The holiday bills are piling up and you’re not quite sure where you’ll get the money to pay them. Maybe this has caused you a few sleepless nights, along with an overall feeling of unrest. It’s not unusual to experience these problems due to overwhelming debt, interest and late fees owed to your creditors. If this is indeed where you find yourself it’s time to seek the proper solution to break free from the unsettling feelings you’re experiencing due to your lack of financial health and well-being.
If you’ve combed through various websites on the Internet and left no stone unturned in searching other sources of information to become free from debt, you may have uncovered some information about debt settlement as a potential answer to your current financial woes. While this type of debt relief is soaring in popularity, it also has many critics, and the information that you may have found available regarding debt settlement can be outright distorted, and oftentimes inaccurate.
One of the main areas of concern that people seriously ponder when weighing their options to become free from debt is the affect that debt settlement may have on their credit score. Yes, debt settlement may potentially have a negative impact on your credit score; typically, however, this would more likely be the case if your credit cards are current and have had no previous history of delinquency. On the other hand, if your accounts are classified as delinquent, it’s more likely that your credit score will realize a significant increase after your accounts are reflecting zero balances.
Now, let’s assume your accounts are all current, but you’re still faced with some tough choices; this may leave you contemplating debt settlement due to the fact that making ends meet at the end of each month is a battle which you’re no longer winning. Or, worse yet, you find yourself writing checks or taking cash advances from one credit card just to pay the minimum monthly payment on another. If either of these assumptions is true, you may want to reconsider just how much time, attention and significance you should really being contributing to your credit score.
Having a respectable credit score might bring a sense of calm to many people, but if you’re buried in debt that serenity is easily erased by continuous restless nights just trying to make sense of your finances in an attempt to stay afloat each month. While it is a “pre-requisite” of creditors to reach settlement agreements with consumers on only those accounts which are delinquent, please keep in mind that this delinquency is for a limited time, and the majority of the time so is the downgraded credit score with which you might end up.
In summary, if you believe that you’re able to tolerate exchanging what may be considered a decent credit score for financial relief and a temporarily inferior credit score, debt settlement may be an option you want to consider. If you’d like to learn more about the process of debt settlement, click here
Marie Megge is a consultant in the credit services industry. Over the past several years she has assisted many individuals in resolving their debt-related matters. For more information regarding credit and debt visit http://www.donaldsonwilliams.com
January 8th, 2008
There will be many people heading into 2008 looking for debt advice to help fix their serious financial problems. It’s important to remember that before you even start shopping around for debt solutions, you need to unsure you employ the right mindset.
First things first, stop spending. You can’t possibly hope to fix your problems if you’re still recklessly throwing away money. Don’t just say you’re going to fix your finances, do it. The best possible debt advice anyone can offer you is to get serious about your finances. Without the right attitude, you’ve got no chance of getting out of the red.
The first decisive action you should take is to sit down with a pen and paper or in front of a computer and work out your outgoings against what you’re earning. Analyse your consumer debts like credit cards and loans. These additional expenses are what can really suffocate you when you have to make monthly repayments on top of your mortgage and other household bills.
By carrying out this preliminary work you’ll have a clear picture not only of how serious your debt is, but what chance you have of paying all your bills without needing the help of third parties or professional advice.
Let’s start by analysing what to do with small amounts of debt. A small amount of debt like 2000 on credit and store cards might not seem small to those who are struggling to make the repayments, but in the grand scheme it can be controlled relatively easily.
In terms of debt help advice, a consolidation loan can be of great benefit if you have arrears from more than one lender, i.e. multiple credit cards. A debt consolidation loan can be obtained through your bank or a number of other lenders. The benefit of this is that you can roll up all of your debts into one affordable repayment and save massive amounts of money in interest. Make sure you sit down and do all the relevant working out before diving into an agreement though.
Another option with credit cards, is to do a balance transfer to another credit card with a 0% finance offer. This means that when you make a payment on your debt, it chops away what you owe without having to pay any extra costs. There are lots of 0% finance introductory offers so shop around to find the best deal, and make sure to look out for hidden fees.
If you have more serious debts of around fifteen thousand pounds or more that you can’t possibly afford to pay back, then you might need to seek professional debt help advice sooner rather than later. Once more though, make sure you have all the information you can possibly get your hands on, so you end up with an agreement that suits you and not the company providing the agreement.
Lots of debt advice companies will try and persuade you into getting an IVA or Individual Voluntary Arrangement because it can net them a massive sum of money in commission for setting up the agreement. An IVA slices off a massive portion of your debt, leaving you to make repayments on the remaining amount. This can be an incredibly attractive proposition to many people, but can put red tape on your credit rating for a long time to come. However, an IVA is a realistic alternative to bankruptcy and might just save you having to give up your home, so is certainly worth considering.
Speaking of bankruptcy, it can seem a horrible proposition but if your finances are in a dire situation it can often be the only way out. On the plus side, bankruptcy can lift a terrific burden from your shoulders and the procedure is certainly not as severe as it once was.
If you have serious debt problems, then get professional advice as soon as you possibly can. Taking decisive action to fix your finances and approaching everything with a pro-active attitude will give you the best possible chance of finishing 2008 with much healthier finances.
Thomas Baugh offers more skilled debt advice at the Debt Help Site.
January 8th, 2008
