Debt Consolidation Advice: Recover from Credit Card, Personal Loan and Other Financial Arrears

Debt Consolidation Advice: Recover from Credit Card, Personal Loan and Other Financial Arrears

Everyone is looking to save money on various financial payments, but when debt arrives many people immediately turn for help in order to get out of monetary trouble. Unpaid bills, credit card debt, and personal loan debt can mount over time if not monitored properly and carefully.

However, debt consolidation can be the answer to these financial issues. Learn how to recover from debt and begin a fresh financial outlook.

Debt Consolidation

When an individual finds the idea of paying off multiple debts to be overwhelming, debt consolidation is a capable option. Many times a person can be swarmed by credit card debt, unpaid/overdue bills, and personal loan debt. An individual may reach the conclusion that paying off all the debt…is simply not possible.

This financial plan allows an individual to only make a single monthly payment. The debt that has accumulated from several different places and factors is now joined into one payment. This simple restructuring allows the individual to get a better grasp and handle on his or her fiscal situation.

Credit Card, Personal Loan, and other Paperwork

The next step in the process is to meet with a debt consolidation expert. However, before a person takes that step, it’s vital to gather all the necessary paperwork. Get the contact information of all the creditors, and gather each and every necessary document to present to the debt consolidation expert. This is yet another reason to save all financial paperwork.


When this debt option is being considered, it is paramount that an individual have all the proper records and documents of his or her financial debt history. In order to be helped, an individual must first stay on top of his or her financial standing.

Debt Consolidation Company and Debt Strategy

When an individual has found the proper debt consolidation company, he or she can now be advised how to handle the situation. The company will make note of the total debt in all areas, including credit card, personal loan or any other financial hardship. The company will also make note of how much an individual can actually afford to pay per month.

The payment plan will then be constructed around the total debt and the total income. Everyone is unique, so a specific plan will have to be developed and understood. The individual’s debt consolidation advisor will speak with every creditor listed, and will work in conjunction with each one to establish an agreed upon financial plan.

Advice on Reducing Debt: Reduce Debt with Strategic Planning and Money Saving

Advice on Reducing Debt: Reduce Debt with Strategic Planning and Money Saving

Reducing large debts can seem a daunting proposition, but with a little forward planning and prioritising it is possible to save considerable amounts. There are many ways to effectively reduce debt without resorting to debt consolidation companies.

When tackling the problem of reducing debt it is vital to know exactly how much is owed to which creditors and the different rates of interest. The most efficient way to reduce debt is to pay off high interest debts first.

How to Reduce Credit Card Debt

Many people owe money on more than one credit card. If this is the case it is important to prioritise which card the largest amount of money is sent to each month. By paying off the highest interest credit cards first the process of clearing debt is accelerated while interest charges are minimised.

It is vital to communicate with any creditors, including credit card companies. Most companies are happy to discuss alternative ways of reducing debt and may offer alternative repayment plans to suit particular financial situations.

Reducing Car Finance Debt

Shop around for competitive loan rates and consider paying off the remaining balance of a car loan at a lower rate of interest. When buying a car dealers may give the impression that finance has to be taken out with them, but this is not always the case. Do not be afraid to contact alternative finance companies and to negotiate with the dealer for a better rate of interest.

Reducing Mortgage Debt

For most people a mortgage is the largest debt they will ever have. Arranging a mortgage where additional payments can be made (assuming extra funds are available) allows homeowners the opportunity to pay off the debt sooner. Renting out an unused room in the house to a lodger can bring in considerable extra income, which can then be put towards further reducing debts.

Ways to Reduce Household Bills

Reducing monthly outgoings is a great way of freeing up more money to tackle outstanding debts. Simple measures can go a long way to cutting bills. Normal light bulbs can be replaced with more efficient energy saving examples. Ensuring a home is properly insulated means that heating will be required less often and at a lower setting.

Debt Helplines and Charities

There are many organisations and charities which specialise in debt reduction advice. They often have a debt help line which anyone can phone for free advice. An example of this is the National Debt Helpline in the UK. An internet search for debt helpline numbers will return a large selection of results. Likewise, debt help charities are also well represented on the web.

The main aim when reducing debt should be to pay what is owed in the shortest time, while minimising interest charges. Debt consolidation is an attractive proposition for many people, but is best used as a last resort. Although monthly payments will be greatly reduced by a debt consolidation company and they will offer an attractive interest rate the total amount repayable will usually be considerably more, stretched over a much longer period of time. Before embarking on any debt reduction plan it is advisable to consult a qualified financial advisor.

Three Bankruptcy Alternatives to Consider

Three Bankruptcy Alternatives to Consider

More often than not, individuals in dire financial distress can avoid bankruptcy simply by considering any other credit solution. Such alternatives include Individual Voluntary Arrangements (IVAs), debt management and negotiation, and debt consolidation.

Individual Voluntary Arrangement

An Individual Voluntary Arrangement (IVA) is a credit solution that serves as a popular bankruptcy alternative. It involves a formal agreement between debtors and their creditors made through an insolvency practitioner. Arrangements are typically flexible and are based on the debtor’s capacity to pay. Generally, through such arrangements, debtors will be left to pay only a percentage of what they owe and interest and debt charges are frozen.

While its nature is quite similar to bankruptcy, an Individual Voluntary Arrangement gives debtors more control over how their debts will be settled as well as how their assets will be allocated. In many cases, individuals who pursue IVAs will be able to keep specific assets, including their homes. Furthermore, IVAs cost less because there are fewer and lower fees involved.

 

Debt Management and Negotiation

The development of debt management plans also serves to be an excellent credit solution to uncontrollable debt. This is typically a good option for those who have trouble with unsecured debts including those accumulated through personal loans and credit cards.

Through this alternative, debtors typically seek the help of finance experts such as consumer credit counselors in order to come up with a debt repayment plan that suits their specific situation. Upon developing a suitable plan, consumer credit counselors or debt management companies negotiate with creditors on behalf of their clients. If successful, debtors are then left with debt management plans that are more manageable.

Debt Consolidation

Debt consolidation involves taking out a loan to pay off another loan or many other loans. While this can be done through banks, it is often done through debt consolidation companies. Through this option, debtors can cover unsecured loans by taking another unsecured loan but it is often more beneficial to cover unsecured loans through secured loans because of the difference in interest rates.

Typically, debt consolidation is done to gain lower interest rates on the total amount of debt. Sometimes, debtors can also gain fixed interest rates through this option. An additional benefit to this bankruptcy alternative is that debtors need only to make one monthly payment to one company rather than several monthly payments to several creditors.

There are a great many options available to debtors in financial distress. Often, such people will find bankruptcy alternatives to be very beneficial. If they have the capacity to pay, they should seek the advice of a consumer credit counselor or any other professional in the field of finance. Such experts will be able to help them find the best credit solution for their specific debt situation.

New Home Price Negotiating Tips: How to Negotiate Home Prices and Terms with Home Sellers

The following is a guest post from Houston, Texas real estate developer and entrepreneur Tracy Suttles.

Overall Home Price

The most obvious new home negotiation point is the overall home price. When determining the price to be offered for the home, it is best to use the asking price of the home as a last resort. This number is typically just what the owners want to receive for the house and may or may not reflect its actual value. Working with a Realtor, comparables of recently sold homes in the area can be used to determine an appropriate home price. Use an average of homes that are similar in size, design and maintenance level.

If the real estate market in the area is a seller’s market, be prepared to pay top dollar for the home. The buyer may even have to compete with other offers when the offer is made which gives the seller the upper hand in the negotiation process. If it is a buyer’s market, the buyer may be able to make a low-ball offer that is below the perceived fair market value of the home.

Home Sale Contract Contingencies

In addition to overall price, the buyer can also negotiate based on other terms or contingencies. For instance, the sales contract may be contingent on an appraisal of at least the offer, an approved mortgage loan at a certain interest rate and a satisfactory inspection of the home.

New Home Concessions and Terms in Sales Contract

In a buyer’s market, the buyer can likely negotiate additional concessions into the contract such as a carpet or paint allowance or additional sod and landscaping. A buyer may also negotiate a portion or all of the closing costs into the price of the home. For instance, the buyer may make an offer of $200,000 for a home that also includes the seller paying for $5,000 in closing costs. This is in essence offering the seller $195,000 for the home.

Depending on the buyer’s situation, it may be necessary to negotiate certain terms into the sales contract. These terms could include the sale of the buyer’s home before this sale is complete. Or it may include a shortened or extended time before the home is closed.

A sales contract should not be signed unless all terms have been reviewed by both the buyer and the seller. Once the contract is signed, it will be difficult to walk away from the contract without giving up the retainer that was paid by the buyer upon acceptance of the offer. Negotiate the sales price and terms before signing and know that if it is not in the contract, the buyer nor the seller can be held to it.

 

Book Review – The Credit Crunch Cookbook: Delicious Recipes and Clever Ideas for Cooking on a Budget

Book Review – The Credit Crunch Cookbook: Delicious Recipes and Clever Ideas for Cooking on a Budget

There is more to spending less on food than cutting back on takeaway and giving up luxuries like decadent desserts and expensive ingredients. The Credit Crunch Cookbook (Hamlyn) offers a collection of recipes and tips to help singles, couples and families save money in the kitchen by wasting less, being more organised and shopping more efficiently.

Cooking on a Budget

Many householders know that they need to spend less on groceries and meals, but it can be difficult to know where to start to cut back on expensive shopping and cooking habits.

Filled with practical, economical recipes and a large collection of tips for reducing waste, being more organised in the kitchen and saving money when shopping for groceries, The Credit Crunch Cookbook is ideal for those who want to make changes to their spending habits, but don’t know how.

Recipes are divided into three sections covering family meals, entertaining and make-at-home restaurant meals:

  • Budget Basics (light meals, main meals, sweet things),
  • Impress for Less (starters, sides, mains, desserts)
  • Dine In (Italian, Mexican, Indian, Thai, Chinese)

Recipes are easy to prepare, featuring readily available ingredients and easy to follow step-by-step instructions. There are no photos of completed dishes. Recipes are generally suitable for both children and adults and include:

  • Beef and ginger salad
  • Spaghetti carbonara
  • Meatballs in spicy sauce
  • Pumpkin and root vegetable stew
  • Chicken and spinach potato pie
  • Steak and mushroom pie
  • Tomato and green been salad
  • Pears with chocolate crumble
  • Caramelized orange and pineapple

Spending Less on Groceries and Meals

There is more to reducing the grocery budget than swapping to cheaper alternatives for favourite ingredients. The Credit Crunch Cookbook includes a collection of practical and easy to follow tips to reduce food waste, increase organisation at meal times and making sure that meals are prepared efficiently.

Helpful kitchen tips include reducing food waste by using leftovers and planning meals in advance. Writing a menu plan and thinking about the amount of food required for each meal can significantly limit waste and thereby reduce grocery costs. Suggestions for using leftover yoghurt, eggs, potato, rice, pasta, bread and cheese for using leftover vegetables and other ingredients are included.

Other tips include reducing food costs by buying fruit and vegetables in season and storing food correctly in the pantry and freezer. There are hints on how to save money by saving energy and water when preparing meals and tips for shopping wisely.

The Credit Crunch Cookbook encourages readers to be organised as well as economical. With planning, the book advises that it is possible to serve a romantic dinner for two for the same cost as an everyday meal and to feed hungry children and picky eaters without blowing the weekly shopping budget on expensive snack foods.

Save Money by Getting Organised in the Kitchen

Ultimately, the best way to save money at home is to be organised and plan ahead in all areas, including buying groceries and preparing meals. The Credit Crunch Cookbook offers tips for preparing a meal plan to reduce unnecessary grocery purchases and includes a sample budget menu for a weekly meal plan, romantic dinner for two and a dinner party menu for no-fuss entertaining on a budget.

The Credit Crunch Cookbook contains more than 100 recipes and numerous tips for better household budgeting. It is a practical resource for all homes and is an ideal housewarming gift for a new homeowner.

Roth IRA for College Savings: A Great College Investment Vehicle

Roth IRA for College Savings: A Great College Investment Vehicle

If you qualify, earning less than $95,000 for a single filer or less than $150,000 if filing jointly, you likely know the Roth IRA is a great way to save money for retirement. You receive no tax deductions when you fund your Roth account, but your money earns interest tax-free until you retire. Then, if you have owned the account for at least five years and you have reached age 59-1/2, your earnings are non-taxable when you make withdrawals from your savings.

You may not realize that some key features of the Roth IRA and the particulars of college financial aid awards also make the Roth IRA an attractive way to save for your children’s higher education expenses.

You can withdraw Roth contributions at any time

Since you paid federal tax on your contributions at the time you earned them, you can leave your money in your Roth account, earning interest tax-free. Withdraw your contributions when junior enrolls at the university with no tax or penalty and let the earnings rest until you retire.

If you start when your child is still in diapers, you can accrue a tidy sum. The most a couple can invest in a Roth is $8,000 ($4,000 for each spouse). Over 18 years, that adds up to $144,000. Even saving half of that amount, which is a more likely sum for a family that meets the Roth IRA income limits, results in a hefty $72,000.

Roth earnings can be withdrawn without penalty if used for higher ed

Avoid the 10 percent penalty on early withdrawal of earnings from a Roth IRA by using the money for higher education expenses. Remember: withdrawal of contributions are always tax free, but early withdrawal of earnings are subject to federal taxes. Paying taxes on the earnings seems a fair trade off for all those years of tax-free accrual.

Roth IRA avoids the financial aid radar

The formula for determining a student’s and parents’ ability to pay for college usually doesn’t take retirement savings into account. This is where the Roth IRA out performs other college savings plans like the Coverdell Education Savings Account or state 529 options.

Financial aid concerns also reveal the flaw in using the Roth IRA for college savings–distributions from the IRA can count as unearned income and throw a monkey wrench in the following year’s financial aid assessment. The benefits and drawbacks could balance out in the end, however.

Lower income savers get IRS tax credit for Roth contributions

Joint filers with income less than $50,000 receive a tax credit for contributing to any retirement fund. The lower the income, the greater the credit. But even the smallest credit, 10 percent of your contribution that year, is a good return on your investment.

Save for college and retirement in the same account

The Roth contribution limits are likely to continue to increase in future years. Parking both retirement and college savings in a Roth IRA is a one-stop solution for these important financial goals.

Should You Lease or Buy Your Next Car?

Many people are faced with this question when the time comes to get a new car. By some estimates, leasing vehicles has increased 30% in the past 10 years. Leasing is becoming more popular and can be confusing. Both buying and leasing have their advantages and disadvantages and one should be aware of what those are before making a decision. Leasing a car is appealing to many because you get to drive a new car for lower monthly payments than if you bought (or made payments) on the same car. This is because you are only paying for the three or four years (or however long you lease for) worth of depreciation versus paying for the whole car. For this reason, many people choose to lease a more expensive car than they could afford to buy. Another lure of a lease is that in three or four years you are free to turn the car back in, lease another new car, and never get tired of the car you are driving. Leasing may also be advantageous in some instances due to the fact that the IRS allows for more generous write-offs for lease payments than for loan payments on more expensive cars. Also, you may be able to find a great deal on the interest rate for your lease if a dealer is trying to move certain vehicles. Maybe the money you save in that case each month could be used to pay off debt with a higher interest rate. However, the disadvantage of a lease is that at the end of your lease you have no ownership in the car you have been driving for several years. You can purchase the car at the end of your lease if you have the chunk of money needed to do so (not likely if you chose to lease in the first place). My husband and I leased a vehicle a few years back. When the lease was up we were struck with the fact that we had payed all that money for all those months and were just going to hand the vehicle back to the dealer. Instead, we took out a loan to purchase the vehicle, sold the vehicle for more than the amount of the loan, paid off the loan, and had some money “left over”. A lot of work. Another thing to be aware of is that there are penalties you will pay if you fail to meet the conditions of your lease. For example, many leases have mileage limitations on them and if you exceed those miles (usually somewhere around 15,000 miles/year), you will pay for the extra miles you drove. That could add up if you spend a lot of time on the road. Excessive wear and tear on your leased car can also end up costing you extra money.

Education IRAs

Education IRAs

Last month, I briefly explained the difference between the various Individual Retirement Accounts. This time, I have another IRA to tell you about. It is the Education IRA. Education IRAs, for those under age 18, are quite different from other IRAs. For one thing, $500 is the total maximum that can be contributed to an Education IRA. This is in addition to any other IRAs you may have (recall that $2000 is the total that can be contributed to any other IRA or combination of IRAs). A person can also contribute to an Education IRA even if he/she does not have earned income. However, it should be noted that the $500 maximum contribution can be made only if the contributior’s AGI (adjusted gross income) is less than $95,000 for single people or $150,000 for joint filers. Furthermore, the ability to contribute to an Education IRA is completely lost if a single person’s AGI is above $110,000, or $160,000 for joint filers. The contribution is phased out in between those ranges.

As long as the Education IRA’s beneficiary’s higher education expenses (books, supplies, equipment, fees and tuition, and part of room and board if enrolled half time or more) are equal to or more than the Education IRA distribution for the current year, the distributions are tax free. In most cases,a 10% tax is tacked on if the distributions are greater than the qualified expenses. In addition, the beneficiary has 30 days after turning age 30 to use the Education IRA funds.

Obviously, there are other requirements and details which cannot fully be explained here. If you think an Education IRA sounds like something you’d like to invest in, your own research will prove invaluable. Two good places to start are at Kiplinger (http://www.kiplinger.com) and the Motley Fool (http://www.fool.com). Good luck!