Debt problems in today's life

In today's world everyone had some problems in their life but among all these problems debt is a big one because if you fall in debt you will never get out of it until and unless you will take some necessary steps because debt is like monster who slowly makes your life hell.If you ask someone about how to get out of this problem everyone give you lot of suggestion but apart of all of these you need to run your innovative mind to solve your problem and to solve this vast problem refinance is the best option for you . Because if you refinance your loan in a low interest rate your pressure will be reduce . If if someone gives you the surety that he will he solve your prob entirely they are telling you .Because you can't solve this problem ina minute.

If you are unhappy with the service or interest rates present lending company or organization, you can just try for refinance. Even if you are unhappy with the repaying time of your current lending organization, you can apply for a refinance. Whatever may be the case, you will get relieved from your monthly bills. Making your loan bills as one single bill will eventually reduce a lot of burden for you. If you are not completely satisfied with the refinance option, get online help from experts on this field.
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How to settle your debt

If you have piled up huge amount of debt, then you should take necessary steps to curb it as soon as possible. If you don’t reduce your debt load, then be sure that your credit score will fall. And if you have poor credit score, then lenders will reject your loan applications. But the question is how you will reduce your debt load. Well, you can reduce your debt load with the help of debt settlement program. A debt settlement program can lower your payoff amount by 40% to 60%. There are lots of companies that offer debt settlement program for a fee.

When you hire a debt settlement company, the representatives of the company open a trust account for you. In that trust account you are supposed to deposit money till you have accumulated 50% of the total debt amount. Once you have done that, the representatives of the settlement company will negotiate a lump sum with the creditors. You have sign a contract and pay off the amount.

Four Easy Debt Reduction Tips

I like to write about an array of personal finance topics, but my true passion is debt reduction.

Tip 1 -
Make credit card Related payments as early as possible. This also decrease your average balance also the total interest charges.

Tip 2 -
Try to Be both physical and emotional Strong. Debt reduction also need 3 things 1) money, 2 a great plan, and consistent dedication.Towards credit card Related payments formulate a great Goal to reduce your debt.

Tip 3 -
Stop now adding to further debt.Decreasing credit card amount by $550,only to charge $700 on if you contain other card will not make any sense.

Tip 4 -
Basically Focus on small principal amount.I also know we too can get fascinated by high interest and correctly so but the instant road to eliminate tour total debt is also is reduce the principal amount.I want to disburse my regular EMI, too much early in the payment cycle, and after then i will disburse the extra payment for entire the month. also I have verified with my creditors to make sure that I know how they handle the extra amount of payments.

Debt Problems

Debt always comes from spending money you don't have. And all it takes is a little negligence from your side and your debt will become a burden for you. It is the stage when you start looking for help frantically. You can get help with debt problems from various internet sites as well as from credit counselling companies but the most important step that you can take is curb you’re spending.

What you can do yourself

• Acknowledge: Most of us are afraid to admit that we're in debt. If you try to hide it from your family and friends, you'll be cheating yourself. Tell yourself that you're in debt and will try to come out of it.
• Start saving: Make it a habit to save a certain amount from your income every month. This will help to make a cushion of money for you to pay off your debts.
• Write down your spending: This will help you to check out where you're spending more and you can cut down on those.
• Start paying: Start paying your creditors with the amount you're saving per month. This will lessen the burden of debts from your shoulder.
• Increase your income: Try to get a part-time job or do overtime at your present job. This will help you to earn more and you can pay off your debts faster.

Credit counseling companies

You can also contact a credit counseling company to get help with debt problems. They've professional counselors who'll analyze your income and expenses, make a budget, and negotiate with your creditors for lower interest rates and payments. They'll also give you advice to have better control on your finances in future.

Internet Sites

If you don't want to go to any counseling companies, then the internet is another good option to get help with debt problems. There are many good credit counseling sites which give you proper advice to get out of debt problems.

But always remember that the best way to stay away from debt is by spending wisely. Control your expenses and you'll never be haunted by debt problems.

2 Small Steps On Getting Rid of Debt burden Syndrome

Worry is now a short of tale in recent state of the economy and usually slow spirits of the American recent population.According to reports of job market,interest rates is rising ,and growing debt is also increasing which is great burden for Americans.Self battles,with trying to secure our family at the same time is also to think about and security of job.

Dr.Alan Manevitz,has said that the burden of security from foreclosure,credit card debt help,is going to the man who have the good profile,and want to escape ignoring creditors also it has been designed with so many individuals.High B.P,inflammation,asthma,and heart rate,muscle tension these are some of manifestations you may consider from your burden.

The solution for Debt burden Syndrome is a different fever which can not be solve by general medicine or capsule.Rather the cure formula to this burden lies fully with the individual affected.We can follow some suggestions from Dr. Manevitz which can help is given below:

1.Never ignore It

The initial step in facing this problem is accepting yourself that it contains the first positions.If you wast some security from foreclosure, that is facing more credit card debt ever, and are also avoiding the cell in worry that that a creditor will be on the other hand, you are possibly under
few sort.Try to succeed the debt issue and stress head on if possible.

2. You need To Proactive Also

Always do remember If you do not begin yourself to look for solutions to your positions,you might hardly get rid out from debt also the critical problems which comes along with it.Also You would be guided to know the fact that how bankruptcy might assist you in getting rid of huge debt.

Debt Settlement frauds - 3 important Tips to stay away from being cheated By Debt company

To keep away from being one of their sufferers, you ought to be on the sentry of the characteristic plans of below scammers there are few ways that you be capable to mark a company or organization with debt resolution rip-off and this unique article will show you exactly what they are in reality.

1. Business Years - Those Companies who actually concerned in debt settlement scams don't end long for some reasons that are really understandable. But still although they include clogged operations, they can still revive using a dissimilar squad and different business forename. So whenever you are planning to hire a company companies who be able to help you in settle your debts, just ask for their age into business and also the and find out the address information ,names of their organization team.

2. Inadequate papers Testimonials - accept as true or not, a good testimonial or document from customers is a sign that the corporation is effectively fulfilling customers in their debt settlements. So keep looking for Testimonials

3. Get proper relevant information from credit card companies - This might not at all times be the mainly suitable come close to other than trust it or not, this could be a great help. Credit card companies now and then do not salutation the thought of you annoying to assemble a resolution through them so it is comprehensible if they converse alongside a settlement company. though, in a few cases, they can provide criticism regarding a corporation plus this criticism can exist obliging to you at what time you actually are investigate if the corporation has been involved in arrears resolution rip-off or not.

Know how a collection agency can help you

This editorial provides knowledge regarding process of recovering your awaiting debts, just catch some the steps that have to be use and in what way a debt recovery agency be capable of helping you in debt.

There are several small and big business concerns for debt collection whereas huge business houses are liable to include their personal debt revival process and techniques, debt recovery division of their own purpose. Whereas small business holders who countenance the utmost difficulty. In these cases some of the small size business owners surrender the liability for a variety of dealings along with that sometimes simply since the hassles concerned. Despite the fact that it is factual that debt collected works does engage long time and huge energy, amazing that's barely for ever and a day available, it must be include that this isn't unerringly the accurate loom.

Also there so many government avenues where you can approach, to regulate requisite assistance for debt recovery, like a little Claims Court for illustration. Though the difficulty here is with the intention of you can cash money of simply a little value, to facilitate up to $ 3000. A superior option why could be in terms of a debt collection agency.

While the largest part of us think that hiring a debt collection agency occupy big dollar is not unavoidably factual. In actuality it possibly will be a money-making good deal for you particularly in cases where the amount of debt to be repaid is quite large. You should enquire the collection agency about their fees before you employ them. The Internet will give you a wide range of choices from which you can take your pick. Maximum time a debt collection bureau mechanism on no assortment no debt basis, this workings fine for everyone concerned.

In actuality some of the additional options may also you could discover through a debt collection bureau agency. These comprise also selling of your bad debts to the collection bureau agency a cost that's less that the authentic collectible. Many recovery agency in recent days may offer profitable offers for minute industry houses which only you might attempt out intended for size.

Debt collection bureau agency, just defined is a personal agency so as to have a own team of citizens who are proficient in debt collection. Debts through different idea while of way enduring by the money owing collected works Practices Act.

These collection agencies always work with without help while using their individual Techniques to attempt and understandable the debt. Such actions frequently engage the following Tips :

-Dispatching drafting of warning letters
- giving the legal notices (in extreme cases)
- planned the important meetings with the debtor with his creditor
- functioning on about the court settlement
- Negotiation with customers about his skill to reimburse back the debt

Sooner than you in fact reconcile in a meticulous debt recovery agency bureau, ask for their testimonial also the proof of their earlier settlements. Also find out and make sure that they contain sufficient understanding in the division of you or your business is positioned. Also you need to make sure that the recovery or collection agency you engage utilizes reasonable practices in this era while recovering the debt. This probably would keep you safe from needless difficulty if the client makes a decision to take legal action against you for needless irritation.

A debt recovery agency might be your easiest method of an untidy continuing recovery method, just try it once and ensure on your options whilst you be at it!

Plan to Get Out of Debt

Six easy process to Pay off Credit Cards and Loans

Debt is not a terrible object if you know how to happily disburse it off early. except if you cannot create those operating expense, it is real moment to plan to decrease your all debt.

1. Your approach

Earlier than you commence construction a debt decrease plan, regulate your philosophy to construct sticking to the diagram to plan a lot more easily:

* Keep in mind that cuts you create in expenditure are impermanent. Never fall into ensnare of sentiment "everlastingly disadvantaged".
* The point of Time When you start feeling like giving up on plunging your debt, keep in mind to little steps demonstrate consequences cumulatively. If you discontinue captivating individual’s small steps, you determination not observe the consequences. If you attach to it, inside a hardly any months you will see what you include gifted.

2. Always Plan to expend less

Describe your expenditure by means of a monetary plan in addition to remain luxury expenditure to a smallest amount at the similar occasion seeing that you are tumbling debt. You also can generate a certain budget on one term paper, with a table enduring to use credit cards or captivating out new-fangled loans makes no wisdom whatever while you are in long debt decline form.

3. Know which debt to eliminate in cycle

Check out t this is the proper order in which you ought to pay off your debt, along with the mortgage programmed proceeding since it gives a tax assumption at a comparatively low interest charge.

1. balance sheet with dual figure interest
2. Non-mortgage financial records with only digit interest
3. university loans
4. Mortgage, credits

Never roll your debt keen on mortgage also refinancing. Refinancing does something to modify

4. Know which Debt to Pay Off First

Assemble your report statement and catalog your amount overdue by interest rate, with the topmost rate at the pinnacle of the register leaving down to the balance sheet with the lowest interest fee. Just write downward each creditor, what you owe the interest charge and the monthly expenses.

Erasing the debt with the uppermost interest rate primary saves a considerable quantity in the lengthy run.

5. recognize How Much Can afford to Pay yourself

To determine how to a great amount you can pay out each month on the way to your liability, you necessitate putting together a budget. It will need some alternative to allocate extra money to the first debt you wish to pay it off.

In your financial plan list fundamental requirements like residence, utilities, shipping, food along with wellbeing care in adding up to maintain outlay at a least amount in these areas by not wasting gas, turning down the heat, shopping sales, etc. Either eliminates luxury expenditure or slash it reverse radically and be relevant the investments in the direction of the debt. Be certain your budget contains lowest amount payments on amount overdue you which are not paying off in time, and consider captivating on extra service to use toward income also toward your debt.

6. The prospect: Stay away of Debt

After when you have paid off your debt, you always will experience the self-determination and freedom of being debt free. After sticking to a financial plan you resolve make wiser spending decisions designed for the hope. Get further debt if you Really wish.

6 ways to debt independence

Want some actual strategies for digging out from debt, here is the consolidation to financial advice.

If you bring credit card debt, paying it off be supposed to be your top economic priority for two essential reasons.

First, it provides you a definite rate of return of seeing that much as 21%, lie upon the rate charged by the credit card provider. So expensing of off $2,500 at 15% yields a 15% return on that money.

Next, paying off debt provide you the amount of flexibility. If you're prolonged to the boundary on your credit cards, you encompass no edge for error; refusal space to plan if you have an urgent situation. Paying along debt cost up your cash flood and gives you the occasion to take benefit of a convincing profession move -- or an immense retreat.

Following 6ways are below:
1. make out how a large amount you be in debt collect all your credit card statements and create a list that includes the interest rates, entirety amounts you owe along with smallest monthly payments. List the cards by the curiosity rates they charge in the midst of the highest rate foremost and so on. "A lot of community have lost pathway of what they owe.

2. Preserve the two cards with the lowest rates. Cut up the others. mark to the card issuers and padlock the accounts. (individual caveat: Check the terms of use prior to you cancel. several credit issuers charge higher notice rates on the remaining balance due to people who close their accounts. If this is the container on one of your cards, disburse it off and afterward cancel.)

3. If you are not having a credit card with an interest rate of a lesser amount of than 14%, get one.

4. Decide that you will make use of your cards only for urgent times over the next six months. For other buying goods use cashes otherwise a debit card.

5. Add up your negligible amount monthly payments. Credit cards some times require awfully. Follow them moreover you will be paying everlastingly. For illustration, if you owe $1,000 on a card by means of a 17% interest rate, highly experts say it will take you 12 years plus charge you $979 (in totaling to the principal) to pay it off if you create only the smallest amount reimbursement.

6. Compute how a large amount you know how to pay over the smallest amount. actually stretch your budget. For illustration, let's understand the lowest quantity expenditure on your credit cards sum $350 a month. What possibly will you reimburse if you in reality prolonged? How regarding $750? No risk no profit

Just the once you've compensated off the balances, you've got to be grave about staying life of debt free. If you need self-control, judge using a debit card. Or else, pay as you go -- the total balance on all card while it comes in.

Chapter 7 bankruptcy: programmed to address debts

Debts are troublesome as they rob you off your financial stability and force you to slide into a financial mess, the consequences of which haunt you for several years. Chapter 7 bankruptcy stays in your credit report for a period of 10 years. This can be avoided by opting for the bankruptcy alternatives that can make you debt free in a systematic manner. However, there are many debtors that don’t have any other option but to file bankruptcy.

Majority of the consumers file either Chapter 7 or Chapter 13 bankruptcy. Filing bankruptcy has become a lot more difficult with the introduction of New Federal Bankruptcy Laws that were introduced on October 17th 2005.

Types of debts that can be dealt with in Chapter 7 bankruptcy:
You can do away with your unsecured debts when you file Chapter 7 bankruptcy. These may include the following –

• Payday loans
• Credit cards
• Medical bills
• Utility bills etc.

As far as eligibility is concerned, in order to file Chapter 7 bankruptcy, you have to qualify in the Means test. When you take the Means test, your income is compared to the income of a similar household in the state in which you are residing. If your income is less than the state median income, you are eligible for filing Chapter 7 bankruptcy.

Get the protection of Automatic Stay:
When you file Chapter 7 bankruptcy, a court appointed trustee will sell off your non-exempt assets so that your creditors can be paid off. One of the most important aspects of filing bankruptcy is the Automatic Stay that prevents your creditors from coming after you to collect their dues.

Undoubtedly, filing bankruptcy (any type) causes lasting damage to your credit rating but it is not the end of the world. There are many ways you can repair your credit rating but it is definitely a time consuming process as there are no shortcuts to a debt free life.

Validation of Debt: how to identify?(2)

I am back with the continuing next part of my previous discussion regarding different facts of debt validation, & the ways to identify a real validation. Here, I would like to share with you some more necessary points that helps to identify a genuine debt validation.

1) One of the mostly practised way of debt validation is sending the debtor a copy of his/her loan agreement with the creditor….and the copy is signed by the debtor himself. This method is of a genuine debt validation procedure, where the signature of the real debtor has to be in that agreement. Therefore, you must look for your own signature in that.

2) Another point of precaution: believe me, so many dishonest debt collection entities are operating in market now…..they are conning those diligent individuals. The list of frauds of this profession is seemingly endless now. So you must not trust any debt collection agent, and NEVER take any promises made by them…..when it comes to your debt validation. You possess the sole authority to claim that the collection agency demands that the debt amount is of you and they have got the power to collect it.

3) Often, in the name of a validation, just a print out with your name and the amount of your unpaid debt is sent to you…it is a quite known practice, and many debtors have already experienced it. BUT, REMEMBER: that is not a real validation. Therefore, a debtor must not be deceived by this kind of inappropriate debt validation report, and one has to understand the things that validation does not imply.

4) While placing a validation request for his/her debt amount, always a debtor should ask for a written record. Another kind of true validation is a report of the debtor’s account with the creditor, the payment making history and a signed written notice from the original creditor.

Validation of Debt: how to identify?

Debt validation means re-estimation of total amount of your unpaid debt. Putting it simply, it’s the recalculation of exactly what you owe….only the process is requested by you, & whole thing is done with your consent. When you want to go for this process? Its when you challenge the debt collectors of any debt collection agency, who have got the job to “squezze” you for the payment, & therefore started making harrassing calls day in & day out to pressurise you. These “collection” guys have a very bad habit often; they often send you the incorrect information about your total debt amout & show the total amount much more than your exact real amount in their calculation. If you have got to combat them, your debt validation is the option you must go for.

However, people need to be assured that their debt amount is properly validated. Is there any way to figure out that the validation of our debt we are getting in response is genuine? Unfortunately, not at all….in most cases.
Here, I would like to share with you some points related to debt validation. I trust, that these details would help you people understand how to identify a real debt validation.
1st important thing is: sending debt validation request letter. Every debt validation request letter has to be sent through Certified Mail Return Receipt Requested to generate the written record for you. I mean, you people have got to make it a point.

Credit card debt: obstacle for your peaceful finance life (part 2)

.....I am back again, to throw some more bright light on the necessary facts associated with Credit card debt releif issue.
On my last post regarding this topic (where I firstly came up with this issue & started discussion.....I guess,), I made you aware of the common financial mistakes and wrong, uncalculated financial steps responsible for the accumulation of credit card debt. I told what it takes to get unpaid heap on your cards, and why its a FATAL HABIT (as I described it) to use a lot of cards. But then, how to avoid card debt completely? How careful we need to be while taking any financial step, and what are the right financial steps we need to take to save ourself from card debt? How strict, choosy & picky we need to be about purchasing all the stuff via credit card? All these questions always keep haunting every simple, middle class working guy....like you all, I have also been looking for answers to them for a long time and came up with a few solutions & tips...which I trust, are useful for card holders to keep in mind.
Lets see, if my words help you:

1) 1st of all, stop unlimited, unmeasured & unleashed use of your cards. Keep in mind: your cards are to support you in case you find any tough situation, where you need money & you dont have the cash to pay. Their purpose is to provide an instant monetary backup...by letting you borrow from your lender, whenever you are in need to make any payment. You are not supposed to finish the total credit limit given; so, purchase your loved things, enjoy, buy gifts; but within a limit. You have to set the limit of card use every month, according to your income & overall financial capacity.

2) To be able to configure that card use limit, (i.e. exactly upto what amount of card resource you should spend in a month in shopping & other things), the best way is to draw your own income-expense budget each month. The budget, of course, has to be made according to your income. Then, you can make a list of things you have to purchase or should purchase each month, as per the priority. Initially, try to stick to the buy of priority only....try not to go out beyond the enlisted things too much.

3) Try to reduce the habit of borrowing. More loans are there....more amount of unpaid money piling up on your cards. Those, who take loans every now and then...are generally, more likely to drown into debt. Ita a fact.

4) Why unnecessarily using too many cards? What is the facility? You might say: man, I am getting huge credit balance!! Then give a look at the odd side: more credit balance in your hand, more consumption, more misuse....after all, its hard for us to resist the temptation to spend more, when we are getting more. Isnt it?

5) Try to carry out a monthly calculation on the debt (if any) you have got on each of your cards. This calculation should be done at the starting of each minth, when you are getting your income in your hand & are set to draw the monthly budget. This shall help you to get the clear picture of your present debt scenario; you can act accordingly.

Credit card debt: obstacle for your peaceful finance life (part1)

Its true....that plastic piece looks a small thing and seem to be an ignorable object no doubt, but the monetary debt generated out of it is really demonic & scary.....it is enough to disrupt your otherwise peaceful financial life. And the debt scenario of this type in US is staggering, indeed.....inspite of US govt. taking several steps at times & distributing several public tips to brun the card debt of poor Americans. But, among al;l other debts, the debt with your card is the worst thing for your life....it may easily hamper your tension-free life. Right now, people from half of America are drowned in debt they have produced on their credit cards. And what are the reasons of such huge amount of money on cards being irregularly paid or not paid at all?

Well, we always know the main negative factors:

1) ill-measured, unlimited use of cards, always beyond the credit balance given....without considering one's financial capacity to repay all these;

2) Incorrect expense budget calculation or NO BUDGET CALCULATION at month's begining....so no idea of what are all to be purchased, purchasing upto what amount to be maid this month to balance between income & expense;


3) Cursed habit of taking loans every now and then....for each unimportant items that come in way, without considering the true necessity;

4) We use a huge no. cards, provided by different lenders....its a damn fatal habit. Its a very linear equation: more cards you use, more "missues" of your cards actually you are making by making unrestricted & unleashed use....means, more debt is mounting up on each of your cards at month's end. Add those individual debt up together.....you shall faint seeing the figure.

Indeed, there are more to discuss on this topic......but thats all for this post.....I shall come up with more on the next one.

Pay off your debt to lead a peaceful life

Whenever a person is drowned knee-deep into the huge burden of unpaid debt (may be of bills, loans etc.), the thing he or she is badly in need of is an option……which can make his debt paid, and take him out of this ongoing anxiety and pressure. We know, that Debt consolidation programs offered by many companies have already gained enough fame and publicity as a useful means to pay off our debt. However, other options are also there in market…and they are as good as the 1st option at the task of managing the payment of your unpaid bills, and protecting your financial set up. I have worked a lot on different bill management options so far, putting my endeavour in finding out every possible option, and counting the total number…and as per my findings, there are total 5 options including debt consolidation, to help you for your debt elimination and set your life free.

A) When you have huge amount of different unpaid bills you are unable to pay off, a debt consolidation loan from a consolidation company can be just the required to help you out. This loan, actually, works as a fine, single replacement of your different bills. How? It consolidates your different unpaid bills and converts them into a single payment scheme……that means, your making just one payment actually pays off all your bills. According to the terms, the loan company gives you a convenient, affordable monthly payment scheme to pay back your company. What are the benefits of this? We already know…
1) it helps us to avoid bankruptcy
2) Does not leave a negative impact on our credit report & credit score
3) helps to chalk out our budget each month as the repayment amount is fixed each month
4) No need to deal with several creditors at a time.
5) Helps us get rid of harassing debt collection calls

B) This is a very useful option for consolidating the debt of only different due bills. In fact this option had specifically been made to meet the need of fixing the unpaid bill debt problem.The process is almost similar to that of loan consolidation. You approach to any bill consolidation firm, which then starts negotiating with your creditor to get your interest rate reduced. And, then all your due bills are consolidated and converted into a single monthly repayment scheme.

C) I think, we are already pretty aware of the usefulness of debt settlement, and perhaps some of us have already been through this process…..so I desire here just to remind you of this available option. This process works best to get your debt paid off whenever you are shouldering a huge amount amount of debt, and unable to pay the total amount. The settlement companies, who gives this service actually negotiate with your creditors to get your total due debt reduced….at least by 40%-60%.....thus your total payable amount is settled at an amount pretty less than original amount. Pay that, and you are fee from debt!!

D) Bankruptcy is always an option to take you out of your debt. But frankly speaking, it is not very preferred, or recommended one. Rather as a man of finance world I would tell my readers not to go for a bankruptcy filling, because a single bankruptcy may be enough to disrupt you credit profile, or to leave a permanent negative impact on it. However as a consumer, you may file either Chapter 7 or Chapter 13 bankruptcy. Actually it depends upon what type suits you and which one you are going to qualify for.

E) You can manage the payment of all your bills, and pay them off even without any professional debt assistance. Sounds tough, especially under the post recession financial situation, but trust me it is possible. But to do that…1st you need to become an efficient manager of your own finance and monthly expenditure. You need to analyse your true financial set up and capacity, and based on that need to prepare your own monthly budget. Then stick to that, and follow a repayment plan accordingly. I myself have done it!!

Bankruptcy: some misconceptions you should stay away from (2)

In my last post, I explained some of those harmful myths on bankruptcy filling, which terribly mislead all Bankruptcy seekers and other people facing debt problems and take a harmful toll on their financial stability. There are some more misconceptions about the procedure of bankruptcy filling, which therefore I want to make you people aware of.

• Husband and wife-both need to file for bankruptcy:
Husband and wife should file it together only if both of them want to eliminate and get rid of those debts which they both owe and both are liable to repay. Otherwise, the spouse who have not filed may be asked by the creditors/lenders to make the total payment of the amount of unpaid debt. Apart from that, it is not always essential that the spouses have to file bankruptcy together.

• A man files for bankruptcy-when life is debt-stricken:
Till date, bankruptcy filling is associated with the issues of social stigma and humiliation….let us not forget to admit this fact. Many of us still nourish this viewpoint that only when people suffer from a severe financial crisis and have got a huge debt burden they can not pay off, they tend to file for bankruptcy to get rid of all. Such incapability to pay the bills or loans in normally believed to have caused due to a lot of bitter experiences people face in their lives, like- divorce or mutual separation, job loss, accidents, or even serious illness.

• Bankruptcy raises credit profile and gets you easy-rate loans:
In one way, bankruptcy is the legal remedy to let you go from all your unpaid debts-undoubtedly, filling bankruptcy indicates your failure to make payment of your loans. Therefore, a bankruptcy can have most negative impact on your credit report, and can badly affect your credit score. Unfortunately, there is a terrible misconception that bankruptcy sets you free from all debts, hence no account of non-repayment or failure of payments of the loans remains in your credit history and your credit rating is improved….but that is wrong. Rather, the black spot of a bankruptcy information remains even for 10 years on your credit report…and your chances to get loans at affordable interest rates are decreased.

• Escaping back taxes is not possible by normal bankruptcy :
Normal bankruptcy filing can not let you go free from all your unpaid taxes, and if you think like many other people that you can escape your back taxes by just a bankruptcy, you are wrong. It is possible only by filling for a tax bankruptcy. This process needs you to file all your returns, and, additionally, all taxes you owe have to be at least 3 years old.

Bankruptcy: some misconceptions you should stay away from (1)

We all know that the event of filing bankruptcy is scary enough. Bankruptcy carries several misconceptions along with. If you have got a heavy burden of debt on your shoulder, you should first look for some other alternatives for setting yourself free from debt problem; bankruptcy should be your last option. But if other doors are not open for you, you have to face bankruptcy. However, some of us do have some wrong myths and misconceptions about the entire process of bankruptcy for which they often face lots of financial problems and hassles in the long run.

I would like to share a relevant list of such misleading ideas about bankruptcy that many debtors among us often come come across with:

• Filing Bankruptcy happens only once
Within a short time span, one cannot file for bankruptcy twice. Many debtors file for Chapter 7 bankruptcy at 6 years interval. Of course one can file for Chapter 13 more often than Chapter 7. But neither it is recommended, nor it looks ideal. The reason: filing more than one bankruptcy often damages your credit rating seriously and destroys your chance of getting lower interest rate loans in future.

• It is impossible to get credit again
The negative impact of a bankruptcy event lasts on a credit report for 7 to 10 years. So most debtors who have filed for bankruptcy think that their credit can’t be regained for that time period….so they can’t avail any loan for a long time. But it is not totally true…for you, mortgage loans or car loans are still available, though a bit difficult to get and the interest rates are higher for you. Those lenders offer sub prime loans at very high interest rates.
You can get offers of credit card too. Here are some essential points on credit card : suppose on the day of filing your bankruptcy, you have a credit card with zero balance; as you don’t have any payable debt on it, no need to include that in your list of filing. Even you are free to work on payment of any unpaid debt while you are filing, though this is not advisable to do so at that moment.

• Bankruptcy filing is very hard
This is a completely wrong conception that filing for bankruptcy is a tough, tedious and complicated job. Rather, the truth is that often filing a bankruptcy can be successfully and hassle-freely done without even seeking help of an attorney-though it is always recommended to have a prior consultation with him about the legal aspects to set yourself prepared before you proceed further.

• Chapter 7 bankruptcy is the one-stop solution for all debts
Certain kinds of unpaid debts are there which cannot be eliminated by filing Chapter 7 bankruptcy petitions. Debts which are not covered by chapter 7 are:
1. alimony.
2. child support expense
3. Fraud related debts.
4. Unpaid student/education loans.
But, many of the debtors belief strongly in this wrong idea that Chapter 7 bankruptcy can remove their each and every unpaid debt.

There are some other misleading thoughts in market regarding bankruptcy which i shall discuss about on next day in the 2nd part of this topic.

A few essential steps to live a debt free life

Proper and timely financial planning is the secret to a life free from debt. You have to maintain a strict money management policy and develop the habit of saving your money. We all know very well that proper and efficient management of wealth raises your money investment potential. At the same time, it increases your financial security, stability and reduces your chances of being overburdened with debt due to failure to repay your loans and bills. The best way to avoid the loads of unpaid credit and live a debt-free life is to understand the difference between desires and necessities (or wants). Our desires do not always develop in accordance with our financial condition; they do often outnumber or outweigh our true affordability, and we end up spending a lot more than our fixed budget. That means the amount of money we owe others also increases. We all, therefore, should try and develop this habit of saving our hard-earned money during the summer time, in anticipation of a bitter forthcoming winter. You should buy only what is necessary and should avoid impulsive shopping. A healthy habit of saving money should follow the ant model.
Here I would like to share with you all a comprehensive set of practical suggestions which shall save you from living a debt-stricken life and help you live tension freely.

• Proper Budgeting
Make a proper and systematic plan of your monthly income and your expenditure per month. This is essential to properly organize and categorize your finances. Chalking out a monthly budget helps to avoid unwanted loads of debt. This way, you will have a ready reference of your financial position, and a picture of your true affordability.

• Savings
Controlled spending and proper saving of money is a practical and old method of strengthening your overall financial condition and creation of wealth, used for a long period of time. As the old saying goes, a penny saved is equivalent to a penny earned. Savings allow you to look forward to a safe and stable future. Even if some financial emergencies and other unfavorable situations arise, these can be tackled successfully with a strong savings, which indicates that you will not need to carry a burden of debt to be paid back once that financial crisis is over. Your savings would help you stay away from taking loans.

• Search for utility gifts
Giving decent, valuable and meaningful gifts to near and dear ones on different occasions bears a good social response and conveys positive and nice attitude. But we need to pick up things for gifting which best suits our pocket. Means we should not get carried away by the urge to give costly gifts, and spend on gifting beyond our affordability. Remember: the depths of your feelings are not judged by the price tags of your gifts. You must take care to develop a habit to evaluate the utility value of the gifts, rather than their price tag.

• Control your spending
Try and develop the wise habit to restrict your expenses on various occasions within your financial capacity. Unbridled spending is the most risky way for your finance…it may anytime invite debt in your life. Prepare a shopping list of the necessary articles before you go to shop. Also, inside the shop, buy the things which you only need. Then step out as quickly as possible. Try to spend the minimum possible time inside the shop.

• Check your credit card use
Everybody knows that credit cards are the perfect ways of being caught into trap of debt burden in near future. So we should not use more than one credit card under any circumstances. It is a better option to shop with cash money. That helps actually to keep a constant track of your spending and restrict your expenses time to time, if necessary.

• Festive season warning
The festive season brings the requirement for socialization and entertaining people. While you entertain people at home, try to avoid wastage of food at any cost. You have to make sure that the menu is prepared beforehand. Festivals like Christmas, New Years Eve etc. involve a lot of expenses. Make sure you have advanced planning for such expenditure.

How to fight back the Rude Debt Collectors

We all are well aware of the ill behavior, rough communication of the much-discussed debt-collectors when they get set to manage the collection of payments from individuals and indeed, many of you people already got the nightmarish experience of having to deal with them when they start chasing you for taking out the payment you owe. Even more reports are coming from some consumer groups about the fact that some debt collectors are crossing the line into illegality. Whenever you face a financial catastrophe - an illness or a job layoff, and you have got a load of unpaid debt piled on your shoulder or simply you've fallen behind on some bills, you are well aware that debt collectors would die to take out those payments from you by hook or by crook-using all the bad and mean ways as and when necessary.
Some most common complaints from consumers are about:
1) Collectors use vulgar and indecent language to compel you to make the payment to get rid of them.
2) Collectors threaten, harass, humiliate or repeatedly disturb over phone
3) They try to collect more than the customers really owe
4) They do not care about the consumers financial privacy and his right to keep his financial particulars secret; they just share the consumer's debt and credit related information with friends and family
5) Collectors even try to collect extra fees, like late fees or court costs etc.

However, complaints about debt collection agencies and against those collectors are on the rise. Perhaps, this situation of panic and harassment created by these collectors would be more clearly understood by the following real-life case studies obtained from different media:
1) In a case, a collector directly threatened to call a woman's workplace (office where she worked) "until she lost her job." –news obtained from National Consumer Law Center.
2) In another case, the debt collector threatened one 9-year-old child, who is the victim of identity theft, to take her mother away forever.—a story told by Mr. John Fugate, a Texas consumer attorney.
3) Another worth mentioning case I remember is about a debt collector who started calling up someone's grandmother four-to-five times a day and kept threatening her so that she dies very soon and the amount to be received from her life insurance policy can be easily used for payment of this debt.—complaint received by The Better Business Bureau.

The Federal Trade Commission revealed one highly interesting statistical feedback : according to them, they received much more complaints against debt collectors regarding their wrong activities and unlawful, unethical business than against any other industry for at least the last three years. For last five years, no. of complaints have increased by 43%, according to the market research carried out by Better Business Bureau.
But there are exceptions too, in the same block. ACA International is one of the largest credit agency and debt collection industry groups, and running without a single black spot or stigma in its whole trade history so far.

It goes beyond saying that to get rid of the debt collection related harassment, penalty, insult, shame and the risks involved of course, the best way is to make every effort to pay off the debt, close the entire chapter and stay debt-free. But, believe me, still it is very useful, effective and a wise decision to know your debt related legal rights in order to fight these mean collectors. Most people do not know their rights and suffer. And debt collectors take advantage of this fact only. The Fair Debt Collection Practices Act clearly includes the necessary directives for the debt collectors to treat you and your family with dignity and respect—but no way the Act does imply that you do not need to pay your legitimate debt. Here are some expert advices on how to fight back against unethical collectors:
• A debt collector does not have the right to call you before 8 a.m. or after 9 p.m. without prior consent from your end.
• If your employer disapproves, the collector can not contact you at work.
• If you do not intend to hear from a debt collector, send a letter telling the agency to stop calling you right away .They would have to abide by your wish by law. BUT--remember, stopping a collector from calling you does not set you free from your debt and they can still sue you.
• If you have employed an attorney to look after your finance and investment issues, the debt collector can contact your attorney. If not, your friends and family can be asked about how to get in touch with you.
• A debt collector has no right to misrepresent the exact amount of your debt.
• Use of profane or threatening, humiliating and pressurizing language either over phone or in person is strictly prohibited for a debt collector. Any such activity would be treated as a mental oppression done on the customer and would amount to an illegal act.
• A Debt collector can no way declare that he will put a lien on your property or file a lawsuit unless the agency really is set to do that and it is a legal step at that time.
• Collectors are not entitled to claim the federal benefits, such as Social Security or your retirement accounts, like your IRA or 401(k).


And, you should remember a few things more: once you are contacted over phone by any collector or a collection agency, you have the right to get a notice from their end regarding the detailed information of your debt. It should clearly outline amount your debt, to whom you owe the money, etc. A debt collector has the right to approach one for collection of a debt owed by an ex-spouse. In case the debt was taken while you married, you may be liable for the debt even after a divorce even if the divorce papers state your spouse is responsible to repay the debt.

If you are being constantly called by a debt collector, but the fact is that you do not owe a debt then you have to write a return letter to them stating that the debt is not yours within 30 days. Once a collector gets your letter, they should send you proof of the debt. You must make sure they can not make you pay a debt you do not owe. If you pay what you do not owe just to get rid of the collectors, it is just admission of a guilt you never committed; it will have a negative impact on your credit score.

If you ever think you are treated unfairly by any debt collector, take immediate action. You can anytime file a complaint with the Federal Trade Commission at 877-FTC-HELP. You should also contact your state attorney general's office.

Debt-to-Income ratio: Way to show how much u should owe

While planning to take any kind of loan for any purpose ( may be for-a new home, a new car etc.), one must keep in mind his /her true financial condition at that time and should act accordingly. Before applying for any kind of credit, a man or woman-no matter if he/she is into service or business, should first consider and calculate the highest loan amount the person is capable to repay in time-i.e., estimation of the capacity to pay off a loan is essential considering all other areas he/she simultaneously needs to spend money on.


Debt to income ratio (DTI) is an easy yet useful way of determining the net percentage of your total income per month that is available for making repayment of your pending debts.....
This ratio is of great importance to the creditors to judge your creditworthiness and your true financial capacity of repaying loans.Debt-To-Income ratio often plays a vital role when you want to go for a home purchase.

Calculation of debt income ratio is very easy.
There are two ways by which you can calculate this ratio: First one is called the Front-end ratio and second one is Back-end ratio.

Debt to Income ratio = Total monthly debt / Total gross monthly income

Front End Ratio = Monthly housing / Monthly income

There are another easier way to calculate your accurate Debt Income ratio. This calculation process includes all your pending debts like credit cards payments, mortgage, car loans, insurance premium, etc. and them divides this total monthly debt amount with your monthly gross income:

Back End Ratio = (Monthly debt amount / Gross monthly income) * 100

To calculate total debt amount for a particular month, you MUST NOT include monthly expenses on entertainment, grocery, food and other utilities.
Items to be considered for determining Total Monthly Debt :
• Monthly Mortgage payments or Rent Monthly Home Equity Line of Credit or Loan
• Monthly Car Payment
• Monthly Credit Cards payments
• Monthly Student Loan payments
• Monthly Child Support payments
• Other Monthly Loan amount

Items included in Total Monthly Gross Income :
1. Monthly Net (take-home) Salary
2. Annual Bonus and Overtime, divided by 12
3. Other Annual Income, divided by 12
A debt to income ratio equal to or below 28% speaks for a healthy and reliable financial condition. If the ratio stays between 28% and 36% for any person, then at this point he may be considered as financially fit, but at the same time he or she needs to keep a check on the amount of debt. Any value of the ratio above 36% raises an alarm of unstable, trembling financial condition for that person. It clearly expresses the person’s poor loan repayment capacity.


How to Improve your Debt Income ratio ?
• Figure out areas where you can cut some expenses: Chalk out your monthly budget at the month’s starting as soon as you get the income in your hand-make it a priority task to get a clear picture of your expense and pending debt situation.Once you have planned your budget for the month, sit down and figure out all those fields where u can bring about some reduction in your monthly expenses. Act accordingly, strictly follow your own-made financial expense plan, cut down on your expenses in those areas and put the money that you have saved to pay off the debt with highest interest rate like credit cards.
• Visit an advisor:
If your ratio is still not improving then don’t hesitate is seeing an expert financial advisor, like- a debt management professional, monthly budget and debt planning counselor etc. Just have some good financial counseling that will help you manage your debts in a smarter and efficient way, save you from ending up becoming debt-stricken and show you the way to a debt-free life in turn.
• Set yourself free from credit card debts:
Experts say try and start doubling your credit cards payments so that you start improving your debt to income ratio. If credit cards are not your problems then pay for any other debts as long as there are no prepayment penalties.
• Fund for emergency purpose:
Try and build an emergency monetary resource , so that you can come out of some kind of financial problems in future or have a nice vacation without falling back in credit cards debt.