Debt resolution – All you need to know

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Debt has always been a major issue for the people. Coming out of it once you are already trapped in it is not easy and there are a lot of steps you need to take to really push yourself out of it.

If you are an avid shopper and an extravagant personality then credit card bills and loan dues must be common sights for you. But if not tamed then this habit can prove to be vicious for you. It can lead you to bankruptcy and can make you lose all your money. Don’t be scared, there are plenty of option at your mercy which if used wisely can save you from falling into a debt trap. Just have an idea of these and manage your debts and income resources well. Rest everything will be sorted.

Understand the dynamics of credit cards

The person who is an avid shopper must be having huge credit card bills to his or her name. But then you might fall into the category of people who are in a debt because of some financial contingency. You might have lost your job or might have taken loan for education. Maybe you have to take loan for paying hospital fees or you have started up with some new endeavour.
Credit cards are considered as short term safe passage of getting out of debts for some time. But they start with small debts and end up piling along with the accruing interest. This can turn into a haunting situation if not managed properly in time.

Credit card users should be aware of the different charges and the interest rates charged by the credit card bad credit loan companies from time to time. In 2007, on account of multiple complaints by the card holders, the US senate got an enquiry carried out into the ways the credit card companies function, the interest rates they charge and the penalties and the other fees are decided when the customer is late in the payment of the bills. All this showed several discrepancies in the way the credit card companies functioned and hence they were forced into changing their norms and the terms and conditions towards making them more beneficial for the customers.

Get the knowledge of the steps which will help you

If you are someone who is trapped in credit debt then you must follow these steps in order to reduce it:
First Steps:

  • Get ready for the challenge :

You must be well prepared about how to deal with your finances and financial problems. Taking back control of your finances means managing your finance effectively in order to restrict your expenses and enhance your savings. You must analyze your decisions and take corrective steps to rectify the flaws in it. Lower your expenses and be disciplined about it. Follow a budget plan. To do all this maintain a discipline in whatever you do.

  • Take external assistance :

Consult an external financial advisor who can guide you through the tough times. They have hands on experience in dealing with such problems and might prove to be of help. In order to deal with credit card debt help you can hire some credit card debt management specialist. Based on your factors, situations and the amount of owed debt the specialist would be able to help you. It will not be easy to follow the plan and be back to routine but then you can deal with it with the help of expert advice and a good plan!

One should also talk to their family and the friends about the situation faced by them They can also offer you some valuable advice. Remember, they are experienced and have seen tough times and have risen out of it successfully. Their tips can really help you get out of the debt situation faced by you.

Some Available Options:

  • Debt consolidation or simplification:

Under debt consolidation all your loans are combined into one. This saves you a lot of money as your monthly repayment amount is reduced and the interest rate might be reduced too! This is done to simplify your debt repayment method. Debt consolidation companies claim themselves as a not for profit company but then they are here for the intent of minting money. So, you must do your homework well before settling for any particular debt consolidation company in order to choose the best out of it. Make sure of selecting someone who can take your out of the debt trap and not pull you more into it.

Consolidation cannot pull you out of your debt situation until you stick to the rules which you need to follow with regards to the same. There are a lot of individuals who are seen to fall into the debt trap even after they take to debt consolidation. It is therefore essential that you stick to the bigger pan and make the necessary lifestyle changes to achieve success in debt consolidation efforts.

Bankruptcy:

it is wicked but then if you are in extreme debt conditions you can choose to declare yourself bankrupt. Bankruptcy is a legal financial tool using which a person can start everything a fresh and from the scratch. In some extreme cases this is the only option left to get your financial resources free and productive again. But bankruptcy has a very bad affect on your credit score. The negative effect of bankruptcy can stay in your credit score for a good 10 years of time period. But even after the ten years period the effect can be seen in your credit score drastically. But because of changes made in law after 2005, declaring bankruptcy has become even tougher for everyone. If you are considering this option to settle your dues then you should take help of a good financial expert who can sail you through such tough times.

Comments: 3

  1. Sebastian April 21, 2014 at 2:10 am Reply

    I am trying to decide if going to one of these Debt resolution companies is beneficial to me. How do they get the companies to lower the balance? Can I do this without going to them? Will going to one of these places hurt my credit rating?

  2. Faustino April 25, 2014 at 9:37 am Reply

    I have a plan to pay off a large amount of money using a loan from the bank
    I looked into settling my debt individually first so as not to have to take a huge loan out
    How do I talk to companies to settle debts
    What questions should i ask ?
    And what should I offer

  3. Perry May 3, 2014 at 8:32 am Reply

    Hi we have some serious debt totaling about 43k or more if the hospital doesnt write off my husband’s final medical expenses. They can write off up to 95% of it if they choose. They had no reason to lose him IMO so they damn well better, but I digress….

    Its a car, credit card, personal loan, and walmart card (and whatever the hospital doesn’t write off).

    The payments are really hard for me to keep up with since they are on all different days, I dont even know WHERE the walmart information is, so that is probably late. He used to pay all the bills and I am living off so much less money now. I am having to sell my car but cannot present the title so I am taking a risk there as well but I can’t afford $444 a month so…

    We worked really hard on our great credit score. I dont want to wreck it. I don’t deserve it either.

    I am going to college and I will be getting a huge refund because my GI bill is paying tuition, so I just pocket my grant, scholarship, and loan money. I was thinking maybe just roll my credit card into my perkins loan because it is at 6% and is not revolving??? My CC is at 12% and revolves forever so I think that will be better?

    Should I just wait for all my college refund money or look into debt resolution, but how many points will that take off my FICO I am about 800 right now! Grrr

    All my credit card debt and personal loan is based on landscaping and placing out manufactured home on our land, they wouldn’t do a home equity because of the fact that the home isn’t attatched to the land until after the fact. So it looks discretionary on paper but it was totally necessary but we DID plan to refi into a home equity after, but now I can’t because he died and I am just a college student. ARGH!

    WTH do I DO???!?!?
    Thanks CatDad

    only 9000 of the debt is that tragic ER visit. The rest is all our joint debt. I am pretty sure they will write off about 90-95 percent so I am not very worried about that small portion of our debt.

    The car is the biggest debt and I am having to sell it under the table 🙁 with a private contract. I know a dealer won’t give me what I owe on it but my buyer will. :/ I have no death benefits on our car. But I will be damned if it ruins my perceft FICO.
    I am not adding to it, I am just calling it something else: A student loan.

    WE WERE SUPPOSED TO GET an home equity loan to cover this for 5 percent interest for 20 years. It was gonna be like $350 a month for everything.

    But I can’t now becaues he died.

    SO I will just put it on a 6% student loan. Its like practically the same amount. A rose by any other name right?

    I am just doing the same thing but just naming it a different type of debt.
    I am not adding to it, I am just calling it something else: A student loan.

    WE WERE SUPPOSED TO GET an home equity loan to cover this for 5 percent interest for 20 years. It was gonna be like $350 a month for everything.

    But I can’t now becaues he died.

    SO I will just put it on a 6% student loan. Its like practically the same amount. A rose by any other name right?

    I am just doing the same thing but just naming it a different type of debt.

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