Budgeting is an important aspect of living and a person who knows how to
budget will go a long way in this commercialized society. Budgeting has a lot to
do with keeping the expenses less than the total income of the household. Those
who are very good at budgeting can come up with savings even if they have
meager incomes.
Debt Relief

The problem sets in when a person fails to make an efficient financial plan and
his expenses exceed his earnings. When this happens, a person has no choice but to borrow money to make up for his financial deficiencies. Borrowing once or twice because of a mismanaged financial plan is normal but when borrowing
becomes a regular thing that can put a person in serious debt problems. A person who borrows money from another is said to be in debt. The debts of a person can be minimal or can reach up to millions depending on the credit limits
of each person. Sometimes, a person who has assets but isn’t liquid can use these assets to get cash. Under this term, the person can be indebted for an amount less or more than his assets.

There are laws that provide that a person can never be forced to render services as payment for his debts. This is called undue servitude and is prohibited by the laws of some countries. However, there are situations when the person who is in debt opts to settle his obligation by rendering his services. This can happen if a person is so talented in his craft like painting and he opts to pay for his debts by creating a painting of the creditor or the assignee of the
creditor. Sometimes, a person can pay his debts gradually or on an instalment basis.

When a person dies, the law has provided for a hierarchy of preferences in the payment of such debts. Of course, payment of taxes to the government will always come first. The second priority for debt payments includes funeral
expenses of the deceased and the payment for the wages of people. Debt is really just a simple concept, which provides that a person who borrowed something from another is duty bound to pay that debt. However, the concept of debt becomes more complicated with the introduction of other concepts like mortgage, interest rates and other charges. Interest makes most debts double or even triple in amount. More often, the interest rates due for a certain debt is even higher than the principal amount borrowed.
A person who wants to get credit can do so in the form of a loan. A loan can either be secured to unsecured. A secured loan means the debtor borrowed some money and supported the loan by collateral or a security for the loan. The
security or collateral can come in the form of a house and lot, a car or any asset of the debtor. An unsecured loan means otherwise. Most creditors require a security before granting a loan because it gives them something to hold on to or to forfeit in case the debtor defaults in payment. When the debtor fails to pay the debt within the agreed timeframe then the creditor can foreclose the security or the collateral.

However, having an unsecured loan doesn’t mean that the debtor can renege on his debts. When the debtor fails to pay his loans, the creditor can still run after him by filing a case in court. When this happens, the debtor who has no cash can sell some of his assets to pay for his outstanding loan. Being in debt is common even for the rich and the famous; the only difference between them and the common people is that their debts can be in the millions since they have more assets to support their loan. Unsecured loans most often have higher interest rates to make up for the lack of security.  Even third world countries are indebted to more developed countries. However, the debts of a country can go on forever because they keep on paying their loan but they also get new credits as their credit ratings go up.

Credit Magic Repair

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Debt Free Oh What A Dream.

Is it possible to get out of debt and remain debt free in today’s society? Well of course it is but it will require a completely different mindset to the one most of us currently have.

Where The Culture Started.

If you are old enough to remember your grandparent’s way back in the 50’s and 60’s and of course any-time prior to that. They did not live on credit. In fact the very idea of buying on credit was something to be a little ashamed of.

Now they did not enjoy the luxuries we now take for granted but were their lives any less fulfilled because of that? I don’t think so. In fact probably the opposite applies. No worries about drowning in debt for them.

I know things are a little different in the US than in the UK but I can recall having credit restrictions imposed on us by the government. A minimum deposit of say 25% or even 33.3% was required to purchase luxury goods on hire purchase (a washing machine was a luxury item!) Motor cars were treated the same way. This was in the mid 1960’s.

The turning point came with the introduction of the “personal loan” followed by the “Credit card”. All deposit requirements disappeared and the consumer boom was on.

Today’s younger generation know little of this of course and cannot understand why they can’t have what they want now!

But don’t blame them. We sowed the seeds. We often lead by example.

How Do We Reverse the Debt Cycle?

Like I said previously, a different mindset is required and to be honest there is already a new mood sweeping across the western world. There is a new sense of extravagance is bad. The very wealthy are curtailing their lavish displays of wealth in the face of other people’s difficult circumstances. This can only be a good thing.

The budget stores are doing well, whilst the expensive ones are closing as people everywhere tighten their belts.

Now it’s Cool to Shop in a Charity Store.

Yes indeed it really is cool. Even celebrities have been spotted coming out of well known charity stores clutching their bags. So you no longer need to feel embarrassed by shopping there sometimes.

Now, How to Get Out Of Debt.

Well there are plenty of web sites and articles detailing the mechanics of what you should do but so often we bury our heads in the sand until it is too late. Obviously the action required depends on individual circumstances. A little debt or drowning in debt?

If you simply want to get out of debt and be debt free and you only have a modest amount of debt, then it is relatively easy. You simply pay as much as you can afford off the most expensive debt (the one charging the most interest). When that is cleared you allocate the money you were paying to the first debt to the second most expensive. This debt will be cleared quite quickly as the payments are so much more now. You carry on this cycle, as each debt is cleared adding the payments you were making to the next debt until all debts are gone and Hey Presto you’re debt free!

Well that’s OK if you only have a couple of credit card debts and maybe a car loan but what if things are serious and you really feel as though you are drowning in debt?

Debt Advice.

If you have serious debt problems like mortgage arrears and court orders, perhaps creditors giving you a hard time. You can get them stopped. Just get some good debt advice.

There is a huge amount of debt advice available on the web but please be careful. A lot of the commercial operations charge huge fees which are often hidden and you don’t need them.

I work for a Debt Advice Charity in the UK and as a registered charity all our advice is free and confidential. There are similar charities all over the US and throughout the western world. Just make sure they are a genuine registered charity, as there are commercial companies cloning charity websites to fool people.

I won’t go into all the mechanics here of the various options but believe me the best advice is to take action. Don’t borrow more or try to consolidate. Get some good debt advice and you will no longer be drowning in debt and one day you may be debt free and happy again.

Jack  was a Financial Advisor for many years and now works as a debt consultant for a debt advice charity as well as earning a living on-line.

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The nation’s economy may be drowning in debt but as it is all of us who are going to have to pay for it we are faced with two big problems.

How to generate sufficient income to pay the increase in taxes and the reduction in benefits which is definitely on its way.

How to service our own debt.

Working as a consultant for a debt advice charity in the UK, it has become glaringly obvious that we are heading into a debt epidemic. The whole nation is drowning in debt. There are going to be more personal bankruptcies and Individual voluntary arrangements during the next 12 months than we have ever witnessed in our lifetime. This of course added to the business bankruptcies which are inevitable, causing further redundancies and more personal debt problems and the cost is incalculable. There is no way a recovery is coming in the foreseeable future.

The only people who are safe are the civil servants. The worse it gets for the rest of us the better it is for the army of bureaucrats. However even they will have to dig deep with the increased tax levels.

Those of you in safe occupations like essential services and teaching should be okay but even you will face a more expensive future. There will be few pay rises and make the most of the low interest rates because it won’t last long.

The commentators really make me laugh. When things are really good they predict doom and gloom and when things are dire, they see “The green shoots of recovery” Ignore them all and try to protect what you have.

If you are having difficulty servicing your debt there are some steps you must take to safeguard you and your family.

1. Pay the most important things first. This may sound obvious but you would be amazed at the way people manage their finances. Mortgage/Rent is priority number one. (You must keep the roof over your head).

2. Secured loans (any debt secured against your property)

3. Local rates/Council tax (depending where in the world you are)

4. Government taxes IE income tax VAT etc. (not paying these can send you to prison)

5. Utilities (gas, electricity, water)

6. TV license (UK)

7. Leave unsecured debt until last, no matter what the creditors chasing you may say. This includes all credit and store cards and personal loans which are not secured on your property.

8. If you have mortgage arrears do speak to your lender immediately. In today’s climate they really will try and help with a solution but you must inform them at the first sign of a problem.

9. Maximize your income. Again it seems obvious but have you explored all possibilities of generating some extra cash (honestly of course).

10. If things look bleak I really do advise talking to a debt advice charity in your local area. Stay away from the commercial operators advertised everywhere. Many charge very high fees.

11. Look in your phone book or on-line but make sure they are a registered charity and check them out.

12. If you feel confident in handling your situation personally, there are some good guides available. Again choose wisely.

I sincerely hope everything turns out well for you. We will come through these dark days we won’t be drowning in debt forever but it may take longer than many believe.

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Identity Theft: Six Steps Every Victim MUST Follow…

Cleaning up the mess left by identity theft is time consuming, stressful, and expensive. Some people actually give up and just pay off the fraudulent charges of identity theft because it’s the only way that they can improve their credit rating. Here are the steps you need to follow if you believe that you are a victim of identity theft:

Step 1: Contact the Three Major Credit Bureaus

Contact the fraud departments at each bureau. Explain that you are a victim of identity theft and that you would like to be contacted personally before any credit is issued in your name.

Equifax (800) 525-6285

Experian (888) 397-3742

TransUnion (800) 680-7289

Insist that they place the account under investigation for identity theft if it is to remain on your credit report.

Step 2: Order Your Credit Report.

Order your credit reports to check for accounts that may have been fraudulently opened in your name. As the victim of identity theft, you are entitled to a free copy of your report from each credit bureau.

Step 3: File a Police Report

Companies who have issued credit in your name will not take you seriously without a police report, which will protect your legal rights.

Step 4: Contact Your Local Post Office

If you were a victim of identity theft due to someone stealing your mail to obtain your information, officially report this fact to your local postmaster.

Step 5: Contact the Social Security Administration and Department of Motor Vehicles

If the thief is using your social security or driver’s license number to commit identity theft, you might need to obtain new numbers from these agencies.

Step 6: Contact All The Companies Who Granted Credit to the Identity Thief

Communicating by telephone does not protect your rights. Send certified letters and insist that they communicate with you in writing.

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If you’re looking to find more information on identity theft or need help restoring your credit, download the best credit repair software anywhere. Credit Repair Magic is the fastest and most cost-effective credit repair solution we’ve ever found. Don’t waste your time with useless e-books or ridiculously overpriced monthly services.

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Consolidating Credit Card Debt Are you having a problem meeting the payments on your credit cards? If so you may be interested in knowing more about consolidating credit card debt. Consolidating debt is not to be taken lightly as borrowing more if you are struggling with payments now is not always the best solution. However When you consolidate, you can take your existing debts and consolidate them into one loan generally over a longer period. This should result in a lower monthly payment overall., with only one payment to worry about instead of several smaller ones. Tidying up your finances can restore some stability and piece of mind for you. You will find that getting things organized in this manner will give you more insight into your actual financial situation and make it easier to deal with. Before considering a consolidation loan do take proper advice, it is a risky strategy to borrow more to pay off existing debt but if lowering your existing payments does the trick then it is a usefull solution. Depending on the amount you owe and your current financial standing you may qualify for an interest free credit card. This would enable you to transfer your existing credit card balances to the new card on an interest free basis. Well worth considering, especiially if you think you could pay off the balance in say 12 – 15 months. For larger amounts spread over a longer period a loan is the answer. You can apply for an unsecured loan (best option if possible) or if you have sufficient equity in a property, then a secured loan may be available. In this case speak with your existing lender first as they may be able to offer you better terms than elsewhere. There are many online resources for researching a new loan but do your sums carefully and if your not sure get some independent financial advice. Before making an application it is well worth getting a copy of your credit file. This will also tell you your credit score. Also if there are any errors on your file (which are not uncommon and can result in applications being declined) you can ask for these to be removed, prior to making your loan application. When it comes to making the application do be truthful about your circumstances. It is almost impossible to lie and not be found out as your details are all on a database somewhere and finance companies and banks invariably use the “Credit Reference Agencies” who hold all your details. Finally, do be sure you can afford the repayments. There is little point in digging a bigger hole for yourself if you can’t and other options may be necessary. Possibly Debt Counseling. For further help visit my main debt sites:  Debt Free – Debt Help Simply happy & Debt Free Video Get Out Of Debt Blog