December 10, 2019

How To Use Debt Management To Get Out Of Debt

There is nothing worse than getting behind on one’s bills and being constantly reminded that there is money owed. The constant phone calls, bills marked ‘overdue’, threats to turn off the utilities all add up to extreme stress and worry about how to get out from under the load. The only way to do this is by debt managament.
Debt Management

Some people simply were not taught, as they were growing up, how to handle money. As long as it was there, it was to be spent with no thought to the future. As a result, money, while giving pleasure and instant gratification, has become a worry.
Anyone with this kind of a problem needs counseling. There are, fortunately, various companies that offer a debt management service. They look at the debts and the income and lay out a plan to get them under control.

Sometimes this involves something such as debt consolidation, debt counseling, debt settlement, or even bankruptcy, depending on the situation. Bankruptcy should be the very last thing considered. It does not erase obligations such as student loans, child support, car payments and other things of this nature and ruins a person’s credit rating.

The number one priority, when getting debts under control, is to keep a roof over one’s head. That means paying the rent or mortgage, the utilities and anything else that is necessary. That does not mean having a housekeeper or gardener, who is taking money that can go to necessities.

After the house is taken care of, one looks at the car. A car is a machine, with four wheels, to get one to work or on daily trips. It does not have to be top of the line or the latest model out. If a person has high payments on such a vehicle, getting rid of it and getting a sturdy, reliable model will save several hundred dollars a month. Saving a little money each month, until there is enough to pay ‘cash’ for the car of one’s dreams is the only way to go. It saves tons of interest as well as relieving the monthly burden of high payments.

To manage one’s bills takes discipline and hard work. One of the most difficult things a person should do is cut up their credit cards, if they have any. For some, this is like cutting off an arm, but having a piece of plastic in the pocket that will allow immediate gratification, for a purchase, is a temptation some people cannot resist. That card is not the ‘open sesame’ to an unlimited amount of cash, it is a chain around the neck and each purchase adds another link.

Debt management is not easy. It takes discipline and will power as well as, many times, the guidance of someone who is experienced in the field. Finding a company with personnel who have knowledge in the area, and can provide guidance, is a route that has relieved many people of the stress of being overwhelmed with debt. If searching for such a company one should carefully shop around and make sure the company selected is reliable and trustworthy before entering any kind of program or other arrangement.

Learn more, click here: http://www1.va.gov/debtman/

Introduction To Debt Consolidation

Many times things happen in a person’s life that is devastating and changes the life style one is used to. One of these things might be a member of the family losing their job, someone becoming ill or one taking a big cut in pay. When this happens, it results in a person owing more bills than their income can take care of each month. At such a time debt consolidation should be considered.
Debt Consolidation

There are a number of companies engaged in the business of debt consolidation. This means putting all the debts together so that there is a single payment each month. If one’s credit rating is poor this would probably mean a higher interest rate than someone with a good score.

When approaching such a company there is, as a rule, counseling. If it is a local company or an Internet company, who works with debt consolidation, they will have to have certain information. Before making any contact, one should be prepared with a list of all the bills regardless as to how small or large. Income and other assets should also be listed. To reduce some of the debts, prior to contacting a company or lender, one might consider selling such things as a boat or motorcycle to raise quick cash and eliminate some of the bills.

When receiving all the necessary information, the person contacted will be able to analyze the situation, see what companies are involved, how much is owed and if there is sufficient income to work out a plan. If contacting a reliable company, one will find personnel who are experienced in all areas of debt consolidation who can relate which scenario will work best.

Debt consolidation is in the form of a loan. This is a direct loan from a lender, that is used to pay all of the bills at one time, closing the accounts. Of course, to get this loan, one must have some collateral, such as a home, or an income that will cover the monthly payments. Loans without a collateral have, as a rule, a higher interest rate.

This kind of a loan will allow a person to build up a good credit rating, if the payments are made promptly and in full each due date. There are some reputable debt consolidation companies that will show one how to pursue this avenue of clearing the books of money owed. It will also eliminate the problem of late fees and interest charges that just keep getting bigger each month.

One of the huge mistakes that a number of people make is, that as soon as the bills are cleared, they go out and start accumulating debt problems all over again. Remembering the worry of owing money, the threatening phone calls and the bills stamped ‘overdue’, one needs to dedicate themselves to breaking this habit. Spending money only for essentials and putting a little aside each month, for emergencies, will bring great satisfaction and peace of mind. It will also, eventually, result in a good credit rating.

There are very few people, if any, that can say they have never been in a financial bind. Wondering how to stretch money, beyond the breaking point, is stressful and often causes family problems. Having someone work to help with debt consolidation will allow a person to get on the road to financial recovery in a very short time as well as bring peace of mind.

Additional information at: http://www.loanconsolidation.ed.gov/