DebtEliminationTips

There are many road blocks you can encounter when attempting to recover from years of debt. But believe it or not you don’t have to be rich to do it at all, any average person that is willing to take the time can solve this issue. If you have tried and are not making progress , get some help from a company that specializes in what you are trying to accomplish.

NOTE: A word of warning not all services are equal and some are out right just scams… Make sure you are getting some kind of guarantee so that you are assured you are getting what you are paying for currently .

I looked at many programs before I decided to get into this field and I was not impressed with what is currently out there, here is a brief example why:

Debt Consolidation - Costs you money and you are refinancing the same amount of money over again , may be cheaper monthly but long term not wise

Debt Management - Usually a monthly fee ( I will demonstrate a better use of that fee) and in most cases your accounts get closed.

Debt Negotiation - Lawyer assisted debt negotiation is becoming real popular nut again it is costly and accounts again will be closed

Bankruptcy - Not much to say here, if you are actually at the point of bankruptcy than take advantage of it, learn from your mistakes and move on.

So now to the real meat and potatoes of why you don’t have to be rich to be debt free, it is all about how you are applying it currently . Most individuals are worrying about there houses first , which causes them to loose focus on the big picture. If you are struggling to make ends meet how is it that you have decided to attack the biggest amount you owe with little money to work with currently . It is not possible to pay off a mortgage throwing small pebbles at it, but if you work systematically you will be able to throw boulders at it.

Before you set to tackle your debts you first must understand several things, how much do you owe to each account and how much money is coming in and where EXACTLY is it being allocated . This brings up the budget word that so many people dread but if you will take the time to complete and accurate budget you will be able to make sound decisions.

Not everyone has the same issues regarding debt, some may have several credit cards and a house, other may have only one card but 2 cars and a school loan, but the issue still remains the same …How do you tackle it efficiently so that you can now start planning for paying off the house , I have news for you all IT DOES NOT TAKE 30 YEARS TO PAY OFF A HOUSE … nor should it take 5 years to pay off a credit card. These systems were all designed this way so they can reap massive profits off of each one of us and it simply does not have to be this way.

Once you have all your debts aligned and identified start attacking ONE at a time only (This does not mean do not pay the others) , the recommendation is to attack the card with the lowest balance. Apply every extra penny you can to this card and it will start to come down faster, you will be surprised what you will see when you focus. This debt will soon be gone allowing you to again focus on the next lower debt but with more money and power as you will have all the money you have been paying to add to it.

NOTE: There are many techniques I show my customers that will increase the efficiency of EVERY payment allowing to melt yor debt faster then you have ever done before, but you have to contact me for this service. You will be amazed on how much money I can save and how little my service costs.

Lets say you have a $500 credit card that you are trying to eliminate and they are currently asking for $25 dollars and you interest charge is $12.50 . Which in reality means you are making a $12.50 dollar paying and giving the rest away and this is not efficient as it will roughly take you 3 years at that rate to pay that debt off. Here is where I say paying for a monthly debt management service is a waste , lets say you can come up with a extra ten dollars ( in actuality you will likely have more but this demonstrates the problem) this brings your actual principal payment to $22.50 and it will now only take 1.8 years to pay it off. These numbers may not seem great but consider the fact that this is a measly little 500 dollar balance so you should be able to see the reason attacking larger debts with peanuts is useless. But if you continue to build on this process up the chain you will soon be attacking the bigger debts ore efficiently and these numbers will start coming down rapidly.

So sit down and start calculating and attack your debt systematically , you can do this or contact some for some help. This road still has its bumps but will make you very aware of your money and you will come out stronger and better.

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Getting out of debt is a very important goal that every should not hold lightly, but preserving and strengthening your credit is just as important . There are many reported fixes for credit but I would be very wary of those solutions, the best possible scenario for you is to have a long term track record. Some of the processes of credit fixes is to get things removed from your records and al that really does for you is make it look like you have no credit history.

The absolute best way to fix your credit is to show rock solid payment history with all your accounts, both credit and non credit in some cases. Things like utility bills and cell phones bills can also help you build and maintain good credit . Following a well developed debt elimination plan will keep you on track and focused on the goal of eliminating your debt fast and keeping and increasing your credit score. this will become important the next time you want to buy a car, getting better rates and making the whole process of getting financing in general easier.

One of the triggers that is looked at is your debt to income ratio, in most cases individuals are running a very non effective plan, meaning they are giving away more of their payment to interest than they need to each month. This shows up a slowly reducing principal balance , this means your debt to income also reduces slowly . The faster you can attack this problem the faster you will bring your credit score up , the debt to income is gauged on all your accounts not just one.

Another very important trigger is the ratio of having a balance higher than 40% of your maximum allowed per card . For instance if you have a card with a $2500 credit limit then the maximum revolving balance on that card should not exceed $1000 . Once the balance creeps above that amount it will start to effect your credit and the more you reduce it below that will effect your credit positively. Be careful though you cannot attach all your debts at once, you will stretch your resources too thin and have a negative impact in reference to your goals.

A properly planned debt elimination program will be concentrating mainly on the elimination of your debt at the fastest possible time frame , it should also allow for some flexibility to focus on specific areas. Debt elimination by design will help you make the payments you are making more efficient thus achieving any and all of the above mentioned goals happen faster . In a very short time frame all of the struggles your are currently having should become easier as you are on the road to eliminating your debt and reducing your financial stress.

This will pay off greatly for you if you by chance need a car, a small loan or even want to buy a house. Having been through this recovery phase should help you better hand the debt you will likely experience in the future . The lesson you learned and the knowledge you will gain by understanding how to increase the efficiency of your money will help you eliminate any debt in the fastest possible time frame.

Hope this information has been of some use to you

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Dealing with debt can be overwhelming at times , so the questions is should you do it yourself or contact a Financial Planner specializing in debt. This would really depend on several factors:

• Are you making progress (Reducing your principal )
• Can you locate a Financial Planner with reasonable rates

Believe it or not all services are made equal from the stand point of the services provided, some decision will be based on cost or possibly the level of services. The cheapest service may not be the best service, and likewise the most expensive service may not be the best.

It will be best to weigh them against each other using this criteria :

• What guarantees are you being offered ?
• What are your total costs ( Monthly re-occuring costs are not recommended)
• What is their specialty ( You would want a financial analyst who specializes in debt)

 Why would you pick a Financial Planner over a do it yourself method:

A good financial planner will put you on a quick path to debt reduction, proper execution while trying to eliminate debt is essential. Where as using the do it yourself method you may think you are on the right path not knowing if there is a better way. There are many ways for you to accelerate the payoff of your debts and a Financial Planner should help you discover which method works best for you.

Should you actually pay extra on all your cards ( old school thought and is not efficient) , should you pay the highest interest card ( you will be chasing your credit cards forever) , or do you pay the credit card with the lowest balance. These are the decisions you need to get right in order for you to be able to efficiently eliminate debt quickly. Doing things using any of the above methods will produce you some results but will they be efficient , or can you make changes that will increase the efficiency of every dollar you pay towards debt.

AS an example most of my clients that I take on are paying all of their bills on time but they are not making any progress in reducing their principal balances, WHY you ask… Because the way they are paying is VERY inefficient . The amount of actual principal balance each month is about 50% of their payment, so if you are OK with giving 50% of your money each payment then don’t make any changes. I challenge each and every one of you to fill out my financial form on my site and see for your selves how you are doing, making 2 very small changes can drastically change how much principal you pay each month.

So in conclusion to this subject if you are not making significant progress in your war on debt then you should consider a change and get some help, it can save you so much money that you WILL be giving away if you don’t make a change now. Evaluate each debt solution based on what you are getting not what you are giving them, I do not recommend any services that require a monthly fee, if you can afford a monthly fee you would be better served applying that directly to your debt.

Keep looking as I write additional posts about debt elimination and many other topics related to debt, freeing yourself from debt is the only way to secure a healthy retirement.

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Debt Management is a huge topic these days and is needed by so many people today. With all the current confusion in the market what choices have you made and was it the right choice for the right reason.

There are many companies popping up out of the woodwork , some are trying to help and some are just out for your money. So it very important that you understand what the company you select is actually doing for YOUR problem and that it is not going to hurt your current debt situations. You are after all more then in a vulnerable position and companies may take advantage of you.

Here are a few guidelines and questions you should be asking your debt management company:

1. Is there a monthly fee for your services and what will be included in that fee, remember that any extra money you can have towards your debt will be valuable to you so don’t give it away easily.

2. How does the solution they provide effect your credit, make sure this is clarified as they will probably tell you that it will not be effected until the credit card company closes your account. This is not to your benefit and in a lot of cases will happen if you make the wrong choices.

3. What exactly will they be providing you for your money, dont excpet a generic answer or you may be spending your money and not get the proper return.

Things you should expect from a good debt management solution:

1. The debt management solution should be ALL about your needs and how they are going to help YOU with your problems. So if something they are telling you doesnt sound right , make them expalin it again and provide you a proper justification for why you are doing something.

2. A debt management company should have a solution that will adapt to changes in your financial life, and be constantly working towards improving your situation. Keep in mind that you did not in debt over night and you will not get out of debt , but a good solution will provide a path that will grreatly reduce the time frame needed to get out of debt.

A good debt management firm will help you with everything from creating a budget to analysing your current expenses and offer some valuable suggestions possible reductions. Corecting a debt issue is much more then just understanding how much you owe, but also what else can be reduced that will allow you to reduce your debt faster.

Even if you have already started a solution dont hesitate to search out additional resources as not all programs are created equal. You will find a lot of good free resources that you can utilize , but do not hesitiate for one second to consider a pay solution if they can prove to you that they can handle your debt issues. Make sure they either have a money back gaurantee or provide service before payment.

Debt management is something I take seriously and so should everyone who reads this post, starting a corrective action today will save you thousands of dollars and prevent losses in your lives. I wish everyone good luck and if you do not contact me to handle your debt issues please contact someone , it may just very well be the best move you have ever made. My company stresses that it is concerned about providing you a solid debt management solution using proven techniques that will help anyone willing to work hard debt freedom.

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