Expert Savings Advice

Debt is a fact of life for most people in today’s society. Whether it is monthly mortgage payments, the balance owed on credit cards or loan repayments, most of us accept a level of debt in our everyday lives without really thinking about it.

The uncertain times that we live in, however, can often mean that a change in personal circumstances, for example, being made redundant or having to fund a major purchase such as a new washing machine unexpectedly, can have a significant impact on your ability to repay your personal debts.

If you have concerns about the level of debt that you have and your ability to meet your monthly repayments, then it is important to seek advice sooner rather than later. Even if you have reached the point where bankruptcy seems like a real possibility, it is worth exploring possible alternatives.

Where to go for advice

There are a number of organizations that can provide advice and support on debt-related matters.

The Government provides information on a wide range of issues on its Directgov internet site. This includes a Money, Tax and Benefits section, which can be found here; http://www.direct.gov.uk/en/MoneyTaxAndBenefits/ManagingDebt/index.htm. There is a lot of clear and practical information here on a variety of subjects, from general advice on how to deal with debt, to specific sections about mortgage arrears and bankruptcy.

The National Debtline, which is part of an organization funded by a number of banks, building societies and retailers, provides a confidential helpline that can help with providing information on ways of dealing with your debts. It is an independent service and, if you wish, you can speak with their advisers anonymously. Details can be found at http://www.nationaldebtline.co.uk.

The Consumer Credit Counseling Service, a national charity, offers a free debt counseling service which can be accessed either by using an online tool or speaking to one of their customer advisers. Details of this service can be found at http://www.cccs.co.uk/Services/Debtadvice.aspx

A specialist debt charity, the Debt Advice Foundation, also provides help and support with managing debt. There is plenty of information on their website, http://www.debtadvicefoundation.org and, as well as having a telephone helpline, they also provide a number of tools such as budget planners that can help with organizing your finances.

Ways of managing debt

There are a number of different ways of managing your debts. The most appropriate for you will depend on your individual circumstances. For some people, consolidating their debts works well as it makes them more manageable. For others, looking into debt help advice, or Individual Voluntary Arrangements provide the solution. These need to be set up by independent specialists such as those found at www.iva-expert.co.uk. For some, bankruptcy, administration orders or debt relief orders are the most appropriate way forward.

Different options can have an impact on your life in a number of areas. For example, they can affect your credit rating. Any assets that you own can also be affected and there could be future restrictions on the type of office that you can hold. It is, therefore, important to take advice if you are struggling with debt issues. This will ensure that you find the best way, for you, of getting back in control of your finances.

Car insurance is one of those bills that cannot be avoided. It is a must have for drivers and one that cannot be avoided. However, there is a way to purchase affordable car insurance. Nowadays, there is more than one place to buy your car insurance. There are many competitors online that sell car insurance, and you can save hundreds of dollars when you compare car insurance policies. All it takes is a few minutes to fill out a form and get a free quote.

A quick search online can yield hundreds of car insurance companies. Not all are available in your area, but those that are will ask you to fill out a simple form. This form asks for your personal and vehicle information. After you have supplied the website with this information, you are given a free quote on a car insurance policy. You can speak with an agent who is knowledgeable and experienced, and they can answer any questions you might have. Comparing car insurance between a few different companies can help you to decide which agency and policy is right for your budget.

Many insurance agencies offer 50 percent savings on yearly policies and discounts for good driving history, driver’s education courses, good credit, good grades and other things. You also get to save time because instead of phoning or visiting car insurance agencies, you can do all your own research online and get your own quotes from home or work. When you compare car insurance online you can save hundreds of dollars a year.

Some people feel pressured to purchase insurance from the first person they speak with, but when you do your own research, you can pick who you want to work with. There are many different kinds of coverage and sometimes it can be confusing for people, especially those who are buying for the first time. Insurance websites do their best to provide potential customers with information they can benefit from. They want your business, and to do so, they must have competitive prices and experienced staff to answer any questions you have.

The Roth IRA was born on January 1, 1998 as a result of the Taxpayer Relief Act of 1997. It’s named after former Senator William V. Roth, Jr. The Roth IRA provides no deduction for contributions, but instead provides a benefit that isn’t available for any other form of retirement savings: if you meet certain requirements, all earnings are tax free when you or your beneficiary withdraws them. Other benefits include avoiding the early distribution penalty on certain Roth IRA withdrawals, and avoiding the need to take minimum distributions after age 70. Contributions to a Roth IRA are not tax-deductible, but earnings grow tax deferred and can be withdrawn tax-free in retirement after age 59 1/2 if the account has been in place for at least five years. In addition, the Roth IRA withdrawals may be permitted without penalty sets no maximum age limit for contributions and imposes no schedule for withdrawals. Roth IRA also incorporates a few other options. Both traditional and Roth IRAs allow withdrawals after age 59 1/2, but unlike the traditional IRA, a Roth will permit contributions after age 70 1/2 and does not require Roth IRA withdrawals on any particular schedule. After five years, a Roth IRA allows tax-free withdrawals for a first-time purchase (up to $10,000), disability or certain emergencies without penalty, up to the amount deposited.

Larger Roth IRA withdrawals, including some or all of the interest earned in the account will be subject to tax. There is also a loophole for early Roth IRA withdrawals know as the “72(t) exception”. Under current tax law, you can avoid the 10% penalty tax if you take “substantially equal periodic payments.” The Internal Revenue Service 1989 Cumulative Bulletin tells you how to calculate what it considers to be “substantially equal periodic payments”. IRS Revenue Ruling 2002-62 adds additional details and clarifies some issues pertaining to Roth IRA withdrawal early. All of these engrossing volumes are very likely available at your local law library. To take a series of “substantially equal periodic payments” from your IRA without penalty, you must withdraw money at least once a year, and you must keep taking withdrawals for five years or until you reach age 59, whichever is longer. So, a 35-year-old must take withdrawals for twenty-five years, while a 51-year-old must take them for eight-and-a-half years. A 57-year-old would have to take withdrawals for five years, until age 62. Also, you must let a minimum of 5 years plus 1 day elapse from the date of your first SEPP withdrawal before making “unlimited” withdrawals from your IRA, even if you’ve reached age 59 1/2. Otherwise, the IRS will hit you with the 10% penalty and retroactive interest charges. The amount of your withdrawal is calculated based on the balance of your retirement account on December 31 of the preceding year or any date in the current year prior to the first distribution using your age on December 31st of the year in which you make the withdrawal.

Sometimes, saving money may seem impossible. You buy groceries on Monday, pay bills on Tuesday, and by Wednesday your paycheck has disappeared. However, if you establish a savings plan, youll find money in places youve never thought to look!

If youre like most American families, you wait for extra cash to save. However, by creating a plan, most people find they can save regularlyand reach their long-term financial goals.

In the beginning, the amount you save is less important than the fact that youre starting to save regularly. Its O.K. to start out small, but make the amount you decide to save each week or month a commitmentits very important to pay yourself first. Begin with an amount that you are sure you can set aside so that you build a sense of accomplishment rather than frustration. Giovanna Masci, money management expert at ACCION suggests the following to establish a savings plan.

Distinguish between wants and needs: Real needs are items that are necessary to sustain you and your family such as shelter, food, clothing, and transportation. All the items that enhance or possibly improve your family life, like new electronics and meals out, are wants that could be eliminated from your budget.

Set realistic and achievable savings goals. Experts suggest you place 10 percent of your income into savings. That’s a good goal, but don’t give up if you can’t save that much. Establish a savings habit and save consistentlyits better than putting aside a big sum just once.

Set up a separate savings account using automatic deposit. If you mingle your savings account with your checking account, you’ll dip into your savings and may never pay it back. If possible, have your employer deduct a set amount from your paycheck each pay period and deposit it directly into your savings accountafter a few weeks, you wont even miss the money!

Put your savings goals in writing. Writing down your savings goals can have a motivating impact on your savings habits. It makes your goals real and concrete. Write down your short, medium, and long-term goals along with your projected timeframe to achieve them. Make sure the goals are attainable and realistic and review them regularly.

For more helpful tips about managing your money and to improve your financial literacy, visit Your Money and You (http://yourmoney.accion.org).

Just about all of us plan to retire one day. You may visualize yourself with plenty of free time on your hands, no commute, and finally with an opportunity to travel with the person you love.

But statistics show that golden dream comes true for only a very few of Americans. Some studies reveal less than 10 percent of us ever retire. Even more alarming, other studies show a large percentage die within a year or two after retirement.

Clearly, an enjoyable, healthy retirement is not something that just “happens.” To get past all the challenges that lie in your way, you need to plan for your retirement wisely.

I advise people in my seminars NOT to retire, but to RE-FIRE. Instead of looking at retirement as merely leaving the world of work, look at retirement as a time when you can finally achieve the things you’ve always wanted to do.

Most retirement advice centers around telling you to put a lot of money in a savings account. While saving for retirement is important, most of what you should do to retire well can be accomplished within five years of retirement.

Much of what you need to do to retire successfully is mental and spiritual. When many of us retire, we walk away from a life of work that filled our days, exercised our minds, and included most of our good friends. Once you’re retired, you find your days become empty and unfulfilling, even depressing.

That’s why it’s critical to plan new tasks, goals, and attitudes for retirement. While sitting in an easy chair and relishing not having to go to work can be fun for a while, you’ll soon need activities and relationships to make your days fulfilling. You’ll also need ways to create a satisfying social life that often includes important new friends.

That’s why RE-FIREING in your retirement years is the right approach to take. Rather than giving up, you’re recharging and moving forward to an even more exciting life.

Focus on attaining optimum good health, creating the fine-tuned relationships you’ve always wanted, and finally accomplishing some of your true purposes in life. Re-firing can help you figure out what has been missing from your life, what you really want to do in your senior years, and help you develop solid strategies for quickly achieving your important goals.

Debt settlement, also known as debt negotiation or debt reduction, is a relatively new way for dealing with your debt problems. In a debt settlement program, by negotiating with a creditor, a client can reduce their debt by as much as 50 percent and be debt free in as little as 12 to 36 months.

Debt settlement is a great solution for consumers feeling overwhelmed with credit card debt that find themselves either falling behind on their payments or just able to afford the minimums. Considering the savings, in most cases its worth doing if you find yourself in any of the aforementioned situations. As with any debt solution, however, there are potential downsides to debt settlement that should always be considered prior to enrollment. First, debt settlement may have an adverse impact on your credit, particularly while youre in the program. To put this point in perspective, however, its important to remember the following: 1) any third party debt counseling program and even debt consolidation loans from finance companies like Beneficial may affect your credit negatively in the eyes of lenders, 2) the effect on your credit in the long-term is minimal, given the fact youll be eliminating all your credit card debt (amount owed is 30 percent of your credit score, compared to credit history, which makes up 35 percent of your score) and 3) if youre falling behind or about to fall behind anyway, then your credit has been or will be affected negatively anyway.

Realistically, the two main draw backs of debt settlement that are unique to debt settlement are the following: 1) the possibility of legal action being taken by the creditor to collect the full balance and 2) the possibility of creditors harassing you until the debt is settled.

Thankfully, if youre doing debt settlement in Texas or even debt settlement in Florida these concerns are very much diminished. Why is Florida debt settlement so preferable compared to a lot of other states? The reason is Texas has highly favorable debtor laws that give consumers a lot of rights and protections when it comes to past due unsecured accounts like medical bills, credit cards, repossessions, and personal loans.

How State Collection Laws Benefit Texas Debt Settlement

Every state has laws that say if a collections agency is collecting a debt, they are legally obligated to stop contacting a consumer if the consumer sends a Cease and Desist letter and/or a Power of Attorney notifying the collection agency that a third party is responsible for handling all communications with the creditor. Texas law takes it a step farther and not only limits harassment from collection agencies, but also from the original creditor as well. In most states, when a consumer falls behind on their payments and the debt is still being collected by the original creditor (the bank that originally lent you the money or the hospital that serviced you, for example), then the creditor is reserved the right to call the debtor on a daily basis in order to collect whatever is owed, and although debt settlement companies servicing these clients can very easily reduce the calls (changing of your phone number and address and notifying the creditor that you are seeking third party help, for example), no one can ever make the calls completely stop.

This is not the case however for Texas debt settlement clients. In Texas, the same law that deals with what collections agencies can and cannot do when collecting a debt also pertains to the original creditor. What does this mean in practice? It means that a debt settlement company servicing someone from Texas can easily get the calls to not only reduced, but completely eliminated all together (sometimes within days).

State Homestead and Garnishment Laws and How They Benefit Texas Debt Settlement

For Texas debt settlement clients, their wages and home are completely protected, which gives the creditor even more incentive to settle. Given the fact that creditors already have every incentive to settle even with clients who reside in states with less favorable debtor laws, Texas debt settlement clients are in an even stronger negotiating position with their creditors. What does this actually mean? Typically it means even greater protection in the event of a lawsuit and greater savings than what is typical. Let me explain.

Although the vast majority of cases settle, as anyone who has ever read a debt settlement contract will tell you—its impossible for a debt settlement company to guarantee that a client wont be the target of any legal action by their creditors. After all, creditors are always reserved the right to sue debtors to collect a past due account, regardless of whether the consumer is taking any action to resolve the outstanding debt.

In the event a creditor sues a consumer in court and wins a judgment, theyll usually go about executing the judgment in one of the following ways:

1)Wage garnishment—contacting your employer and asking that they set aside a percentage of your wages every paycheck until the debt is paid back in full. (Its illegal for an employer to fire you for this unless more than one creditor is garnishing your wages).

2)Lien on your property—obligates you to pay back the creditor with any proceeds from the sale or refinancing of the property. A creditor prefers to put a lien on your home since it usually increases in value over time, which means the proceeds from your homes sale will be higher, and thus theyre more likely to actually get paid back.

3)Seizing your bank account—contacting your bank, showing the proof of judgment, and asking to withdraw any monies held in deposit under your name.

Fortunately, Texas laws protect debtors from having their wages garnished (unless you authorized in writing to allow your creditor to garnish your wages) and entitle Texas consumers to 100 percent homestead protection in the event of a lien. (Note: this does not apply to tax liens, alimony, or contractors liens.) One downside, however, is that bank accounts are not exempt under state law. That being said, for most consumers who are drowning in credit card debt, there probably will not be much for the creditor to seize anyway, and if so, its unlikely that it will constitute enough to decline a settlement offer. On top of that, bank account information can be difficult for creditors to locate, unlike your home, which is public record.

In sum, these are major advantages for Texas debt settlement clients. Keep in mind that the vast majority of cases are settled successfully regardless of the legal advantages of the consumer. When you consider Texas state laws, debt settlement makes even more sense for the credit card companies, debt collection agencies, and most importantly, for the consumer.

Debt Settlement in Texas and Community Property Laws

If you are married, reside in Texas, and are seeking debt settlement services, you should enroll any and all debts that were accumulated during the marriage by both you and your spouse. Just because the debt is owned by only one partner the other partner is not exempt from having to pay for it as well under Texas law. Creditors know this and may use it to their advantage in the collections process.

Who Else Needs A Gimmick-Free Approach To Financial Freedom And Success?

We all have some common problems which are very serious. By this article I would like to raise the awareness and then propose a solution which will be beneficial to anyone who’s interested. Please allow me first to create the context for this:

It is clear to all of us that we live in a troubled world. We can all agree on that. Whether we are talking about individuals, organizations, systems or governments, it seems that the rule of law, the concepts of traditional values, decency and respect are all being pushed aside in favor of short term gain, control and easy or quick enrichment regardless of the consequences.

How do we manage in such a ‘dog eat dog’ world?

It seems that there are two general concepts we must embrace to not only survive, but to thrive in such a lawless and threatening environment;

A) We must ‘Get Ahead’
B) We must then find a way to ‘Stay Ahead’

Lord knows that when you look around and read the headlines that are telling us:
======
terrorism is rising
the tax man’s appetite is becoming more voracious
huge banks are reporting losses in the billions
the trillion $$ mortgage industry is upside down
big brother is tightening his grip
jobs are being exported
credit is tightening
recession is looming

…this environment spells trouble for the masses. If you are one of the masses, you are in trouble! The masses have virtually no ability to help themselves with individual creativity and independence so they look to government for help and the cycle or dependence intensifies and trend worsens. God help us all !

So what’s a person to do to escape from the herd of lemmings diving off the cliff?

First, you must re-align your thinking in a way that creates a new paradigm for complete self reliance. Nothing short of complete personal independence and sovereignty will do. This is paramount. Continue doing what you’ve been doing and you’ll continue getting what you’ve always been getting. You MUST break from the ‘herd’ mentality.

Then, you need to immerse yourself in the knowledge that you will need to acquire the skills required for the job. This knowledge will enable you to accomplish your goals and feed your new paradigms of personal self reliance. This will involve and include new ways of doing business, managing finances, creating wealth, preserving wealth, accumulating savings and resources much faster than ‘conventional wisdom’ would ever allow. But that’s only the finances part. You must also break free from the pharmacological medical monopoly that ensures poor health. You must break free from the legal entanglements that ensure your slavery and the list continues.

Do this and you have at least started the process in an important way.

The problem is the ‘how’, right? Or maybe the ‘where’ as in ‘Where’ do you find the resources, the people, the mentors the knowledge systems and support for such a massive personal transformation?

I won’t beat around the bush. Here is where you do it if you’re serious about getting results as soon as possible: The Venture Resources Group. Get with your referring member and get started now, so you can attend the live conference coming up soon in Panama.

Unfortunately, not everyone is ready financially for The VR Group. It’s an exclusive program and we recognize that it takes some preparation and financial capability to benefit right away.

This is where my Special Announcement comes into play.

I am very pleased to announce that VR Group has formed an alliance with the Continental Savings Club which accomplishes the following for you;

You can start learning about what freedom requires taking some small beginning steps.

You can start associating with like minded individuals for next to nothing

You can start putting yourself in position to crank up your financial prowess with everything to gain and nothing to lose.

You can position yourself to participate in VRG (a $1500 program) for only $99 one time.

With the Continental Savings Club you can easily share this critically important news with virtually anybody you care about.

Follow traditional thinking and you are in trouble! Conventional wisdom is not cutting it. You either break yourself free from ‘business as usual’ or you go down with the ship and risk your family’s future with you. The ball is in your court! It’s all up to you and the decisions you make for yourself.

We invite you now, to participate in the Continental Savings Club. It’s simple, it’s easy, anybody can benefit.

Check it out for yourself.

Opportunity is knocking !

A structured settlement often follows a life changing incident, whether it be positive or negative. Due to these circumstances, you may be faced with the need for a large lump sum payment rather than small monthly payments over a number of years. So, where do you turn? To a company that can buy your structured settlement from you and turn it into an immediate payment that you may use on whatever you see fit.

Each individual has different reasons for wanting to sell their structured settlement, however, first you must decide if it is the right decision for you.

The Benefits of Selling Your Structured Settlement

A large portion of those who receive a structured settlement can benefit from selling it for a lump sum payment. The situations listed in this section represent possible circumstances of individuals that may get the most rewards from selling their structured settlement.

If you cannot wait to receive small, spread-out payments over a long period of time due to a dire financial situation or hefty medical bills and/or lawyer fees. Many of the situations that can bring about a structured settlement can also stick the individual with such obligations.

If you and your family decide that this is the time to finally make that large purchase that you have had your eye on. For example, if you have previously been denied mortgages or loans and would like to take this opportunity to buy that dream home you have always wanted. Or if you have a child or children who are preparing to go off to college and you fear you may not have the financial means to support that dream otherwise.

If you have talked with a financial advisor and both of you feel that you could profit more by investing a lump sum payment, rather than waiting on monthly payments. If the money is invested properly, there is a chance that you could end up with more money in the end than your settlement was ever worth. However, this should not be a plan that is entered into lightly. You should work closely with a financial specialist and feel confident that you have found a great opportunity to invest in.

If you are of older age and feel that you may not be around long enough to receive a fair amount of your structured settlement. You may want to the chance to enjoy the benefits of your settlement or may want to secure part of it for your family after your passing. This way you can distribute the funds as you see fit instead of relying on lawyers or courts.

If you dont plan to use the money right away, but would rather put it into a savings or money market account to draw interest. This would be best suited for someone who has a very hefty settlement, can find an account with large payoff terms, and plans to keep the majority of the money in the account for many years.

No matter what your reason for wanting to sell your structured settlement, choosing this option puts you back in control of money that is rightly yours. The problem that many individuals have with their structured settlements is that the control over their money is left to lawyers, courts, and the company or persons paying out the settlement. You are now able to say where, how, and – most importantly – when you spend your money.

The Drawbacks of Selling Your Structured Settlement

For a few individuals, selling their structured settlement and receiving a lump sum payment may not be in their best interest. One must also evaluate these situations and determine if they outweigh the reasons you are considering selling your settlement.

First and foremost, selling you structured settlement means that you will receive less money than you would if you were to keep it. However, for many people considering this option, this seems like a win-win situation – they will get one large lump sum payment and the company they sold it to will make a profit in the end. The good news is that since you have several companies competing for your settlement, you can choose the one that will give you the a portion of the full settlement that you can live with.

Because you may lose out on a substantial portion of your settlement by selling it, if you are in a financial situation where regular monthly payments will only be a bonus on top of what you already make, waiting out your settlement may be in your best interest. However, if youre a senior, then you should also take your age and the length of your structured settlement into consideration. This would be the ideal situation for someone who is young enough that they have a great chance of living out the life of their settlement.

If you are a person who is poor at managing large sums of money, then selling your structured settlement may not be right for you. For example, if you are the kind of person who gets a large paycheck every two weeks and finds themselves running low on available cash at the end of those two weeks, then that may be an indication that needs to be closely looked at. In this type of circumstance, having your settlement portioned out to you on a monthly basis may keep you from spending it too quickly. Once your settlement is gone, you will be back at square one.

For those reasons, you should also not consider selling your structured settlement if you have an addiction to gambling, shopping, or drugs.

If your settlement was due to an accident that has put you out of work and the funds from it will replace your monthly income, then keeping the payments on a monthly basis may help your family keep your finances in order. However, even in this situation selling your settlement may be best for you if you would like to renegotiate your payments into a larger sum each month to shorten the life of the settlement.

Most individuals receiving a structured settlement can benefit from selling it to a company that can give them a large lump sum payment or shorten the life of the settlement, especially if they are older persons, an individual who has enormous expenses due to an accident or court case, someone in a critical financial position, or one who wishes to make a large purchase for themselves and their family. Finding the right company with terms that fit your needs is a key component of making your experience with selling your structured settlement a positive one.

Americans hear a lot about the shaky outlook for Social Security. In the future, the federal program likely will play a smaller overall role in Americans’ retirement plans.

One way to fill in the gaps of a savings portfolio is to put money in annuities. With an annuity, you pay a premium in exchange for guaranteed income payments at regular intervals. It is most often used for retirement purposes.

The basic types of annuities are equity indexed, fixed rate and variable. The major advantage of annuities is that they all guarantee benefits such as tax-free growth, the ability to pass money directly to heirs or charities and an income stream for life.

Over the past few years, equity-indexed annuities have gained a great deal of popularity. They offer interest or benefits that are linked to an external equity reference – a stock index like the S&P 500, for example. But you get a guaranteed minimum return in exchange for a limited maximum return; that is, you get less upside, but also less downside, to your stock-market investing. Your principal is never at risk.

Fixed-rate annuities, on the other hand, guarantee an interest rate and a declared minimum. They have traditionally been the most popular annuities.

Variable annuities provide more options. They enable you to invest in stock, bonds, mutual funds and money-market instruments.

Reputable financial companies, like TrueYield Financial, want to make sure investors are comfortable when purchasing annuities. Here are some tips for the potential investor.

* Be sure the firm you work with is not limited to offering just one company’s annuities. There are many options available, so work with an agent that can get the one that best fits your needs.

* Understand what you are buying. Talk to your financial adviser or agent about which annuity may be right for your retirement portfolio. Fully understand the annuity contract you are considering.

* Define your goals. Annuities can be used to accomplish a number of financial goals. For example, they can supplement your monthly income or provide emergency funds. Decide which purpose your annuity will serve.

* Ask your agent if you have a “free look” period to review your annuity contract and make sure you have made the right decision.

* Investigate whether or not a bonus annuity is right for you. Bonus annuities credit premium bonuses to allow a retirement saver to make up for stock market loss or to provide an immediate boost to the account value.

What Will You Do With Your Credit Card Debt? Credit Card Debt Solutions

With Consumer Debt at a National high, many Americans are faced with increasing credit card interest rates, minimum monthly payments, etc. It is becoming harder and harder to meet our monthly obligations each month and many consumers are looking for answers.
This article will give you a brief run-down of the options that are available today to help make the decision a little easier.

The first option is to keep doing what you are doing now. Make your monthly minimum payments, pay increasingly high COMPOUND interest and lose thousands of dollars over the course of several years doing so. According to Bankrate.com, the average household has approx. $30K in unsecured debt. Did you know that paying the minimum monthly payments will cost you $112K in interest and it will take you approx. 59 years, yes you heard correctly, YEARS to pay off? That is a definite financial choice that will put you in the poor house quicker than anything else. When you are paying interest like this, it does not even benefit you to save your money in a savings account, because the interest would not gain fast enough to offset the interest you are paying on your credit cards. So, what should you do? Consider the other options!

The next option is a Debt Consolidation. This is a generic term now being used but true debt consolidation is taking your current debt load and rolling it into a new loan, with interest over a longer period of time. You will either need some security like a home or bank account. You will pay interest that is non-compounded, which is definitely better than compound interest; however, you will spread your debt over a longer period of time and therefore shell out more cash than necessary. If you have a small debt load, under $10,000, This may be a good option for you if you dedicate yourself to making larger monthly payments than are required, paying off early if possible.

Another option is Consumer Credit Counseling . You will recognize these companies because they usually have a non-profit status. They are actually sponsored by the credit card companies themselves and they have what is called a fair share arrangement, meaning the credit card companies pay these companies to keep you paying them. Your money is not dispersed into an escrow account, but the cccs companies disperse it evenly amongst your creditors how they see fit. You will not experience any relief from your monthly payment since they will stay pretty much the same. Interest rates are lowered most often, but are not completely eliminated. I have heard many complaints that payments are skipped and facts show that most enrollees in this type of program quit after the first 12-24 months. The reason being is that your credit report is negatively affected closely to that of a bankruptcy. When lenders and loan companies see an account managed by CCCS, they view it the SAME as a BANKRUPTCY. These types of programs usually take about 5-7 years to complete. Once the program is completed, the creditors release comments about CCCS on your credit report. To Sum it up, you have no monthly savings relief, you still pay your entire debt plus interest and your credit is negatively impacted for 5-7 years.

The last option I will outline is Debt Settlement. This type of program is becoming increasingly popular because of its many benefits to consumers. Debt Settlement Companies are experts at negotiating your debt down, on average for all cards/accounts, to 40% to 70% of what you owe. One card may settle at 80%, even 100% in some cases, the next card could be 30%. The end result is an overall total average of 40% to 70% of all the cards. This will be based on who your creditors are and their criteria. Creditors are directed to speak only to Certified Debt Mediators once enrolled and the process begins. Enrollees are set up on monthly payment plans, usually at a savings of 50% out of pocket providing immediate cash flow. You will be set up with one monthly savings amount, which will be deposited into a secured trust account at a Bank. Savings amounts are YOUR money. Settlement Companies have no access to it, beyond their fees, and neither do the creditors. It is a secure, protected trust account. This is the money, as it accumulates, that will be used to settle your debts. The consumer will have control of their own funds throughout the whole process. The average time a consumer is in the program is 12-36 months. During this time, the creditors will be reporting late pays on the consumer’s credit report while this process is going on. As settlements are reached with each creditor, the creditors will report a settled in full, paid with a zero balance. So, ultimately, at the end of the program, then your debt to income ratio will have improved and your credit will begin to heal itself for the future. In addition, you will not have the long term effect of a public record as you would with a bankruptcy.
Debt Settlement Companies do charge fees for their service, because creditors are not in alliance with DSC’s and do not give them kick backs for payments like in Consumer Credit Counseling programs. The fees average 15%-18% depending on which company you choose and the quality of service they provide. Most established firms will offer an online back office in which you can track your payments and settlement activities. Often times, fees are looked at in a negative light. But if you actually do the math, the savings still add up to substantial amounts and your credit gets back in shape pretty quickly. For instance, for $30K in debt and fees at 15% or $4500.00, you will still have an average savings of approx. $10,500. That is nothing to sneeze at! If your credit is a concern, then you must weigh your priorities.

Becoming debt free will give you many more advantages in your long term financial path, then two years with some late marks on your credit report. You may even consider credit repair after you are out of this type of program.