the face with a debt load that you can no longer manage.

The Black Plague of the industrialized world is debt for consumer goods and services. No matter how you may reason it, going into debt to buy a big screen TV or stereo system, a new boat, or lawn furniture, just is not necessary. You have been taught that all of these things are necessary to be happy and successful. You have moved away from happiness in order to feel it again by learning how to be miserable. Now that you are up to your ears in bills, you think that you would be happy again, if only you did not owe all this money.

As adults, you spend one third of your lives paying of loans and mortgages, another third of your life paying taxes. The last third is supporting someone else. The fourth third you get to keep for yourself. Debt is the majour contributing factor in marriage and business break-ups. Where is there room for happiness in this chaos?

Consumerism feeds the fat pockets of debt. It is like bulimia, you eat and eat and eat, then puke it all back up, only to start over again. Consumerism is the industrialized world's version of happiness. Because humanity has moved so far away from happiness, he no longer understands what it is, and believes that "things," make him happy. He cannot live without things. Because he is unhappy and notices that other people appear to be happy with their things, he believes that if only he had one of those, he would be happy also.

The insanity is that you have been collectively doing this thing repeatedly for so long, you do not believe you can be happy without spending and going into debt. Humanity has not learned from this mistake. You cannot buy happiness. You must be happy first, and then your spending will reflect that happiness and will not be dependant on the spending.

Debt is the cancer that kills your happiness. Move away from spending and debt and get in touch with your true feelings and basic needs. When you begin to move to this place of wholeness, you will never do anything that could jeopardize that happiness. Money does not buy happiness in place of a failed belief system. At best it is only a temporarily relief like debt consolidation until you start the cycle over again.

Life lived simply, allows lots of room for happiness, it is the playground of happy people. Happiness comes naturally to all beings at birth; you then learn how to be unhappy before you can move back to the experience of happiness.

By Roy E. Klienwachter

Bankruptcy - The Easy Option?

Incredibly, since the changes in the bankruptcy law in April 2004, debtors are more likely to petition for their own bankruptcy rather than their creditors! You would think that most people who have been threatened with the prospect of being made Bankrupt would be riddled with fear of the possibility. It is more widely referred to as the "Big B" rather than the dreaded word itself. However, is this a thing of the past? Since the changes in The Enterprise Act 2002 took place in April 2004 it would appear a lot more people are inclined to petition for their own bankruptcy as a solution to their debt problems.

It appears that more people are choosing to go for Bankruptcy as they think that within one year of a Bankruptcy order being made, they could be debt free. Unfortunately, things might not be as simple as that and it would be wise to find out what options are available before taking the plunge.

In some circumstances, Bankruptcy is the best option, but that is only some circumstances, not all. Even in Bankruptcy, you are still required to make payments from your income for up to three years, if you have a reasonable surplus. The Official Receiver (OR) also has the period of three years (not one year) to stake his claim on your residential home and if there is any equity in your property within that time period, the Official Receiver is likely to claim it.

Considering Bankruptcy?

For some people, Bankruptcy really is the only way out. There are numerous reasons why people find themselves in this situation. If you know you are unable to repay your creditors; you have no assets and there is no prospect of you making reasonable offers of repayment to your creditors, then petitioning for Bankruptcy could be right for you.

What Happens when a Petition is made?

Petition for Bankruptcy is made in one of two ways. Either you will make a petition yourself at a cost of £450, or your creditor will make a petition against you. If a creditor decides to make a petition for Bankruptcy, they would be responsible for showing that you either could not or would not repay the debt owed to them. Unless the petition was significantly disputed, it is likely that a Bankruptcy Order will be made.

Before the legislation changes in April 2004, if a Court believed that you could afford to make reasonable offers of repayments to your creditors, an Insolvency Practitioner would be appointed to look into your affairs and make a report to see if you were willing to make proposals to repay your debt. Your creditors would then be requested to consider your proposals. This has now changed?

If you make a petition for Bankruptcy, the Court will assume you have taken advice and you know you cannot repay your creditors. Therefore, a Bankruptcy order will be made. However, once the order has been made, an Official Receiver will then look into your state of affairs, and if the Official Receiver believes you do have the facility to make reasonable offers of repayment, they may refer you for a Fast Track IVA.

The cost

In order for you to petition for your own bankruptcy, it will not only cost you £450, but, the process will take up a lot of your time and possibly cause you a great deal of stress. Even after the bankruptcy order has been made the Official Receiver (OR) could decide that a Fast Track IVA would be more suitable. If that happens you have basically lost £450 and caused yourself a lot of unnecessary stress.

So what should you do?

Before petitioning for your own bankruptcy, you should get an assessment of your financial situation. It is definitely advisable to get an assessment done before making a petition rather than an Official Receiver making the assessment after a Bankruptcy Order had been made. Companies such as FCL Debt Clinic can offer you this assessment with no charge! You will be informed of all options that are available and if a more suitable route can be taken in order to avoid the implications of Bankruptcy, this will be advised as another way to resolve your situation.

By Nicola Bullimore

How to Get Triple A Credit in 25 Days

Good credit is everyone's dream. A wise use of credit can go a long way. It certainly makes certain goals in life (like acquiring business loan from bank) easily attainable.

But the key question remains: "What does it take to achieve 'Triple A' credit?"

First and foremost, it is important it is critical to point out where most people go wrong when it comes to their credit and credit report.

People with bad credit will usually seek credit repair help. Most would seek credit expert advice and few will try to do it themselves by purchasing a credit repair book.

Mainly, the problem is not the type of help you hire, rather the assumption you are left with after the whole credit repair process.

Where most people go wrong is that once their credit report is free of any negative entries (or errors), they simply assume that they now have an excellent credit.

That's simply untrue.

In reality, your credit is not bad because you now have managed to erase the negative entries that was shown on your credit report before. At the same time, you do not have ' Triple A ' credit either.

Unless, you have positive items or entries showing on your credit report.

And the key to a successful credit repair is not just getting rid-off the negative entries on your credit report, but rather to show-off that you have multiple positive entries on your credit report that can buy the confidence of your bank to loan you their money.

You can find numerous articles dedicated to guiding through the credit repair process, but few will discuss further than just repairing your credit. Meaning few will tell you (better yet, know about),

"How to add positive entries to your credit report?".

It is very important you understand that, you can repair your own credit and make it flawless, better than anyone ever could. Today, there is so many help on credit repair help, but not all are legitimate help. And it is extremely important to keep that in mind.

If you want to avoid getting chopped-down by bogus repair companies, take the following two statements as an advice that will serve you a long way.

1- There is no law available to any credit repair company, expert, or attorney - that is not available to you as the credit consumer.

2- Credit repair companies use the same law made available to you by congress to repair your bad credit. And they certainly can not change the law for their clients.

The above two simple statements might seem obvious, but repeating them like a mantra can be the difference between getting ripped-off and getting the 'Triple A' credit you deserve.

Back to the main point - "How To Achieve Triple A Credit?"

Here you will learn two powerful and proven ways that will give you a sterling credit in the shortest time possible - 25 Days. Apply the following two techniques and, guaranteed, you will give your credit a face lift that would have banks open their check book.

1. A Millionaire's Credit in 25 Days.

Do you have a checking account and a savings account? Good. If you don't, no worries, these days you can open an account online. It should take you no more than 5 minutes. You got your accounts opened? Good, now comes the second phase.

Phase 2: Now you will need your savings account to use it as a collateral. Now using your savings account ask your bank for a secured passbook loan.

You can borrow a dollar for dollar with a passbook loan. This type of loan works well with as little as $300, but if you have $10,000 - that's even better. Once you secure a loan with a passbook you can not touch the funds until you have fully repaid the loan. Remember, you should be able to do with-out these funds for 30 days.

A bank secured with your passbook loan has no risk in lending you money, so any bank should be willing.

Note: It is extremely important that the bank reports your loans to the credit bureau. Therefore ask your bank "If they report your payment history to the three credit bureaus?", it is critical part of this whole process.

After all, the whole purpose of you doing this is to add zing to your credit report with a very powerful and positive payment history, right?

Now once you borrow the money, wait 25 days and repay the loan back to your bank. Because you have fully repaid your loan the bank will send your positive payment history to the credit bureau.

That's a grand slam!

Now you have the bank as your friend and the credit bureaus can not help it but report your good payment history.

2. How To Use $500 - $1000 into A Millionaire's Credit.

With let's say a $1,000 in your account, ask the loan officer for a 12- month a $1,000 passbook loan. Do not be discouraged, you can certainly achieve this with less money, but if you can afford to do it don't hesitate.

By the time you're done with this technique - - - well it'll be all worth it. Just wait and see. Since this is a secured passbook loan (meaning, it is secured by the amount of money available in your savings) most banks will not run a credit check. And if they tried to do so explain it to them why they should not as it is secured by the money you already have in your savings account.

Which you won't be able to access until you payoff your loan anyway, so there is no justified reason to run a credit check.Now with the $1,000 secured passbook loan from your first bank, open a savings account at another bank with the $1,000 loan received from the first bank.

The request that they give you a $1,000 12-month loan and do not mention the loan received from the first bank. Wait about a week or two, go to a third bank and repeat the process.

Next, at one of the three banks open a checking account with the $1,000 you received from the third bank. You now have a$1,000 in a checking account and three outstanding 12-month loans at three different banks - for a total of $3,000. Deduct your original $1,000 and you need only repay $2,00 plus interest.

Note: Make sure that you ask your bank if they have a pre-payment penalty because you do not want that.

Finally, about one week later start to pre-pay your three loans.

Now you have an advance payment record with three banks and will have established powerful credit for your credit report. From now on every type of loan and credit card will be yours for the asking.

Here you are with un-touchable credit, three big banks as your future business friends, and a credit bureau reporting positive payment history - all in just under 30 days. You just learned about one of the very few techniques that can change your credit significantly within a month time.

Of course you can apply these techniques for as long as you like and keep improving your credit. Apply these techniques discussed and you will get the Triple A credit you deserve.


By Omar M. Omar

Debt Recovery Can be Easy

OK, so you are up to your head in debt. You are stressed out, it is now affecting the way you function and absorbing most of your daily thoughts. You have no idea what to do.

OK, first things first. Take a step back and try and look at things with a clear head. Your debt is manageable. If you have many bills and just can't afford them all, the first thing you should consider is a debt consolidation loan.

A debt consolidation loan will help you out by consolidating all of your debt into one monthly payment that you can afford.

Second of all, figure out what is an affordable amount of money, that you can afford to pay monthly. You want this to be a fair amount of cash, however you still need to account for some money for yourself to prevent yourself from slipping further into debt.

The next step is to cut up your current credit cards. I know I've fallen into this trap on numerous occasions; I didn't cut up my credit cards and planned to use them for 'EMERGENCY ONLY'. Well, a few months roll by, and that new shirt, and that tank of gas add up to ANOTHER full credit card. If you no longer have credit cards, you can't be tempted to use them.

Finally, you need to correct the problem by killing it at the root. Start saving 5-10% of your income and start saving to purchase those things you want or need. The immediate gratification of making a purchase will wind up haunting you in the long run. Rationalize every purchase and try to take into consideration if this purchase is a rational one or one based on emotion. If it is based on emotion, think about how purchasing this item will make you feel, then imagine the stress of being in debt. If you managed to make your way out of debt at least once in your life, I'm sure your urge to purchase this item will quickly fade.

Follow this simple outline, and your journey to become debt free will be under way.


By Ryan McKenzie

Credit Repair - Understanding The Basics

What is Credit?

Credit means that you are using someone else's money to pay for things. It also means that you are making a promise to repay the money to the person or company that loaned you the money.

Whenever a person applies for a loan, mortgage, a credit card or for any other purpose for which he needs to borrow funds from a lending agency, the agency will check the financial credit-worthiness of the person and based upon its assessment of the financial risk involved in the deal, the agency will decide upon the terms and conditions of granting credit. A positive assessment necessitates a sound financial background and a credit history with no bad remarks.

What is Credit Repair?

'Credit repair' is a process in which consumers with unfavorable credit histories attempt to re-establish their credit-worthiness. The process usually involves procuring a credit report from the rating agencies and then taking appropriate steps to address any apparent issues such as errors, omissions, misinformation, misreporting or misinterpretation. A consumer can then formally dispute those errors or issues which unjustly distort their financial healthiness and credit-worthiness. Various laws and regulations designed to ensure legal and fair undertaking of the credit repair process can then be utilized to formally and legally start the credit repair process.

Consumers are entitled to a copy of their credit report legally, if they have been denied a credit card or loan and if the information provided on the report is inaccurate, an investigation relating to true facts is necessary for a credit repair.

Why Repair Credit?

A consumer's credit record significantly influences his future purchasing power and his eligibility of availing any credit facilities in the future. A good rating, or score, can insure a low interest rate and loans for longer term for various purposes like credit card balances, car or home loans. A poor rating makes a consumer vulnerable to finance companies charging exorbitant interest rates and imposing various unnecessary repayment and loan terms. Considering the stakes and the consequences involved, it is absolutely imperative for consumers to understand the importance of repairing their bad or low credit ratings.

The Safe and Legitimate Way to Repair Credit

Credit repair can only be achieved through financial discipline and hard work. Any easy way out of a poor credit history is undoubtedly tempting, but it may lead to further financial difficulties in the future.

If a poor credit history is due to circumstances beyond a consumer's control, and they are able to somewhat make amends to their credit records after that time, then a creditor can be requested to upgrade credit rating because of a sense of customer loyalty.

Most creditors don't trust the customers defaulting on their debts, so it may be very difficult to obtain new credit. But once a person is able to demonstrate continuing income stability and prompt payment patterns, his situation can improve in a period of two to three years. This way, even in the case of bankruptcy, a consumer is likely to be offered charge and credit cards within a year or two if maintaining a steady income.

What is most important is evaluating the financial situation. If one finds that they are unable to make at least the minimum payment on outstanding accounts, a contact should be made with the creditors. Many creditors will appreciate the willingness to pay and are most likely to help set up plans for repayment. Avoid making promises which cannot be kept as a small payment is preferable to a large payment that never arrives. Sometimes a small contact can be enough to reduce payments and forestall more severe measures.

The next step is consulting a credit counseling agency. These organizations are staffed with trained individuals experienced in the credit field. A distinction needs to be made between these and the commercial "credit repair" companies who claim that, for a fee, they will undertake credit repair.

No one can legally remove accurate and timely negative information from a credit report. But the law does allow one to request a reinvestigation of information in their file that may be inaccurate or incomplete. There is no charge for this. Everything a credit repair clinic will do can be done by a consumer themselves at little or no cost.

The most important factor in credit repair is recognizing the legitimate and viable options available, recognizing what the scams are, and differentiating between the two. A poor credit history can make it difficult to obtain additional lines of credit making consumers fall prey to many unethical programs that target consumers with less- than-perfect credit. There are no quick fixes in credit repair. Common sense tells you that a third party doesn't know your credit history better than you. Through contacting credit bureaus, making your own corrections, consolidating your debts and budgeting, you can improve your own score. You don't need to pay someone to fix it for you. It's better to apply that money towards discharging your debt.

Summary

Understanding the basics of credit repair and knowing what exactly is needed in order to rebuild your credit history goes a long way to getting it resolved. However, you must be disciplined, find the right credit repair solution for you and not be tempted to fall back into debt.

By Claire Bowes

The Effects of Consumer Debt

Consumer Borrowing

Consumer borrowing in the UK has now crashed through the £1 trillion barrier. 80% of this is due to credit card borrowing, loans and mortgages. How are people managing to handle their debt and what effect is debt having on families today?


The National Consumer Council reports that 6 million families in the UK are already struggling to make repayments towards their debt, and Citizens Advice reports that over the last 6 years, they have seen a 44% increase in the number of people seeking debt advice. This may be just the tip of the iceberg. There must be many families in the UK who have debt problems, but are not aware of the free help and advice available.


Tackling Debt

According to a DTI survey carried out in 2002, a household is likely to be over-indebted if:


25% of your annual income is spent on repaying Creditors



50% of your annual income is spent on repaying credit and mortgages



You have 4 or more companies that you owe money to.


People find it difficult to make repayments for a number of reasons. Generally, the underlying cause is some kind of change in personal circumstances such as job loss, divorce, illness or a new baby. In these instances some people may resort to more borrowing in order to pay creditors or household bills. This is not always the best option.


Effects of Over-Indebtedness

The personal effect of struggling to repay debt can be far reaching. Sometimes a lack of financial awareness can lead to stress, depression, anxiety, mental health problems, relationship breakdown and even suicide.


Raising Financial Awareness

The Government recognise the need to raise financial awareness amongst the general public. The financial cost of debt is not only on an individual level, but there is also a cost to society in general.


People who experience stress due to their situation, will probably seek advice from their GP and may take time off work, therefore, this has an effect on already hard-pressed NHS and productivity due to absenteeism.


People who have had homes repossessed need to be re-housed, generally by the local Council. Those who seek legal aid due to debt issues also incur a cost to the taxpayer.


The Solution before the Problem

Will raising financial awareness alone tackle the issues of debt problems? It helps for people who are already struggling with debt, but are there other areas the Government should be looking at?


If you pay your creditors on time, regardless of what it takes to pay them, you are classed as a good payer and therefore, not a risk when it comes to additional borrowing. In fact, your finances could be in turmoil and you could be taking money from one card to pay another but you may still obtain even more credit.


The freedom creditors have to advertise loans, credit cards and mortgages could be challenged as well as how decisions are made regarding lending.


If people, who are currently in financial difficulty, find they cannot borrow more money, they should be made aware of the free financial advice that is available. Free Debt Management Companies such as Payplan can negotiate repayments with creditors so that monthly payments are reduced and become more manageable.

Nicola Bullimore

Debt and Your Dreams

You may not realize what that credit card bill is doing to you?

Bob is a 27 year old truck driver. He dropped out of college after one year and got a job. With hard work and good luck, he is making about $35,000 a year. Bob is passionate about remaining debt free. He drove his old car from high school until he could afford to pay cash for a newer one. He rented a cheap apartment until he saved a solid down payment on his house. Even during the lean months, he steadfastly refused to build up a credit card balance he couldn't pay off at the end of the month.

At 27, he's decided he's tired of his job and would like to change directions. By living within his means and staying out of debt, Bob has enough money in the bank to take some time off, get a part time job, and go back to school. He has visions of owning his own business one day soon - and there's nothing to stop him.

Now meet John. John is in his 40's and is in upper management with his company. He's making more than double Bob's salary, but he's had a different outlook on life. John has never been afraid of debt - he figured as long as he could afford to pay the bill he was ok. He has a very nice house, a brand new $40,000 car, lots of new sports and recreation equipment, and travels extensively on his vacations. And he's done it all on credit. John was living this lifestyle before he could afford it. Now, he's almost tapped out - his credit cards are maxed out, his house is double mortgaged, and even though he's making a great income, he has lacks the lifestyle, peace of mind, freedom, and opportunity Bob has.

Externally, anyone who saw the two would think that John is the greater success. But the truth is John is trapped. He may be tired of his job. He may want to do something else. He may wish he could spend more time with his family than at work or have a business venture he'd like to pursue. But he spent his money before he had it, and now he's paying the price.

Most of us think that the key to Financial Freedom is making a lot of money, but we see from our two examples that that's only part of the equation. The other part is lifestyle management and debt avoidance or debt elimination. If we plan wisely, stay out of debt, and control our desires to spend beyond what we can afford, we can enjoy a great amount of financial independence and have money to spend on things we really want to have and do, even on a very modest income.

However, for most of us, this message comes too late. Anyone buried in debt will agree that it would have been better never to get into debt. But that doesn't help much now. What we need now is some help undoing the mess we made.

Stay out of debt. If you're in debt get out. Don't take out another loan, declare bankruptcy, or sign up for credit counseling services, which can damage your credit. Instead, do your homework and educate yourself on the steps you can take to get back on solid financial footing, no matter what your present situation is.

---
By Leonard Hopkins

How to Get Money When You Are Broke

(Money You Don't Have to Pay Back)


1. One way to get money is to have a yard sale and sell items
that you are getting ready to toss away because you don't want
them any longer.

2. You can always gather shells at the beach and polish and turn
into jewelry.

3. Get cash surrender from life insurance policy.

4. Paint faces on rocks and sell as paper weights.

5. Go to a pawn shop and pawn some jewelry.

6. Borrow from a relative.

7. Go get welfare pay or food stamps.

8. Dig small trees from woods and sell to homeowners.

9. Learn names of wild plants and plant in pots for sale.

10. Roll newspapers up in logs, tie, dye and let dry... then sell
(fireplace).

11. Cut up old shirts and dresses and make pot holders out of
them and sell.

12. Cut square towels out of old tossed out clothes and sell as
wiping rags.

13. Gather driftwood from the beach areas and sell to craft shops.

14. Paint old used wine bottles and sell as hand painted vases.

15. Go house to house and paint house numbers on curbs for a fee.

16. Take the lawn mower house to house to mow lawns for a fee.

17. Offer to dig or spade gardens for local neighbors for money.

18. Offer to sell fishing (earth) worms as bait - dig in garden
to get the worms.

19. Paint house exteriors in spare hours. Charge prevailing rate.

20. Gather pine cones and sell to craft shops.

21. Turn pine cones into useful jewelry, etc. and sell to shops
or houses.

22. Spray old building bricks gold, sell as "Fort Knox Rejects"
paper weight.

23. Paint bricks a vibrant enamel and sell as toilet bowl
displacements.

24. Fill coffee cans full of plaster, paint all over and sell as
door stops.

25. Gather vegetables from your garden and sell at road side stand.

26. Walk pets for your neighbors for pay.

27. Baby-sit for profits.

28. House sit for vacationers, get extra by upkeeping grounds.

29. Make fudge and sell house to house.

30. Do typing for fellow students or fellow workers for a fee.

31. Type menus for restaurants for a certain amount per menu.

32. Read books and do reports for a fee for students.

33. Research any subject (in library) for $25 a page.

34. Paint scrolls and designs on plates or make birthday plates,
charge $19 each.

35. Teach people to do calisthenics, charge $2 an hour and have
10 at time.

36. Teach dancing and charge $2 an hour, and have 10 at a time.

37. Learn to do juggling and clowning, put on shows for pay.

38. Rent out as a clown to birthday parties, affairs, etc.

39. Get good at telling jokes and rent out to night clubs.

40. Sing for money at night clubs.

41. Make crafts and sell them at road side yard stand.

42. Teach others to make crafts ($2 each) and have 10 at each
class.

43. Bake fruit pies and sell house to house (or in stores at
holidays)

44. Make Christmas wreaths during holiday season to sell, using
discarded boughs from your own and neighbors' Christmas trees.

45. Make Christmas candles from paraffin wax and sell at
Christmas time.

46. Polish shoes for office workers by going office to office once
a day every day and charge 50 cents a shine - lawyers best bet
here. Also see all accountants, clerks, insurance agents, etc.



By DeAnna

Are You Beating Up On Yourself About Debt?

When you hear the word "debt", whats the first thought or feeling that comes to you? For most people debt is "bad" or it becomes the "enemy" and is something that should be avoided like the plague.

Having debt does not make you a bad person. The more a situation is judged as being bad, the worse it gets. It's the judgement that you have around debt, that will keep you feeling "stuck". It's the judgement that brings out the anxiety, the fear, the stress, the knot in the stomach.

It's the old success principle: what you focus on expands. So what are you focusing on? Getting out of debt is an inside job first! What that means is taking 100% responsibility for your debts and admitting to yourself that you have an obligation, and knowing and believing that you will fulfill that obligation, by paying your creditors as quickly as possible.

No one wants to be stressed, or worry about living beyond their means. Most people are very uncomfortable talking about the subject of money and debt. And since the subject of money management is NOT normally taught in schools, where do we learn about it?

From our families, friends, co-workers etc, tv shows. These are people who mean well, and it's been my experience that they are usually passing along information that may be outdated, and no longer relevant for the times that we currently live in and may or may not apply to you and your life. It is THEIR opinions and beliefs.

Once again it doesn't make it a "good" or "bad" thing. The answer is to find a solution that "works" for you and your particular situation. Keep in mind, that once you decide to become debt free, it will become crystal clear that not everyone thinks that becoming debt free is a good idea.

Everyone from your local bank to your grocery store, want you to buy on credit. Realize that "credit" is a tool that can serve you, or NOT serve you. Here are some tips for becoming debt free.

1) Admit that you have debt, and are willing to become debt free. This is the most important step and is part of being 100% responsible, and being open to finding a solution. Without knowing where you are now, you are probably not going to be able to plot out a plan or map to where you want to go.

2) Don't add any more debt. This is all about changing habits, beliefs, and attitudes about buying on credit. Your attitudes about money/credit may have served you up to this point, and the good news is that you can now make new choices that support you. Remember "life" happens and there may be times when you may have to use credit. If this should happen DON'T beat yourself up. Just continue down your path of debt reduction and the ultimate goal of financial freedom.

3) Start to pay off the debt NOW. This seems like an obvious and simple step, and it's simple to do and also simple NOT to do. Afterall we are human beings, and change is not something that we are very comfortable with. Put all your debts on paper, so that you are clear about what you owe. One of the best strategies to debt reduction is the "something-something" principle. Focus on paying (1) creditor off at a time. This will keep your energy concentrated, and your debt reduction efforts will be more effective, than trying to pay off everyone at one time.

4) Take "extra" money and apply it toward your debt. Where can you get the "extra" money? Start to watch where you spend your money. For example: using coupons, or shopping at a warehouse club, can save you thousands of dollars over the course of a year. These savings can be used to pay down your debt quickly and effortlessly.

Keep in mind that your past doesn't equal your future. Look at your current financial situation as a "learning" experience, and an area that you are able to improve on....versus a place that you are judging yourself for a mistake. Many people just like you have been able to eliminate their debt. The good news is....so can you!!!!


By Mario Castagno

Worried About Debts?

Having trouble paying your bills? Getting dunning notices from creditors? Are your accounts being turned over to debt collectors? Are you worried about losing your home or your car?

You're not alone. Many people face a financial crisis some time in their lives. Whether the crisis is caused by personal or family illness, the loss of a job, or overspending, it can seem overwhelming. But often, it can be overcome. Your financial situation doesn't have to go from bad to worse. If you or someone you know is in financial hot water consider the options below. How do you know which will work best for you? It depends on your level of debt, your level of discipline, and your prospects for the future.

Developing a Budget: The first step toward taking control of your financial situation, is to do a realistic assessment of how much money you earn and how much money you spend. Start by listing your income from all sources. Then, list your "fixed" expenses - those that are the same each month - like mortgage payments or rent, car payments, and insurance premiums. Next, list the expenses that vary - like entertainment, recreation, and clothing. Writing down all your expenses, even those that seem insignificant, is a helpful way to track your spending patterns, identify necessary expenses, and prioritize the rest. The goal is to make sure you can make ends meet on the basics: housing, food, health care, insurance, and education. Your public library and bookstores have information about budgeting and money management techniques.

In addition, computer software programs can be useful tools for developing and maintaining a budget, balancing your cheque book, and creating plans to save money and pay down your debt.

Contacting Your Creditors: Contact your creditors immediately if you're having trouble making ends meet. Tell them why it's difficult for you, and try to work out a modified payment plan that reduces your payments to a more manageable level. Don't wait until your accounts have been turned over to a debt collector. At that point, your creditors have given up on you. Managing Your Auto and Home Loans: Your debts can be unsecured or secured. Secured debts usually are tied to an asset, like your car for a car loan, or your house for a mortgage. If you stop making payments, lenders can repossess your car or foreclose on your house. Unsecured debts are not tied to any asset, and include most credit card debt, bills for medical care, signature loans, and debts for other types of services.

Debt Consolidation: If your objective is to reduce interest rates and lower your monthly payments, avoid bankruptcy, consolidate your bills and have one monthly payment, or simply get out of debt the fastest way possible, then a debt consolidation loan could provide the answer.

Are you paying out too much every month for your credit cards, store cards and loans? Then why not replace them all with one, lower, convenient repayment through a consolidation loan?

Consolidation loans can give you a fresh start, allowing you to consolidate all of your loans into one - giving you one easy to manage payment, and in most cases, at a lower rate of interest.

Secured on your UK home, low cost, low rate, cheap, low interest debt consolidation loans can sweep away the pile of repayments to your credit and store cards, HP, loans and replace them with one, low cost, monthly payment - one calculated to be well within your means.

With a Debt Consolidation Loan you can borrow from £5,000 to £75,000 and up to 125% of your property value in some cases.

A UK Debt Consolidation Loan is a low cost loan secured on your UK home. It frees up the spare capital (or equity) in your home to repay your store card and other debts.

It can reduce BOTH your interest costs AND your monthly repayments, putting you back in control of your life.

Debt Consolidation Loan rates are variable, depending on status Your monthly repayments will depend on the amount borrowed and term.

You may freely reprint this article provided the author's biography remains intact:

By John Mussi

Debt Consolidation and Personal Finances: Learn the Truth!

An inability to manage credit, growing debt and bankruptcy are all major problems today. On an average day, over 8,000 people file bankruptcy in the United States alone. The Internet is rife with companies that promise help and salvation; to the uninitiated, their words and assurances prey upon those wanting a painless solution.

The January post-holiday credit card bills are often the proverbial straw that breaks the camel's back, where families now have to face the problem of how to pay for the holiday gifts and celebrations without sliding further into debt.

Avoiding these problems, and recovering from overwhelming debt, are what Real Life Debt.com is all about: it's a resource site that's dedicated to helping you learn about your options with credit card debt, debit cards, debt management, debt counseling, privacy, deciding about bankruptcy (and the different types of bankruptcy), and more.

Founder Dave Taylor explains "As a private, independent initiative, we're sure that you'll find Real Life Debt.com to be an excellent resource for understanding and managing your own financial issues. To ensure accuracy, the materials on this site are all from the United States government: one goal of Real-Life-Debt.com is to help people find the excellent material produced by the Federal Trade Commission, Federal Reserve, Consumer Information Center, and similar organizations."

In addition, Real Life Debt also features a weblog (a "blog") with postings from different individuals who share their own challenges managing their personal finances, including bankruptcy, credit card penalties, and much more.

Real Life Debt is an unbiased source of credit card, debt management, privacy and bankruptcy information, without commercial sponsors or a sales pitch. To ensure accuracy, much of the material is from U.S. government sites.

By Dave Taylor

Dont Let The Good Times Bury You

ÿþIt is vital to get rid of debt while things are going well. Yet the opposite is usually the case. Human nature is such that when we find ourselves living in good times, we let down our defenses. With our lives going great we seem to make the worst decisions. It's not hard to understand why this happens. We believe things will always be better in the future, "When I'm done with school, When I get a better paying job, I'm sure I will get that promotion."

With this attitude, that extra lump sum of money, or the raise at work, is used as a springboard to increase your personal debt. After all you can now afford better this, bigger that. You assume in your linear view of life that tomorrow will take care of everything. You don't become concerned with your debt load, until you no longer can make the payments.

When you begin to feel the squeeze of debt, you want some quick fix to get you out of trouble. Unfortunately there are no quick fixes for debt that will leave you (or your credit report) unscarred.

But why should it be any different from other areas of your life? If you know a food will give you heartburn you take a pill and, "presto," you may eat any thing you like. If you can't find time to exercise, just take a pill and watch those pounds melt away.

The economy is built on the same "I want it now," principle. If you want an item, you just whip out the plastic. You need it now. You will figure out later how to pay for it. When your plastic can take no more, you want out of debt in an easy way. You begin looking for the magic pill. Unfortunately the drugstore closed a long time ago.

A woman, who I know casually, had no problem taking on more debt because she saw herself able to handle the extra payments. She reasoned, if everything remained the same she could handle the drain on her income. So she bought some expensive gift items on her cards and began making the monthly payments.

She found out rather quickly she could not see into the future very well. Her car gave out on her. The repairs exceeded the value of the car. She needed one for work, so she bought another.

The new payment wiped out the tiny cushion she had each month and also made it impossible to pay on her credit cards and store accounts. Today she finds herself hounded by her creditors and unable to pay them anything.

What she should have done, and what you should do, is pay off your debt while you can and not take on any more. Whatever extra you have each month should be applied toward getting out of debt in a systematic way. Until you are debt free, you should order your life to make it a top priority.

Life's pressures are more easily handled without money worries dogging you. Then when those big promotions, with those big raises come along, you will be trained to put some aside. And without debt to take care of, you can. The goods times then, truly, will be the good times.

By David Wilding

Eight Ways to Consolidate Debt

Next to winning the lottery, a debt consolidation loan is a debtor's dream. With one monthly payment and a fixed monthly payment schedule, you can actually see an end to those monthly payments.

In reality, consolidating bills isn't always easy. If you have a lot of debt, it can be hard to find a consolidation loan at a lower interest rate. And if you're not careful, you can end up deeper in debt than when you started.

Your goal in consolidating your debt should be to lower your overall costs. To accomplish this there are two things to keep in mind:

1. Get the lowest interest rate possible

2. Have a plan to pay off your debts in 3 - 5 years.

Here are some of the best ways to consolidate:

Using Credit Cards

The good news about this method is that with a good credit rating, you may get a much lower rate than other forms of consolidation loans. And since credit card issuers don't require collateral, you aren't "risking the farm."

Call your current issuer to ask what interest rates they will offer you if you transfer balances from other cards over to theirs. Go for a fixed rate if you can get it, and ask them to waive any transfer fees. If you can't negotiate a low rate with your current issuer, try shopping for a new card at a site such as CardRatings.com. But be careful! Too many applications for credit in a short period of time can hurt your credit rating.

Once you do consolidate this way, be sure to set up an optimal payment plan so you can be debt-free in 3 - 5 years.

Home Equity Loans

With a home equity loan, you borrow against the value of you home, minus any other mortgages. The two major kinds are:

1. A Home Equity Loan - a fixed amount of money for a fixed period of time (sometimes at a fixed rate) and

2. A "Home Equity Line of Credit" where you borrow up to a pre-approved credit limit (interest rates usually variable) and can borrow again if you still have money available.

These loans can offer attractive rates, low payments, and the interest is usually tax-deductible if you itemize.

Many issuers offer no or low closing costs for these loans. Interest rates are often variable, however, and there's always the risk that you can lose your home if you can't pay.

Cash Out Refinance

Refinancing your home and taking out money to pay off bills (called "cash-out refinance") is yet another way to tap the equity in your home. If you can refinance at a substantially lower interest rate, you'll eliminate the high interest costs of the debts you pay off, and you could even come out with a lower payment than you have right now since rates are so low.

One option to consider: an interest-only loan. By lowering your monthly payment, you can free up money to use toward paying down other high-rate debt or building a retirement fund.

Make sure you understand the total cost of refinancing. Take any money you've freed up by paying off other bills and use that to create an emergency savings fund.

Traditional Debt Consolidation Loans

A debt consolidation loan is an unsecured personal loan, and the only collateral you are offering for the lender's security is you. Because lenders consider them risky loans, they're usually more expensive and not always easy to get if you have a lot of debt.

If the interest rate is too high to make it worth it and the repayment term is ten or fifteen years, you should probably consider another method of consolidation. However, if the term and interest rate are right, this can be a great way to actually save money in the end. (Check Bankrate.com for current averages). Remember, to calculate the total cost of the loan from start to pay-off.

Credit Counseling

Credit counseling agencies may help you get out of debt, though they don't actually consolidate your debt.

Instead, payment plans (usually with lower interest and fees) will be worked out for all of your eligible debts. You'll make one monthly payment to the counseling agency, which will pay all your creditors.

Participating in a credit counseling program generally won't hurt your credit rating, and if you stick to the plan you can be out of debt in three to six years. But be careful which agency you work with. If the counseling agency pays your bills late, you'll pay the price since you're still responsible to the lender. It happens.

Debt Settlement

Debt settlement is another option that's become increasingly popular with consumers who have a lot of debt and can't, or won't, file bankruptcy. You stop paying your bills and instead make a regular monthly payment to the settlement company. Your creditors contact them, and not you, about your overdue bills. As your accounts fall further behind, the negotiation company will settle your balances - usually for 50% of the balance or less (including fees) depending on the debt. Most people can be out of debt in less than two years or less using these programs.

It's not perfect. Your credit rating will be hurt in the short run and you must be certain you're dealing with a reputable company or the money you pay each month could disappear. Still, for consumers who can't shoulder the burden of debt they have now, it can be a very good option.

Retirement Loans

If you have a 401(k), 403(b) plan or certain types of pension plans, you can borrow against your nest egg. (You can't borrow against your IRA.) It's easy, with no income qualifications or credit check.

The key here is to borrow against your retirement account, rather than withdraw from it early so that you don't end up paying taxes and a 10% penalty. Also, if you leave or lose your job, you may have to pay your loan back immediately or pay taxes and penalties for an early withdrawal.

These loans typically offer low interest rates, and interest is paid to you, since you are the lender. While tapping your next egg like this can short-change your retirement, so can costly debt payments. If you are in your 20's and 30's,you obviously have more time to rebuild a retirement nest egg, but even if you're in your 40's or 50's, you will want to weigh the cost of paying the high interest of the debts over time, versus borrowing from your retirement account. The return you get from paying off high-rate debts is guaranteed - while the stock market isn't.

Rapid Repayment

There is a mathematically optimal way to pay your debts. Choose a fixed level monthly payment, and commit to it each month. Pay as much as you can on the highest rate debt first, while payment the minimums on the rest.

I almost always suggest consumers with debt start by creating one of these plans. Many people who do so find they don't even need to consolidate to get out of debt in the next few years. They just need a plan and they can do it on their own.

Overview

The biggest mistakes people make when it comes to consolidation are:

A. Not having a plan for paying the debt off after they've consolidated, and

B. Procrastination. Waiting for the "perfect" solution to come along almost always means you'll end up deeper in debt. Choose your approach, and start getting out of debt today!

For more information on dealing with debt, visit www.stopdebtcollectorscold.com.

By Gerri Detweiler

UK Debt When Moving Abroad

The idea of moving abroad to escape debt seems to be more of a common practice these days. People with failed businesses or swamped in debt seem to think moving abroad will give them a fresh start, free from debt and allow them to build a new life.

It became obvious after reading some of the comments on various UK debt forums that there is divided opinions on this. Some people think running away from debt is too much of a risk, and believe the creditors will eventually catch up with the debtor, whilst others encourage the idea, stating that there is no way debtors will be found and seem to encourage people to move on and enjoy a new life free from the responsibilities of debt.

In the past this might have been a successful way to start a new life without the worry of unpaid debt. However, creditors and courts alike seem to have caught up with the idea over the last few years and have taken action to make it more difficult for people to escape the responsibility of repaying outstanding debt.

Creditors taking action

Some countries, such as Germany and Canada, have reciprocal agreements when it comes to tracing debtors and debt collection practices. There is not an awful lot of information regarding which countries have reciprocal agreements and which do not. Could it be that creditors do not want people to become too clever so have not made it common knowledge? However, a search around the World Wide Web might disclose a few more countries with these agreements.

A reciprocal agreement in the UK means a UK Court can enforce a CCJ (County Court Judgment) using the legal system of the other country. If there is no such agreement in place, a creditor can sell a debt to the relevant country where the debtor resides and debt recovery procedures will commence under the law of that land.

Tracing a debtor

The resources available to creditors nowadays when it comes to tracing a debtor are vast. Although the resources in other countries may be limited, there are still ways and means of finding people, especially once the creditor finds out which country the debtor has moved to. A creditor may have their own department in that country, or relations with other credit companies in that area.

Creditors can also try a tactic or two to locate someone's whereabouts. They may go to the last known address, talk to the neighbours, family friends or relatives who could unknowingly tell them of the person's whereabouts. Once they know which country the debtor is in, their job is made much easier.

Using an ATM card in another country shows us how easy it is to get information from a UK account abroad. If we can do this so simply, what other information is able to zip round the world almost instantaneously?

Having resources to trace a debtor or having agreements with other countries, or even the possibility of selling the debt to an agency in the appropriate country does not automatically mean that a creditor will be successful in tracing a debtor. In some cases, people do get away with it. It is however a risk for anyone considering moving abroad to avoid debt. A creditor has a period of 6 years from the last time a person acknowledged a debt to use the legal system to recover monies. However, if a creditor has taken legal action on an account, the debt can be legally recoverable indefinitely. This means that someone could start a new life abroad and work hard for the assets they accumulated, only to find a few years down the line that a creditor has traced them! This could mean everything they have worked for is put at risk and could be taken from them to repay their debt.

What are the Options?

Many people who move abroad who are struggling to keep up with their repayments may not be aware of the free financial help available. They do not even need to telephone the UK, as there is free advice and help available on the web, just a quick email can put someone's mind at rest and make them realise they are not alone.

There are companies such as FCL Debt Clinic, who can offer a free financial assessment and advice. FCL Debt Clinic can also refer clients to a Debt Management Company who charge no fees and can help negotiate affordable monthly repayments on their clients' behalf by setting up repayment plans with their creditors. Anyone with a UK bank account or the use of one for transferring money, with UK debts, can be helped. This way, the ever-present worry of whether a debt is still around is no longer there to haunt someone.

By Nicola Bullimore

Selecting A Credit Counselor; Asking The Right Questions.

ÿþWhen you find yourself thinking about using a credit counseling service, you need to be very careful. You need someone who will help you, not just some pushy sales associate who wants only to sign you up for their service.

You are about to place your financial life in someone else's hands. Make sure you have the answers to some questions before you do. Then make sure you like the answers to your questions. Here are some for starters:

Which of my creditors have you worked with in the past?

You have a list of your creditors. You want to compare it to the creditors they have worked

with in the past. Have they been successful working with your creditors in reducing payments,

lowering interest, and eliminating fees?

You need to know not all creditors will work with credit counselors. If all, or most, of your

creditors have, or will, you should investigate these services further. If not, credit counseling won't do you much good. To protect yourself, ask for a list (in writing) of any of your creditors they have worked with in the past.

Will my creditors be paid on time each month?

Two things come into play here. What are the due dates of each creditor and when during the month do you get paid? Nothing defeats the purpose faster than paying a creditor late, after you have set up a new payment schedule.

Some credit counseling services use a set date each month to make payments from the money you have given them. If they don't have your creditors change the due date you could be socked with late fees each month. Find a service that adjusts the due dates of your bills to work around the days you get paid.

How do I pay you each month?

The credit counselor can't pay your creditors until you pay them each month. Will they

remove money, each month, from your account with an electronic transfer or are you

required to send them a guaranteed check or money order? You want to make it as easy as

possible for this plan to work. Look for a service that will withdraw funds from your

account automatically each month.

When and how often will I get statements of my accounts?

Just because you have turned over a portion of your financial life to someone else to run, does not mean you don't need to keep track of what is going on. Your statements should break down your payments so you can see where the money is going. How much is going to interest, how much to the principal balances, and how much is being paid to the credit counseling service.

Who can I call?

When you have a problem or question can you speak with someone on the phone? Are you able to speak to the same counselor each time? If not, how long do you take to returns phone calls?

Do this up front. Make sure you can live with the answers you receive. Then test the service to see if they live up to what they have said. Check their service out before you sign on the bottom line. If you find that you can't get questions answered or telephone calls returned look for another service. Going through credit counseling is stressful enough without any added problems.

These questions will give you a good idea what kind of service you have found. There are other questions you may ask. If you think of any do not hesitate to ask and don't stop asking until you get the answers you need. It is your money.

By David Wilding