How can I get out of debt?
I am looking for a method to get out of debt … possibly to settle for less on some of the old stuff – Any Ideas?
Posted September 9th, 2010 in Debt Settlement. Tagged: old stuff.
I am looking for a method to get out of debt … possibly to settle for less on some of the old stuff – Any Ideas?
Technorati Tags: old stuff
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consolidate with who you owe money. set up a program. Get a job and pay it off. Cut personal costs. Make a budget. Its hard at first, but soon you will get into it. The hardest thing for people to do is to accept change.
September 9th, 2010 at 2:14 amLook up credit counseling in the phone book.
September 9th, 2010 at 2:14 amThat’d be a start,some people like me don’t have anything to sell and couldn’t sell it if i did.
September 9th, 2010 at 2:14 amHere is something you should look into
http://www.badlyindebt.com
September 9th, 2010 at 2:14 amthere are usually free debt consolidating places you can contact that will help you minimize or pay for your dept. or you can claim bankrupcy which those people will wipe your debts clean…meaning no more debt. but it will take awhile for you to gain a good cradit score.
September 9th, 2010 at 2:14 amEveryone’s in debt. But if you’re in serious debt, cut back on wants and only go for nessecities. It’ll be hard, but it could help. Also check for debt-control companies. I saw one on TV, but I forget the name. Surf the net.
September 9th, 2010 at 2:14 amhttp://www.thisismoney.co.uk/help-and-advice/advice-banks/article.html?in_advicepage_id=100&in_article_id=395878&in_page_id=90
September 9th, 2010 at 2:14 amhttp://www.moneyfacts.co.uk/Cards/guides/get-out-of-debt.aspx
http://www.direct.gov.uk/en/MoneyTaxAndBenefits/ManagingDebt/PlanYourWayOutOfDebt/DG_10023185
Hope those help.
Stop using your credit cards.
Try to find a credit card with a lower interest rate and transfer your outstanding debt.
Don’t spend any money unless absolutely necessary.
A professional would be the ideal way to go…..to make sure you don’t make things worse.
September 9th, 2010 at 2:14 amList your bills out on paper (not the monthly ones) just the ones with large never-ending balances. When you list them start with the one that has the largest balance and interest. Since you will take longer to pay those, continue with the minimum. Pay a little more on the lower ones until you eat those up. Then take the money you would still be paying and use that money to eat up the next one. As you work your way up the list, you will also start to feel lighter and more accomplished. Keep turning over your left over money. One important thing you can do with the extra, is to start a savings account. You should really try and pay yourself first.
September 9th, 2010 at 2:14 amDon’t buy anything with a credit card and don’t borrow anymore until all your debts are gone.
September 9th, 2010 at 2:14 amIf you have the money call the creditors with the smallest balances ask them what is the minimum amount that you can pay to settle your account. Get them to send it in writing before you pay it!!
September 9th, 2010 at 2:14 amWell, I would suggest being wary of debt consolidation companies. Some are reputable and actually accomplish what you want them to accomplish, but some are a rip off, they tell you to pay x amount and then don’t even allocate payments to the creditors they were supposed to have helped you with. Research the company thoroughly before doing business with them if that is the route you decide to go.
If you want to settle the credit cards for less, call e ach credit card company and offer a settlement. There is a good chance they’ll accept.
If the debts have been sent to collection agencies, I’d be more wary about settling the debt. This is because the credit card company sells a slew of debts to multiple collection agencies, they will "settle" for an amount, and then you might get sued by a different agency later for the exact same debt. Also if the statute of limitations is up or almost up (this is typically between 7-10 years depending on the state you are in), paying the collection agency will cause the statute of limitations to be reset and you’ll be on the hook.
Another option would be to file bankruptcy. While it is not good on your credit and can stay on your credit report for 10 years, it will wipe out most debts (student loans, taxes, child support, etc being exceptions) and give you a fresh start. However this only makes sense if the cost of filing is much less than what you owe or can settle for. You didn’t say how much debt you have so I can’t answer that for you.
Just be careful, whichever method you have, you do not want to fall victim to a scam that not only fails to accomplish your goal but causes you to lose more money.
September 9th, 2010 at 2:14 amIf you properly write out and follow a budget, you will begin to experience freedom. This is strange to many people as most think that budgets are made to control us and take away freedom. However, a properly written out budget begins to control the money. I will get to the paying down debts part but the way we discover the money we use to pay debt is thorugh budgeting. We spend too much time making money to allow our money to control us. Once we know where every single dime we make is going, we can easily see where problems lie and make adjustments.
Start out by budgeting items that are essential on a monthly basis. You should always start out with food, then housing and utilities, then transportation. When you start, always overfund the food category. Housing should not take up more than one fourth of your take home pay. If it is substantially higher than this, you may want to consider getting in a better housing situation. You should stay away from car payments by paying cash for cheaper cars whenever possible. You should never pay interest on a depreciating asset.
After these four items, start by paying out the minimum amounts on all of your other debts. We will come back to paying more on these debts a little bit later. Next, plan for insurance payments. Then list out other personal expenses such as child-care, education, recreation money, and other things that you anticipate. Finally, set money aside for lump sum expenses such as car replacement, vacation, holiday gifts, etc.There should also be a category for “blow” money. You will waste money from time to time so it is important to be aware of it and plan for it.
It is important to understand right now that you need to get out of debt if you have any (besides a house). The first step to doing this is to get some money in savings as an emergency fund (eventually 3-6 months expenses but at least 1,000 to get started) and cut up those credit cards if you have any. This way we accomplish the first step to getting out of debt which is putting yourself in a position to not have to borrow any more.
With whatever money is left at the end of the budget, we need to begin paying off these debts! Payments rob us of our most powerful wealth building tool, our income. There are two different approaches to becoming debt free. The first is to list all debts from the highest interest rate to the lowest, attack the highest interest rate and pay minimums on all the rest. The other way is to list all your debts from smallest to largest and attack the smallest first and make minimum payments only on all the others. The first may mathematically seem better but from my experience, the second approach actually works better from a behavioral standpoint. You get constant reinforcement as you knock out debts early and often. Either way, you need to cut your lifestyle and get angry. Try to settle with creditors on older debts. It doesn’t hurt to ask! Usually you can get them to settle for lump sums for pennies on the dollar. Have a garage sale and get a second job. Get intense and soon you will be free!
Once you are debt free (except for a house) make sure you are putting away 15%-20% of your income in a tax sheltered retirement fund. Also if you have kids, try to save for their college education.
If you are married, both of you need to get together and make a budget that you each agree about and buy into. Doing this by yourself will exponentially more difficult. Start taking these steps and you can become wealthy even on a modest income! It will be tough and you will fail the first couple of months. It takes practice to get good at budgeting but don’t give up! Make sacrifices today that will pay hundredfold in only a few short years from now. This is your life, go and make the most of it!
Hope this helps!
September 9th, 2010 at 2:14 am