Top Ten Ways to Find Yourself in Bankruptcy – Debt Consolidation Help
10. Not having a plan in case of emergency
A lot of people cut their budgets very close. If you have you money portioned out precisely for your regular expenditures and you haven’t left anything in the budget for emergencies, how will you pay for repairs if your car breaks down? If your house suddenly needs repair? If you have emergency medical bills not covered by your insurance? It is important to make sure you have a plan to cover emergency spending. If that means cutting things out of your regular budget that may not really be necessary, make sure you do that.
9. Spending money on luxury items you don’t need
This one should be obvious, but a lot of us violate this simple rule anyway. When you see a new car, an article of brand-name clothing or piece of electronics equipment, ask yourself a couple of questions. 1) Is there money in my budget for this? And 2) Do I really need this? If it’s an impulse buy, odds are first answer is no. The second answer is probably no in any event. Think about whether you’d rather have the item or financial stability.
8. Buying extravagant gifts for friends and family
This is basically the same as the previous item on this list. The difference is that some people have a problem not with buying things for themselves, but with buying things for others. Selflessness is commendable, but it doesn’t have to be as expensive as you might be making it. It’s not going to do your friends and family any good for you to go bankrupt buying them extravagant birthday presents.
7. Letting small expenditures add up
If your money is disappearing every month and you can’t figure out where it’s going, odds are you’re not keeping track of minor expenditures. Say you take a trip to the grocery store to pick up a gallon of milk for three dollars. While you’re there you pick up some ice cream, maybe a twelve pack of soda. You spend three dollars on candy for the kids in the checkout line. Swing through a drive-through on the way home to get some food. Why not get the large for only a few cents more? Each of these items individually may not be very significant, but by the time you get home, you may have spent $30-$40 during you trip out for some milk. If these sound like the kind of expenditures you might make without keeping track, that’s probably where your money is going.
6. Not saving money
If despite your best efforts you find yourself owing more money than you expected, it can be a huge relief to realize you have some money saved up that can help gt you out of trouble. Try putting a percentage of every paycheck into a savings account you never touch. If something you didn’t expect rears up and you have to pay a lot of money, you may find that you can take care of it without declaring bankruptcy.
5. Not keeping track of your funds
How much money do you currently have in your checking account? How about your savings? What have you put on your credit card in the past week? If you don’t know the answer to all three of these questions, you’re probably going to wind up overspending.
4. Putting too much on your credit card
Credit card debt is a serious problem in this country. One main reason is that people treat them as free money without really planning how they will pay off the money they put on them. Another is that people don’t think about the interest rate they will have to pay on purchases on their credit card. If you are making a purchase on credit that you could pay in cash, it may be better to use cash than to risk interest rates running away from you.
3. Letting late fees build up
Almost everyone is late with a bill from time to time. What can really kill you is being late with your bills so often that late fees and surcharges start to build up. Before long, the late fees you pay every month may be as large as any of your other bills.
2. Ignoring bills
This should be obvious, but some people simply don’t take action. If you don’t pay your creditors, they are within their rights to take collection action against you. Most of them, however are willing to be lenient if you will simply talk to them. A lot of companies will allow you extensions if you need them as long as you talk to them in time. Give it a try.
1. Spending more than you earn
Everything else on this list is derived from this one simple rule: Know how much you make, and spend less than that. It’s sounds simple, but it can fell complicated. Once you start keeping track of you earnings and expenses, however, you’ll probably be surprised at how easy it becomes.
Debt Settlement / Debt Consolidation Help / Debt Settlement Services
Watch the video related
www.realcase.com FREE help on a personal debt consolidation program, plus advice on private bad credit lenders, information on private bad credit lenders & debt consolidation non profit.
Help answer the question
Does debt consolidation work and help improve your credit score?
I am really bad with paying bills and my credit has taken a hit these past couple years. I make enough money where I should be able to pay everything with no problem but for some reason I continue to struggle. Do you think a debt consolidation would be best for me and to help me improve my credit score? Does this really work?
debt consolidation
Tags: debt consolidation help, debt negotiation companies, debt negotiation company, debt negotiation firms, debt settlement, debt settlement companies, debt settlement company, debt settlement programs, debt settlement services
This entry was posted on Saturday, July 18th, 2009 at 4:23 am and is filed under Debt. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
July 18th, 2009 at 5:20 am
Debt consolidation loans are usually a rip-off, extending loans way out and you end up paying a lot more in interest, plus the loan origination fees increase the amount owed.
Instead:
Transfer credit card debt to lower interest rate cards, some will give you 0% for a transfer. Do this before deciding which one has the highest interest rate to pay off first.
Pay at least double the minimum monthly payment on the credit cards and car loan. This extra will go entirely towards the principal, and reduce the debt a lot faster.
Pay off the highest interest rate credit card (or loan) first.
It is also a good idea to pay extra principal on your house, to reduce the interest and increase the equity.
Sell the car and get a used one that costs less if you have to.
Destroy your credit cards and don't use them again, instead get a credit/debit card that pays interest and cash back for any charges. So you make money when using it instead of pay money.
July 18th, 2009 at 5:57 am
If you have 10k in the bank, why not use half of it on your debt. That would make things much more manageable.
Then get yourself on a written budget and attack the other 7500.
July 18th, 2009 at 7:38 pm
If they are high interest cards yes
July 19th, 2009 at 2:31 am
Nope. Most charge insanely high fees and most don't work. You are only going to improve the situation by actually paying attention to your finances. If your situation is dire – try Dave Ramsey. He's hard core but his plan works – but only if you grow up and get serious.
July 19th, 2009 at 8:21 am
Hi, Jimmy:
First, I already answered a related question, so I've copied that answer below after the dashes.
If your number one objective is to simply improve your credit, you could just wait it out for another 2 years until the debt is 7 years old. You can then ask for it to be removed from your credit report. If this is your objective, then don't pay the debt. Records on your credit report are good from 7 years of last transaction so any payments or charges you make resets that 7-year clock.
Personally, I've never used a debt consolidation company because I've felt capable of trying the same tactics myself. Granted, these companies are professionals and may get special "deals" and privileges that I wouldn't get, but I've still been pretty pleased with my own results.
Before using a debt consolidation company, I recommend trying your own hand at it. Contact your creditors. Before you do, determine how much you can afford to pay in a monthly payment. Even better, if you have some money saved up as a lump sum, you can try to pay them off in a couple of chunks. The more money you can give them at once, the better your negotiating power.
If you're in collections, ask the creditors by how much they'll reduce the total amount owed if you pay now/in 30 days/in 60 days/within a year.
If you're not in collections yet, ask the creditors how much they'll reduce your total interest. Some companies (e.g. Discover used to do this) will even suspend interest entirely while you're in re-payment. Of course, you can't use the credit card during that time, but you're saving money and salvaging your credit.
Good luck!
———————–
There are several benefits to credit card consolidation:
- Convenience (only one or two payments)
- Easier to manage (less likely to forget a bill!)
- Possibly a lower combined interest rate
Generally, when companies help you by consolidating your credit cards, they contact the credit card companies on your behalf and try to negotiate a lower interest rate (you can do this on your own, by the way). Then, the companies can take one of several methods for that single consolidated payment. Options include…
- Financing your debt themselves and then THEY pay your creditors
- Helping you find a financier to consolidate your debt
- Having you roll all of your debt under one of your existing accounts and pay off the others
As such, credit card consolidation does not affect your credit rating. In fact, the results of consolidation are often positive simply because it's easier to manage and you may pay less interest.
All this being said, I've never used a consolidation agency because I never wanted to pay the fees. Instead, I contacted my creditors myself and asked for the best possible interest rate they could give me, and asked what kind of arrangements I could make to manage debt. In general, they all worked with me.
By the way, here's one thing to consider when paying off your debt: Bad credit falls off your credit report 7-10 years after your last transaction. So, if you have a liability that is 6 years and 10 months old, carefully consider whether you pay it off or not. If you touch that account at all, even if it's to pay it off, suddenly that 7-year period is renewed. So, the choice you have to make is: Do you want something that was bad and is now paid on your credit report for another 7 years, or do you just want it gone entirely?
There are some ethical questions there, too (e.g. if the debt was yours and you were above 18 at the time, you should pay the debt to be ethical). These are questions that only you can answer. But, when working with a consolidation company, make sure they only consolidate the accounts you want them to touch.
Good luck.
July 19th, 2009 at 1:41 pm
You don't need anyone to do it for you. All they do is negotiate your debts for you and collect a fee. You can do it yourself!
Call all of them and work out a payment plan and try to get your interest lowered or stopped.
Then, make the minimum payments on every one of them. On the lowest dollar value, put all your extra effort toward paying it off. Once it is paid off, then roll that extra money to the next largest balance. Continue this snowball until all your debts are paid off.
You proabbly need to cut your expenses back to the bare minimum. Get rid of cable, cell phones, internet, etc. Lower your electric bill, gas bill, water bill, etc. Don't eat at a restaurant until your debts are under control.
Try to increase your income by getting a second job. If you have a car with payments, get rid of it, and buy a good dependable used car for CASH.
Go to the library and get "The Total Money Makeover". Read it and follwo it carefully.
Go check out Dave's website as well.
http://www.daveramsey.com
July 19th, 2009 at 10:38 pm
Most of the debt repair/consolation/settlement companies want their fees up front and leave you credit trashed.
Check nfcc.org for listings legit non-profit credit counseling services. They can help you set up a budget and work out clearing up your debt.
You can tackle your debt yourself by putting every extra penny on the highest interest rate debt, while making minimum payments on the rest. When the highest is paid, move to the next, till they are all paid off.
It will take 2 or 3 years but if you work at it, you'll be out of debt with a good payment history.
July 20th, 2009 at 4:41 pm
Save your money as they will charge you a fee. If you are having problems, then call the creditors directly. My son was going to go bk, but when he called the creditors, they offered him a deal to pay off the cards at something like 67 cents on the dollar and he got to keep his cards and accounts intact.
If you haven't had the problem yet with any of the bills, I would suggest taking a small equity line on your home to pay off the bills, unless you can make an arrangement with the doctor's office. At least the interest there is tax deductible and the interest on credit cards and other such bills aren't. The payments on a equity line are surely more affordable than the amounts on the doctor bills.
Good luck
Heybuilds' answer is correct to a point. However, if you have control of all your bills, and the doctor's bills are the problem, and if you can't pay them and cannot come to an agreement with the creditors, and cannot pay them off timely and do not find a way to pay them off, then they can go to court, get a judgment against you, and then you will be forced to come up with a way to pay off the judgment plus court costs. If you are able to go and do the equity line, the cost might be less than going to court.
July 20th, 2009 at 6:15 pm
Call the hospital and see if they have any programs that can help. Last month when I ended up in the ER with my gallbladder we got put on a payment plan where we only pay off $28 a month until the bill is gone. The surgeons office also worked out a plan where we actually only have to pay half of what the bill would have been (because my dingbat husband cancled our health insurance back in May *smacks head against wall*).