Our Guide to Debt Consolidation

If you've run up the balance on your credit cards and paying back the entire balance seems impossible right now, you might want to consider credit card debt settlement.  In a nutshell, this type of arrangement is not for those of you that just don't feel like paying for all those things you've bought recently and charged on your card.  Negotiating with you credit card company is only to be used as a last resort - here's why.

There is no doubt that some Americans are carrying a lot of credit card debt - and that can sometimes lead to trouble.  Here we're going to discuss some of the options you have when it comes to managing your credit card debt.  For example, credit repair services, self help, and even budgets - which are all part of our do-it-yourself debt control process.

If you've been thinking about making a large purchase such as a new home or car, you may be faced with a decision that involves a choice of buying credit insurance.  Here we're going to discuss the costs and benefits of purchasing credit insurance as well as the types of credit insurance available to consumers today.

If you're one of the millions of Americans with credit card debt, recent changes to the credit card minimum payment formulas mean you'll be paying more each month in an effort to drive down outstanding balances.  The change comes as a result of a 2003 suggestion from the Office of the Comptroller, which asked banks to match the new standard by December 2005.

When it comes to debt, the year 2007 will be remembered for the turmoil in the home housing market.  But when we're talking about debt, the news doesn't always have to be bad.  In fact, the time has never been better to reflect on past spending habits and start developing a plan to get out of debt.

Let's say that you wake up one day to find yourself knee deep in debt.  You've been outspending your income for quite some time and everything and everyone suddenly catches up with you.  Perhaps you've even let things get so out of control that now you're afraid of losing you home or you car.  You need help with debt elimination and you're not alone.

If you've got heaps of credit card debt, there is no need to feel like you're all alone.  In fact many people go through a phase in their life when they experience a "financial" crisis.  In this publication we're going to talk about how to go about eliminating credit card debt including a discussion of how much debt the average person carries and a process for reducing or eliminating that debt.

If you are looking to eliminate credit card debt you are not alone.  Americans carry just an enormous amount of debt.  In 2009, consumer debt is expected to reach an estimated 2.5 trillion dollars according to the Federal Reserve.  That is nearly a 12% increase over the last five years.  And credit card debt alone accounts for over $886 billion dollars.

Maybe you've got a family budget that's helping to keep you out of debt.  Or perhaps your budget is working so well that you're running a surplus and finding yourself thinking about this question:  Should I start paying down my debt or invest the money?  Fortunately there are a couple of simple rules of thumb that can help you make the right decision.

Owing a credit card is a convenient alternative to carrying cash to make purchases.  But using a credit card has its drawbacks too - especially if your desire to buy goods or services overshadows your ability to pay for them.  Prepaid debit cards offer consumers both the convenience of electronic purchases, as well as protection against overspending.

It's funny, we're taught a lot of things in school, but how many of us were taught about the basics of putting together a household budget?  After all, don't most youngsters dream of financial independence one day?  Isn't the American dream to eventually own a home?

A Budget Worksheet can come in handy if you've never put a budget together.  Creating a budget is probably the first line of defense against runaway debt and we've described how to get started putting together a household budget in many of our debt consolidation articles.  We realize that many people simply do not have the skills or time to put together a budget worksheet so we thought we would give you a jumpstart in this publication.

In Budget Worksheet Part I we explained what you need to get started in creating an annual budget and where you can find these budgeting tools - for free.  We also walked through the basics of creating a healthy and sustainable family / household budget - over the long term income must exceed expenses.  Finally, we started using the budget worksheet and worked our way down through the income section.

It's not always easy to meet our financial obligations each month.  And that's where creating a family budget can help out.  Nearly every day we have multiple financial demands placed upon us.  Whether it is grocery shopping or paying the monthly electric bill, we're faced with family budget decisions all the time.

If you're wondering why you can't seem to save money each month, then we know the answer.  Saving money can be explained using one simple relationship.  When household income is greater than household expenses, then you're saving money.  On the other hand, when household income is less than household expenses, then you're going into debt.

According to the National Bureau of Economic Research, the United States entered a recession in December 2007.  And while economists might define a recession as a reduction in a country's gross national product, indivdual families might be faced with financial hardships, including the loss of a job.

For many of those in need, debt counseling can be a valuable service in helping them to get them back on the right track.  Debt counselors can help educate consumers about financial matters such as money management or budgeting.  They can also help consumers to reduce debt and assist their clients in avoiding things like bankruptcy or even the loss of one's home.

When most people think about debt solutions, the obvious option appears to be debt consolidation.  But really there are several different solutions to the problem of mile high debt.  That's one of the good things about this world we live in - we unusually have options.

Managing your debt properly is extremely important to the financial wellbeing of your household.  If mismanaged, your household debts can quickly increase until you reach a point where making payments become difficult.

Perhaps you've finally reached the conclusion that you need some relief or help getting out of debt.  Perhaps a friend has told you how a nonprofit debt counseling session is really the way to go.  That seems to make sense right?  Why hire a for-profit counselor when you can hire a non-profit debt counselor?

In this publication on debt consolidators, we're going to talk about the different types of specialized services in this area.  For example, we'll briefly discuss consolidators dealing with student loans, Christian / nonprofit consolidators and private lending institutions.  We're also going to finish up with some of the alternatives you have to debt consolidation loans.

Using a debt consolidation service can be a great way to finally put all of those outstanding debts together in one place.  With this type of debt service, you can covert all of your smaller loans and outstanding credit card balances and leverage the terms you can get with one larger loan.  But all of the benefits of using a debt consolidation service come at a cost.  So let's make sure you are prepared to make that big step.

If you haven't heard it yet, you can be sure that money talks.  And deDebt consolidation is no different than any other discussion about money.  If you're interested in finding a consolidator then you can bet there are plenty of companies willing to listen - including those now offering online debt consolidation services.

Many Americans seek out the help of Christian debt consolidators and for good reason.  According to Federal statistics, about 4% of the U.S. population has $10,000 or more in credit card debt.  To most of us that number looks pretty big.  Even more surprising is that Americans owe an estimated $750 billion on their credit cards.

Seeking the help of nonprofit debt consolidation companies can certainly help you dig your way out of debt.  In this article we're going to explain what no-profit debt help is really all about and what you can expect from any company offering debt consolidation services.

If you're one of those individuals that have unpaid bills reaching a point where they are becoming overwhelming then you might also be thinking about contacting a debt consolidator.  Basically, a debt consolidator is a company or service that helps you to reduce your existing monthly payments by consolidating them into a more manageable form.

If you're thinking about debt consolidation, then you're probably trying to figure out if your best option is a debt consolidation mortgage or a consolidation loan.  For those of you trying to decide which option is the best way to go, here are some of the more important things that you should consider.

If you're like many Americans, you may be considering a debt consolidation loan as a one way of organizing all of your current debt commitments.  As we've mentioned in our article on credit card debt statistics, you're not alone if you find yourself with growing concerns over the amount of personal debt you've accumulated.

A car title loan is a loan where the vehicle itself is provided as collateral to the lender.  These loans afford borrowers the opportunity to acquire short-term cash in as little as fifteen minutes.  Unfortunately, this speed and convenience comes at a cost to the consumer.

The rent-to-own business involves dealers that rent homes, furniture, cars, appliances, electronics, and jewelry to consumers.  A rent-to-own arrangement provides the customer with immediate access to these assets for relatively low weekly or monthly payments.

If you cannot wait for your tax refund, then you can choose to find a lender that offers a tax refund loan.  These short-term loans use your federal income tax refund as collateral, and provide taxpayers with fast access to their refund dollars.

If a cash advance is needed to cover short-term expenses, then borrowers have the option of taking out a payday loan.  As the name implies, this type of loan is paid back when the borrower receives his or her next paycheck.

The latest statistics from the Federal Reserve indicate that the total amount of consumer debt outstanding remained fairly steady in 2009.  In case you're wondering the total amount of consumer debt in the United States stands at nearly $2.5 trillion dollars - and based on the latest Census statistics, that works out to be nearly $8,100 in debt for every man, woman and child that lives here in the US.

Over the past decade we've seen lower interest rates, a robust housing market, and virtually unlimited options when it comes to personal loans.  The end result is that Americans are borrowing money at a record pace - consumer debt is on the rise.  Still the question remains - What are the real versus perceived risks of rising consumer debt?

Your credit score is pretty important to your financial health.  That's because credit scores are used by lenders and creditors to help them predict how likely you are to pay your bills in a timely manner.  Higher credit scores can also lower your cost of borrowing by allowing creditors to extend you a loan at a lower than average interest rate.

If you've ever spoken to a creditor or lender, they may have referred to your FICO® credit score or simply your FICO score.  That's because lenders have several ways of evaluating your credit risk and your FICO score is one of the primary tools used by these institutions.

Fair Isaac recently announced plans to change its credit scoring formula to "ensure the continued reliability and predictive powers of FICO scores."  The new model, named FICO 08 is expected to make its way into the credit scoring process some time in 2008.  The model replaces the existing FICO model, which has remained relatively unchanged since the 1980s.

Regardless of your current credit score - good or bad - it never hurts to take steps towards improving that score.  We're going to run though some basic tips for improving credit scores.  But first were going to briefly explain how those scores are calculated, because that understanding will allow you to better appreciate our recommendations on how to improve your credit score.

Let's face it, many of us are just plain competitive and some of us are curious.  Then there are those that are worried about qualifying for a loan.  So what do these groups have in common when it comes to credit scores?  They all want to know how they compare to the national average credit score.

In an attempt to better service the creditworthiness assessment market, several of the credit bureaus have announced what are termed "thin-file" credit scores for individuals with "thin" credit histories.  By doing so, these credit bureaus allow lenders and creditors to reach an under-served market of Americans with little or no traditional debt payment records.

While many companies may throw around the term "credit report," there are only three companies in the United States that compile and publish credit information on consumers - TransUnion, Equifax and Experian.  These three credit reporting agencies are used by creditors to help figure out the risk they are taking by lending you money.

The Fair Credit Reporting Act or FCRA is full of the legal terminology that most of us would rather not deal with.  We're going to help you understand your rights under this act and by doing so you'll gain a better appreciation for how the entire consumer credit reporting industry works.

Back in 2005, Congress passed into law some wide-reaching changes to the bankruptcy process.  At the time, it seemed these laws were aimed at making it more unpleasant for individuals to file for Chapter 7 protection.  However, one of the unintended consequences of that legislation appears to be an increase in the cost of bankruptcy.

On April 20, 2005, several new bankruptcy law changes were passed and they took effect on October 17, 2005 - exactly 180 days after its signing by President George W. Bush.  That's good news for the credit card industry since they've been pushing for tougher bankruptcy laws for the last eight years.  For many consumers, this new law meant a rush to file for bankruptcy before the October deadline.

Businesses that are no longer interested in continuing to operate, or individuals that do not have enough income to repay their debt, can seek protection from creditors by filing a Chapter 7 petition in bankruptcy court.  But filing for Chapter 7 comes at a great cost.  It requires the debtor to sell off all their assets and can damage credit ratings.

When businesses and individuals are failing to meet their financial obligations, they have the ability to file for Chapter 11 bankruptcy protection - although it is more common for individuals to file a Chapter 13 case.  Unlike Chapter 7 cases that involve the liquidation of assets, in a Chapter 11 case the business remains in control of its operation while a court oversees the operation of that business.

Also known as individual debt adjustment, Chapter 13 bankruptcy allows individuals with a source of regular income to build a plan that allows them to repay some, or all, of their debts.  Under this bankruptcy chapter, repayment to creditors occurs over the course of three to five years.

If you're thinking about applying for a new credit card, or even buying a new home, you might want to take a look at your credit report before filling out an application to make sure they're aren't any errors on your report.  The good news is that it won't cost you a penny to get a copy because you're entitled to a free credit report once every 12 months.

If you've been paying your bills late - or not paying them at all - then you might be getting a call from a debt collection agency which is usually the final step in a lender's dunning process.  If that's true, then you should know your rights under the Fair Debt Collections Practices Act.

Companies are in the business of making their shareholders money.  And to ensure their shareholders are getting what they deserve, companies need to carefully monitor and control the debt of their customers.

A number of identity theft regulations were signed into law as part of the Fair and Accurate Credit Transactions Act (FACT Act).  In particular, FACT Act requires financial institutions and creditors to develop and implement written identity theft programs by November 1, 2008.

If you don't think identity theft is something you need to worry about, consider this - recently published statistics on identity theft indicate that nearly 4% of the American adult population claimed to be a victim of identity theft in 2005.  Furthermore, one study indicates that the average amount of money obtained by the thief was nearly $1,700.

Perhaps the single most important document that can be used to protect against identity theft is your credit report.  That's because credit reports contain a wealth of information when it comes to financial transactions, as well as the process of accurately matching those transactions to individuals.

If you're a victim of fraud or identity theft, then there are steps you need to follow to report your identity theft to various authorities.  By taking the proper corrective action, you'll reduce the risk of further theft, and start a process that will clean up any of the inaccurate information on your credit report.

In today's marketplace, you'll find a growing number of companies offering services aimed at helping consumers fight against identity theft.  Fortunately, there are also steps you can take to help reduce your risk of becoming a victim of identity theft.

One of the ways to combat identity theft is to freeze your credit report.  It's effective in preventing a thief from opening an account or new line of credit in your name.  But credit freezes don't deter all instances of identity theft.

If you're worried about identity theft, then you might want to consider enrolling with a credit monitoring service.  These programs will monitor your credit report, and will notify you when a change or inquiry is made to your report.  These services may include locking / unlocking your credit report, automated notifications, as well as access to your credit scores.

If you've ever applied for a loan, from a mortgage to a credit card, you've probably heard the term "credit score." You may even know that credit scoring is a way for lenders to evaluate a person's credit worthiness using a mathematical formula. But you may still have questions on what information goes into the evaluation, how the score is calculated and how it is different from your credit report.

Mark and Beth, a young married couple in their twenties, established a goal to buy a home within the first three years of their marriage before starting a family.  They budgeted and used their money wisely in order to save for the down payment.  Whenever they purchased something they always paid cash - no credit cards for them.  Why waste money by paying interest to a credit card company?

There's that horrifying word.  The one that makes so many people cringe at its very utterance.  It seems like they could make a very good spooky movie with the title "You Have to BUDGET!"  Yeah, that's a little dramatic but I have been helping people with their personal finances for almost 30 years and it's not too far off base.  The word scares the daylights out of some people.

It's no surprise that many individuals seeking personal loans to start a business or for personal needs sometimes have trouble getting such financing - And for a good reason. They often overlook one great source of personal loans - namely Private Lenders. That's exactly what I'm going to talk to you about in this article.

How much do YOU owe on your credit cards?  The average American family is now over $7,000 in debt just on their credit cards. That debt generates an interest charge of over $105 each month if your card charges the average 18%. If you have missed a payment or made a late payment (even by one day!), you may be paying up to 27% interest or over $157 each month.

Last year my credit card company sent me a letter telling me that if my credit card payment was even 1 day late, they would charge me a late fee of $29. This year they sent me a letter telling me that if my credit card was even 1 day late, they would raise my rate from my current low rate to 24.99%. Next year I expect them to send me a note indicating they're going to send Knuckles, their credit card enforcer, over to break my kneecaps if my payment is late. One kneecap if it's more than a day but less than a week. Two kneecaps if it's more than a week.

If someone said to you, 'credit cards can save you a ton of cash', what would be your answer?  If you're like most people, you'd probably think you were being had.  Many of us open that monthly statement with dread... if we open it at all...

Meg's finances were okay, but she wanted more than to just barely meet expenses. So she decided to start an Internet business. She searched around, found a reliable company that she liked, products that she felt comfortable using and promoting. But she didn't have the money to promote her business. What did she do? What any smart business owner would do. She borrowed the money to invest in herself.

In spring, young thoughts may turn to love, but for many homeowners, their thoughts turn to a room addition or a kitchen renovation. And as low interest rates and rising real estate prices help more homeowners build equity faster, many are using that equity to make home improvements. Borrowing against the equity in your home makes sense for many reasons, but you should consider all your options carefully before making a decision.

As they say, "Knowledge is power." Many times people either act on false information or fail to act because they didn't know what could be done to their benefit. This is the case in many areas of life, but on the top of that list is money. And in the money category you will find lots of misinformation about credit.

Figuring out finances may not be romantic, but discussing your views on money and your fiscal fitness before getting married can save you and your spouse some unpleasant confrontations down the road.