Showing posts with label debt relief. Show all posts
Showing posts with label debt relief. Show all posts

How to Get Out Of Debt This St. Patrick's Day


St. Patrick's Day is right around the corner. The holiday is a great opportunity for people to get together with friends and family and knock back a few beers. Traditionally, people don green attire on this holiday. However, if you want to enjoy all of the St. Patrick's Day festivities, there is another green thing you need to worry about. That green thing is money. Many people suffer from mountains of credit card debt. Debt can be suffocating for anyone who finds themselves in it. For St. Patrick's Day this year, it is time to take steps to get out of debt.

Assess the Situation
The first step to getting out of debt is to figure how serious the situation is. To do this, pull up all of your credit card statements and figure out exactly how much you owe. You also want to think about how you wound up in debt to begin with. A good way to do this is to track your spending for a week. Write down every cent you spend. This will help you understand where all of your money went. The first step to getting out of debt is understanding how you got there. Otherwise, you run the risk of getting in to debt all over again.

Make a Budget
If you want to figure out a plan to eliminate debt, you need to figure out how much you can afford to pay. In order to do this, you should make a budget. A budget is a template that helps you live a financially responsible life. You can make your budget in any number of ways, but a monthly budget is the most common format. When making your budget, you want to list several categories. First, list all of your income. Then, list your fixed expenses. This includes loan payments, rent, and utilities. The next category will be your variable expenses. This includes groceries, gas, clothing, and entertainment. This is the area where you have some flexibility. Assign a reasonable amount that you feel you can stick with. After your expenses, list another category. This category should include money you can put toward debt and money you can save. If you have left over money in your variable expense categories, that is more that you can put toward debt. The key is making a budget that you are comfortable with.

Learn to Save Money
If you pay a little more attention to detail, you can save a lot of money in every category. With groceries, look for coupons and sales before you go out. If you have a smartphone, take advantage of the many apps that are geared toward saving money at the store. To save on gas, consider combining trips. If you plan your activities ahead of time, you might be able to knock out more errands in one trip. For your gas bill, turn your thermostat down a couple of degrees. You will still be comfortable while saving a sizeable amount of money on your bill. As for entertainment, look for special event deals. It may be difficult to find a money saving pattern that works for you, but you will see results once you do.

Consider Debt Relief
If your credit card debt is sizeable, consider debt relief programs. First, contact your credit card company. They may be willing to work with you on a payment arrangement that will save you money and not destroy your credit. If you have debt on several cards, consider a debt relief service. These services can help you eliminate credit card debt in a less stressful way. Essentially, they will eliminate fees and interest so that you can save in those areas. As long as the debt relief program is reputable, you should be able to eliminate your debt as time goes on.

Author’s Bio: Mark Paul is a regular contributor for Debt Consolidation Advice and guest writes for several other finance related blogs. He covers the debt relief industry and provides helpful ways for getting out of debt. He also offers various tips for saving money and being financially responsible.

Do It Yourself Debt Settlement

You might decide to settle your own debts instead of hiring a debt settlement company because you want to save money on settlement fees. Or, perhaps you’ve heard about scams rampant in the debt settlement industry and want to avoid being taken advantage of. Some people decide to settle their own debts so they have control of the process from start to finish. There are lots of good reasons to settle your own debts.

Getting Started
When you decide you’re going to settle your own debts, you stop making monthly payments on your debt. Instead, each month you’ll deposit your regular monthly debt payments into a separate checking account whose sole purpose it to hold your settlement funds until you’re ready to pay a settlement. You might open this checking account at an entirely different bank if the credit cards or loans you want to settle are at the bank of your primary checking account.

Creditors routinely agree to settlements between 40% and 70% on balances that are 90 days or more past due. The account must be past due for the creditor to deem it risky enough to take a settlement on. If the creditor thinks they can get the full balance from you, they won’t agree to a settlement.

When to Make a Settlement Offer
Once you’ve saved up enough money to pay a settlement (about 50% of the current balance due) and you have an account that’s more than 90 days past due, you can make a settlement offer. If this is the first time you’ve mentioned settlement to the creditor, you might briefly mention it as a possibility. For example, you might say, “I’m having trouble getting caught up on my payments. In fact, I’m not sure if I’ll ever be able to pay this account in full. If I could come up with the money, would you be interested in taking a settlement on this account.”

When you bring up settlement with the creditor, be prepared to offer a dollar amount to settle the account. So, if you owe $10,000 and you want to settle for 50%, offer $5,000. If the creditor refuses or asks you to pay an amount you’re not prepared to pay, politely end the call and repeat the process in another month or so.

Settling Your Account
When a creditor agrees to a settlement offer, there’s one more step that has to happen before you make payment. You need to get a settlement agreement on company letterhead. The settlement agreement should include the date of the offer, amount of the settlement, date the settlement must be received, and a note saying the settlement will satisfy the account in full. You’ll get the settlement letter faster if you have access to a fax machine. That way you can sign it, fax it back, and make the settlement payment.

Many creditors will take the settlement payment over the phone if you give your checking account and routing number. The creditor may also accept a cashier’s check or money order for payment. Make sure you confirm the payment method.

Frank Collins is a seasoned writer with strong background in both personal and business finance. You can read more of his articles about debt relief options, credit counseling and related services at the debt settlemmient blog.