Debt Solutions. Get out of debt
Too much month at the end of your paycheck?
Debt is a world wide problem, it dates to the beginning of man. In our society, it’s plastic verses not having. That is the why for debt. How does one get out of debt? Pay your bills on time. That’s the first step. It’s simple. I have been a lender for many years. I have witnessed clients that live on a thousand dollars a month and own real estate! And, many people that earn a reasonable living yet have had their electric at their home shut off for non payment or their cars repossessed.
Credit means trust. Trust requires performance. Creditors expect a certain amount of variance, that’s why there are late charges. Many folk, even low income that can least afford it, pay late charges on everything they owe. It’s double interest. Don’t pay late! Start today. By paying your bills on time, the average household can easily save $100 a month or more, by simply avoiding late charges. Get out of debt by paying your bills on time. I have an obligation that has a nine hundred dollar a month late charge. Trust me, I have been the most diligent debtor since Ben Franklin!
If you have credit cards that are high interest rate, it is possible you’ve paid something late in the past. Banks will raise their existing customers credit cards interest rate for late payments on other credit accounts. Banks should reward you for making your payments on time for a reasonable period, if you ask. If your bank wont lower rates, even after paying on time, shop around, compare card offers, features credit cards from many different banks. If you are climbing out of debt, switching balances from a high interest card to a low one may be a remarkable help.
If you have a low fico score you may have high rates on credit cards, but relatively low credit limits. Pay them off as quickly as possible. Make the payments on time, save the late charges. When you are out of debt start saving monthly.
If you have old debt or charged off credit items, the rule if thumb is that your not legally obligated to pay them if they are older than the statue of limitations for the state where the debt originated. Here in California it’s typically four years for most contracts. Google search for your states Statutes of Limitations (rules on old debt). The FTC has limitations on debt collections and terms. Get knowledge, that’s the second step.
If your debt exceeds a years income consumer credit counseling may be a viable option. You pay the agency a fixed monthly amount and they redistribute the payments to your creditors. It is worth considering if the servicing of your debt consumes the majority of your monthly income. In many cases the credit counseling agency may be able to negotiate lower payments, interest rates and an abatement of late fees.
It requires a commitment, it will have some detrimental consequences on your credit report for a while. If you don’t complete the repayment plan the charges from your lender could revert or increase. Another shortfall is you may not enter into new agreements for debt while you are enrolled.
An associate of mine that specializes in Bankruptcy had a client that earned about $100,000 a year. He owned real estate but didn’t want to commit his property to refinance the debt of about $200,000. He didn’t qualify for bankruptcy because of his employment and income, debt consolidation became the logical choice. Once the plan was in place the phone calls from the collectors stopped and the debt began to diminish. Non committal phone consultation with a debt consolidation agency.
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