Money Matters Now

DebtReductionVideos asked:

This commercial was filmed in September of 2009 at our Eugene, Oregon office and features our Branch Manager, Julie Wisely. The commercial was filmed and edited by Michael Turner at NBC KMTR TV. Debt Reduction Services Inc. is a non profit credit counseling organization that helps consumers get out of debt. Call 1-877-688-3328 for more information or visit www.DebtReductionServices.org.

DebtReductionVideos asked:

This commercial was filmed in August of 2009 at our Tulsa, Oklahoma office and features our Branch Manager, Robert Johnson. The commercial was filmed and edited by Mike Hill at KJRH NBC. Debt Reduction Services Inc. is a non profit credit counseling organization that helps consumers get out of debt. Call 1-877-688-3328 for more information or visit www.DebtReductionServices.org.

Deciding to pay off credit cards is one of the smartest financial decisions you can make. Unfortunately, many Americans have become addicted to credit cards. We use them for everything and whip out our plastic without ever stopping to think how we are going to repay our debts. The problem is millions of people have fallen into a financial trap which is quickly leading them to bankruptcy.

In order to pay off credit cards, the first thing you need to do is stop using them. Experts suggest cutting up cards to avoid temptation. However, a large percentage of people would rather cut off their right hand than their plastic. If you can’t bring yourself to destroy your credit cards, at least remove them from your wallet and safely store them away. Consider using a bank safe deposit box. Your credit cards will be protected by the bank and out of your house; helping reduce temptation and ease of use.

Next, you need to develop a plan to pay off credit card debts. Some financial experts recommend paying off cards with large balances first. Others recommend paying off small balances first, then attacking the larger balanced cards. The one thing experts agree on is paying off credit cards with the highest rate of interest, regardless of the balance due.

The goal of any debt elimination plan is to create a plan you can actually adhere to. While it is tempting to go all-out and eradicate all debt in a short period of time, few people can actually accomplish that goal. Keep in mind it took a long time to create this financial mess and it will take a while to get out from under it.

If creating a financial plan becomes too difficult, consider obtaining credit counseling. By having a professional review your finances, you can gain a better understanding of your spending habits. Credit counselors can offer suggestions on the best strategy to pay off credit cards and outstanding debts. In some instances, credit counselors can help negotiate with your creditors to reduce interest rates, eliminate late fees or reduce balances.

Another option for paying off credit cards is through debt consolidation. This option is not without risk and should be given careful consideration. Debt consolidation loans are usually reserved for homeowners. Using the equity in your home, mortgage lenders provide a second loan using your home as collateral. Outstanding debts are paid off with the monies received from the home equity loan.

While it can be tempting to pay off credit cards using a home equity loan, consider the fact that home equity loans are paid over 10 to 15 years. By extending the terms, you could potentially be paying considerably more in the long run. Be certain to calculate the true cost of debt consolidation loans before using your home to secure a second mortgage note.

Debtors with substantial credit card debt might benefit from debt settlement. While this technique can reduce the amount of debt owed, it can seriously blemish your credit. Debt settlement is generally negotiated through debt settlement companies or law firms. Debt settlers negotiate with creditors to reduce outstanding balances by as much as 50-percent.

Debt settlement companies generally charge a fee based on a percentage of the debtor’s overall debt. For instance, if you owe $100,000 in debt, the debt settlement company may charge $10,000. While this may sound like a lot of money, keep in mind debt settlers might be able to reduce that $100,000 down to $50,000. Even paying $10,000 in fees, you will still be saving $40,000.

The consequences of debt settlement may outweigh the benefits. Be certain you understand the pros and cons should you decide to use debt settlement to pay off credit cards.

By: Simon Volkov

About the Author:

Nowadays, many people can get into a bad credit situation if they do not keep track of their income and expenditure. Many young executives suddenly find that they are being offered credit cards by various companies. Those who are sensible will find a credit card that suits their needs, sign up, keep track of their purchases, pay off their credit card bills in full each month, and ignore offers from other companies.

There are others who may be dazzled by all the credit on offer and will end up with credit cards from several companies. They may easily end up making lots of purchases on credit while making the minimum payments on their cards. Then, one day they realize just how much debt they are in when they need a debt consolidation loan to get out of a bad credit situation.

At the Debt Consolidation and Debt Reduction Service, we do not give you debt consolidation loans. We help you reduce your debts by 40 percent to 60 percent and your payments by 40 percent. We see to it that you pay no interest, late fees, or penalties. We get you out of debt, and out of a bad credit situation, within three years. We ensure that you receive no more harassing phone calls from creditors by negotiating with them.

We can help you create a debt reduction plan. You begin by listing all your debts, estimating your income, and creating a workable monthly budget. You then have to find the money to pay off all your debts. We also offer credit counseling to our clients. We begin by advising our clients to stop using their credit cards—this automatically stops their debt situation from worsening. By helping you estimate your income and create a monthly budget, we ensure that you know how much you earn each month and how you spend what you earn.

You can consult us if you have debts that are over and above $5,000. You cannot hope to get out of a bad credit situation if you only pay the minimum amounts due every month—you cannot hope to get out of debt for a lifetime. If you decide to go in for debt consolidation—where the numerous payments you have to make each month are consolidated into one small sum—you can hope to get out of debt faster. If you are in a bad credit situation and need help with debt consolidation, fill out the form on our Web site. We will help you get out and stay out of debt for the rest of your life.

By: Jonathan Pike

About the Author:

Getting into debt these days has become very easy. Credit card companies bombard us with offers in our mailbox, ads on TV, promotions in stores. If you can sign your name, it seems like you can get credit.

But what happens when you use so much credit that you can no longer pay your credit card bills every month?

And what happens when no matter how much you pay, your bills get bigger…and bigger…and bigger?

There are several strategies for getting out of debt.

All of them have their good points. And all of them have their bad points. Which one is right for you? Here is an overview of the different debt reduction options available to you:

Borrowing money from friends or relatives:
If you have a friend or relative who has enough money to help you get out of debt, consider yourself lucky. But think long and hard – and then think again – before choosing this option. While borrowing from a friend or relative can help you avoid the high cost of interest (if they are willing to give you the money without asking you to pay interest), borrowing money can hurt, or even ruin, your relationship. Everybody wants to pay back their “rich uncle” – but what happens if you don’t? Or you can’t? This can put both of you in an uncomfortable position. Even if the money is a gift, it can change your relationship entirely. So make sure to give this option a lot of thought before borrowing money from a friend or relative.

Credit counseling:
For many people, credit counseling is a good option. After all, inmost cases you can lower your interest rate, lower your monthly payment, and combine your credit card bills into a single payment. But be careful. There are LOTS of “non profit credit counseling” companies out there. And not all are created equal (and not all do what they say they will do). Before signing any paperwork, it is a good idea to ask lots of questions. And compares the fees and other program details. Just because a business is non-profit doesn’t mean there aren’t costs to you – and doesn’t mean you don’t need to shop around and compare programs!

Debt consolidation loan:
If you are fortunate enough to own a home (and you have enough equity to borrow money from your home’s value), a debt consolidation loan may be the way to go. In many cases, your interest may be tax deductible (but check with a tax professional first to make sure). And also think carefully about this option – because if you borrow “against” your home, and you cannot make the payments for whatever reason, you may risk losing your home! Fees, interest rates, and terms vary, so make sure to shop around for the best loan program for you!

Debt settlement:
If bankruptcy seems like the only option, then debt settlement (also called debt negotiation) may be a good alternative. The process of settling your credit card bills (paying them off for less than you owe) is a more aggressive approach to getting out of debt. But if you are behind in your payments, this can be a less drastic step than declaring bankruptcy. You will pay income taxes on the amount you save, but this amount is usually still much less than the amount you would have paid in interest. Before deciding on debt settlement, make sure you feel comfortable with such an aggressive strategy – and once again, shop around and compare terms and fees.

Bankruptcy:
Typically, bankruptcy is the last alternative. And with the new bankruptcy laws put into place in October 2005, you should consult with a bankruptcy attorney before considering this option. With good reason (for the most part), having your debts “written off” through bankruptcy has become more difficult. So, find a good lawyer, and discuss your options carefully.

Now, which of these debt reduction strategies is right for you?

There is no simple answer. The best advice is to check out all your options – very carefully – before deciding which strategy is best for you. Before signing up with any company:

Ask lots of questions so you are comfortable with the company Learn how the process works, find out the fees, and get ALL agreements in writing Check with the Better Business Bureau to see if there are any unresolved complaints

And while being in debt is certainly very stressful, always remember that life is not entirely about money. Life is about making the most of each day, and being thankful for the things that you do have – while you are working on fixing the things you don’t!

By: Kris Bickell

About the Author: