About 'debt reduction service'|...None believe that wealth can be created by record deficits and aggregate debt. None believe that printing ever more money will not lead to inflation. What we have...
A variety of debt help options are available for individuals challenged by financial problems. From budgeting to credit counseling and debt settlement to debt consolidation, debt relief solutions exist for nearly every type of financial situation. It is important to research debt help programs to determine which financial strategy provides the results you are seeking. Each program has advantages and disadvantages. Some can be implemented at no-cost while others require upfront fees or monthly installments. Let's briefly review the most popular debt relief options. Budgeting is the easiest and most cost-effective way to reduce debt. In order to be successful, debtors must maintain self-control and commit to sticking to their budget. The key to achieving financial goals is to create a realistic budget. The biggest budget-busters are unnecessary expenses such as morning lattes, fast food lunches and impulse buys. Most people are unaware of how much money they waste on things they really don't need. If you want to become debt-free, you're going to have to make some sacrifices or figure out a way to increase income. Commit to tracking daily expenses for thirty days to determine where your money is spent. Chances are you can cut a few hundred dollars per month in nickel and dime expenses. Ask yourself if you really need that item. If not, resist the temptation to purchase. If you cannot muster the will power to stick to a budget, or if you have accrued more than $5,000 in credit card debt, consider credit counseling. Credit counselors educate consumers about finance and budgeting and negotiate with creditors to reduce interest rates or lower outstanding balances. Most credit counseling service providers charge fees for services rendered. Individuals who cannot afford counseling can seek help through non-profit consumer credit counseling agencies. Debt consolidation is an option for homeowners who qualify for home equity loans. Real estate equity is used as collateral to secure a second loan which is used to pay off credit cards and outstanding debts. This debt reduction option is attractive because home equity loans are charged a substantially lower rate of interest than credit cards. Keep in mind you are placing your home at risk when using the property to pay off debts. If you become delinquent on equity loan payments, the lender can initiate foreclosure. Debt settlement is a bankruptcy alternative that can achieve the same results without incurring as much credit damage. Debt settlement involves negotiating with creditors to reduce outstanding balances. This can be accomplished either by directly negotiating with creditors or retaining the services of professional debt settlers. Most credit card companies aren't eager to reduce debt. Oftentimes, consumers find working with a debt settlement company provides better results. Some debt settlers are well-connected within the credit industry and can reduce debt by up to 60-percent. However, consumers should engage in due diligence to ensure they are working with a reputable and trustworthy company. Debt settlement is not cheap. Consumers are required to pay start-up fees and monthly maintenance fees, in addition to debt payments. Take time to calculate the true cost of debt settlement before signing a contract. Bankruptcy should be considered as a last resort. The financial ramifications of bankruptcy are far-reaching and can haunt you for years to come. New bankruptcy laws enacted by Congress in 2005 require debtors to repay a portion of debts by establishing a chapter 13 repayment plan. The amount to be repaid is determined by the 'means test'; a financial tool which compares debtors' income to the states' median income level. Debtors must contribute a large portion of non-disposable income toward repayment of debt. If they are unable to afford chapter 13 payments, creditors can petition the court seeking dismissal. When bankruptcy is dismissed, debtors fail out of bankruptcy and creditors can commence with collection action. |
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