Consumer Credit down for 11th consecutive month

It's been 11th consecutive month since people started to spend money. American's have started to spend less money due to unemployment and poor economic conditions. The economy can rise and come alive only if people start spending and get the wheel rotating. People have started to pay credit cards while borrowing money for cars and other products. It is kinda of a mixed picture of expense and saving. Hope that this mixture refines to spending since it is the necessary condition for economic recovery.

"But the record 11-month decrease in overall borrowing shows consumers are still holding back amid lingering economic uncertainty and 9.7 percent unemployment."says, businessweek.com
A survey conducted by Thomson Reuters said Friday that the total borrowing dropped by $1.8billion-- far less than the revised $21.8 billion decline in November. This was also below $9 billion expected by analysts .

Current issue that is bothering the U.S. government is that the consumer can derail the recovery of economy if people start to save more on what they earn. Consumer spending is responsible for nearly 70 percent of economic activity.

Debt Settlement: The Full Story

If you're drowning in unpaid bills and desperately looking for a way out, chances are you've come across an offer that sounds something like this: A professional debt-settlement company will help rid you of your debt for as little as half the amount you owe.

Sounds like a scam? Or like you're finally getting the break you deserve?

The answer may surprise you. Debt settlement is, in fact, a perfectly legal solution for consumers who are in deep debt and seeking an alternative to bankruptcy.

Top 5 Benefits of debt settlement (or credit debt settlement)

Avoid Bankruptcy: With debt settlements, you can reduce your debt burden and pay off bills comfortably. You can negotiate with the creditors or collection agency and settle your debts for as much as you can afford to pay. Single Payment: Instead of paying multiple bills each month, you'll have to make a single monthly payment to the settlement company. So, you can avoid the stress of paying debts at different rates and dealing with several creditors at a time. Avoid Unfair Collection Practices: You can avoid unfair collection practices and harassment by debt collectors. Eliminate Extra Charges: The settlement company can try and eliminate late payment fees, if any. Any over-the-limit fees on credit cards can also be minimized or eliminated by way of settlement. Avoid Legal Actions: You may be able to avoid such legal actions (like garnish your wages, place lien etc) if you're in a settlement program. Contact 877-256-1471

Get Your Free Instant Debt Settlement Report

"Debt settlement, also known as debt arbitration or debt negotiation, is an approach to debt reduction in which the debtor and creditor agree on a reduced balance that will be regarded as payment in full."
- source wikipedia.org

HOW TO OVERCOME DEBT?

Entire debt burden can be thrown off if you adopt the following:

DETERMINATION: You should not become worried about your huge debts. Rather you should have the will to overcome the problem not by resorting to bankruptcy but by effective management of your money.

You have to CHANGE. You should change your lifestyle.

• Instead of having two cars, have one car.
• Stop exchanging Christmas and birthday gifts with each other
• Do not go to very far off places for vacation

FRUGALITY

• Bargain in all your deals whenever you can.
• When there is a sale, you can buy things cheaply.
• Buy generic food.
• Buy generic medicines.
• Visit thrift stores for purchasing clothes.

HARD WORK

• Apart from your regular job, take up another job thereby getting more money. You can stick to the second job till you have paid off your debts.
• If your wife is stay-at-home mom, let her home school the children.

Above all, consult a good consumer credit counselor who will help you wipe off your debts within a time schedule. Paying off your debts will be more satisfying than choosing bankruptcy.

Where there is a will, there is a way. An old adage

Truths about Debt Collectors

Debt collectors get commission if they collect money from debtors. The debt collectors’ job is very difficult and they become frustrated and adopt unethical methods.

Sometimes, by mistake calls are received by people who never owed a debt. At times, people are routinely harassed and illegal methods are adopted to collect debts. Without proper verification and authorization, withdrawals are made from accounts of people who are not debtors. Commonly, computer generated calls are used by debt collectors. But, these are sometimes directed by mistake towards people who are not debtors. Calling a debtor is inevitable as someone has to call the debtor for money. The economy is down. Sometimes, debt collectors call people to know whereabouts of a debtor who might be once your neighbor or about whom you know nothing.

In 2007, the bad debt was $ 152.5 billion and debt collectors recovered about $ 40 billion. The problems are due to unlicensed debt collectors. Most of the debt collectors follow rules.

The debt collectors in accordance with the Fair Debt Collection Practices Act should NOT:

• Make false statements or use false names.

• Intimidate consumers.

• Use obscene words.

• Call customers between 9PM and 8AM.

• Contact customers at work places.

• Contact customers without showing their identity.

• Tell others and publish the names of debtors.

• Wrongly claim that a customer has done a crime.

• Be inaccurate in the debtor’s amount of loan.

People who think that a debt collector has trespassed the law can make a complaint with the State Attorney General’s Office.

Personal Income & Expenses Report

Personal income increased 1.3% (due to government stimulus) in May, but it went down 1.3% in June because stimulus impact withers in course of time. Economic analysts had forecast 1% decrease in personal income. Because of the dull job market, personal incomes will be on the down trend for some time.

Personal spending increased 0.1% in May while in June there was 0.4% increase. Analysts predicted 0.3% increase. But, when inflation was taken into consideration personal spending fell by 0.1% in June. According to government report, the spending decreased 1.2% in the 2nd quarter but in the 3rd quarter consumer spending may increase.

Personal saving was 6.2% in May whereas in June it was 4.6%. We can look forward that savings rate will rise as consumers spend less and recover from the recession.

• Fewer jobs
• Less income
• Increased debts
• Inability to pay the debts

Consequently, there were 126,434 consumer bankruptcy filings in July 2009. This is 34.3% more than in July 2008 and 8.7% more than in June 2009. By the end of this year, the number of bankruptcy filings will be higher than the present. This trend implies increasing financial stress on US consumers and continues till the year end. Without jobs and with previous debts lead to bankruptcy.

The present unemployment rate of 9.5% is the highest since 1983. This rate is likely to go up to 9.6%. The incomes of the employed do not increase. According to one government report, spending increased 0.4%.

28.3% of July bankruptcy filings were Chapter 13 cases. According to Chapter 13, the debtor agrees to a revised schedule of repayment of his debts. In Chapter 7 filing, the debts are written off. Many consumers resort to Chapter 7 bankruptcy filing.

CELEBRITY DEBT

Celebrities like movie stars, stars, pop singers become millionaires within a short span of time and they become bankrupt also within a short period of time. Such celebs like Stephen Baldwin, Bjorn Borg, Michael Jackson became millionaires due to quick success in their careers. Their income is not perennial. Sooner or later their income from the profession declines. Meanwhile, they spend their money lavishly buying multiple mansions, luxury cars, jewels acquiring hobbies like rearing tigers, etc.

Most of the celebrities cease to get income after a while. Some get into personal problems like divorce (as in the case of Burt Reynolds), legal battles (for example Michael Jackson), taking drugs ( for instance Bjorn Borg),. Aftermath of all these things is their earnings in millions are used up and they accumulate debt also in millions.

None wants to get diminished income but one can prune lavish expenditure. Celebrities can invest their earnings in acquiring or starting industries, super markets, universities, hospitals etc in productive ways. The following are the benefits of such wise investments.

• Will generate income

• Earnings will be secured

• The generated income will help the celebs sustain a luxurious life

• Will be providing employment directly and indirectly to lot of people

• Help the society and the nation

Even if the celebrities don’t get money from their professions they will get income from the wise investments. The celebrities should not succumb to bad habits such as taking drugs. They can help charities in a limited way. Two Nobel Laureates lost all their prize money and they started teaching to earn for their livelihood. The advise is that “ Save for the rainy day”

To quote Charles Dickens as applicable in the 21^st century:

• Income 1 million; Expenditure 0.99 million; Savings: 0.01million Result: Happiness

• Income 1 million; Expenditure 1.01 million; Debt: 0.01 million Result: Misery

Debt Consolidation - Full Facts

In simple words Debt Consolidation means consolidating all your debt into a single debt with lower interest rate and lower monthly payment.

1. For example if you have three credit cards with interest rates of 25%, 22% and 21%, get a bank loan for 10% and pay off all the credit cards will improve your financial situation.
2. You can also transfer the high interest credit card debt to a lower interest credit card.
3. Debt Consolidation will help you a lot with the payment date. Since you have a single payment you can avoid late fees penalties. It will help you financially plan better.
4. You need to make a promise not to get additional debt until you pay off the consolidated debt completely. Otherwise debt consolidation will not help you and it will just worsen the whole financial situation.
5. Remember that debt consolidation does not reduce your total debt.
6. If you are borrowing against your home equity, advantage is your interest rate will be less & if the borrowing amount is less than $100,000 interest payment is tax deductible. Disadvantage is remember your home secures the loan and you could lose your home if you could not make the loan payment.
7. Another great way to debt consolidation is to borrow against your life insurance. Please check your policy to see the terms. It may be the easy to borrow for your financial situation.
8. You can also borrow against your 401K retirement plan. Note: You can be charged 10% penalty if you don't pay all the money back with in 5 years and assuming you are younger than 60.
9. Do not trust the debt consolidation companies who say they will lend you money to consolidate your debt.
10. Do not trust companies who promise to negotiate debt consolidation for an upfront fees without completely details.
11. Call 877-256-1471 for help.
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Debt Quote - Famous Quotes about Debt

"Creditors have better memories than debtors" - Benjamin Franklin

"Before borrowing money from a friend, decide which you need most" - American Saying

"A penny saved is a penny earned" - Benjamin Franklin

"Consumers got to wake up and just say no" - Dave Ramsey

"A man in debt is so far a slave" - Ralph Waldo Emerson

“If I owe you a pound, I have a problem; but if I owe you a million, the problem is yours" - John Maynard Keynes

"Debt is the worst poverty" - Thomas Fuller

"If you're walking down the right path and you're willing to keep walking, eventually you'll make progress" - Barack Obama

"I'm not against people having new cars. I'm against them having you. We spend a tremendous amount impressing somebody at the stoplight who we'll never meet. It makes you broke and keeps you broke." - Dave Ramsey

Saving Money -> Saving Family

There are only two solutions to solve this debt problem. 1) Decreasing the spending 2) Increasing the income. Let us see the ways to decrease the spending and increase the income.

Spending Less Money
Spending less does not necessary mean there is a major lifestyle changes. Even small changes can reduce the expenses and you wont even know that you are missing them! Here is how to save at least $1,650/Month easily.

• For renters it is time to find place with less rent. For home owners try to refinance or modify the loan. Do Loan Modification Here. (Save $600/Month)
• Eat at home instead of going out. When you go to grocery store do not load up the cart. Try to buy the groceries needed for just a week. Pack lunches instead of eating out. (Save $300/Month)
  
• Being healthy can save you lots of money for example quitting smoking or giving up drink can save lots of money and help you become healthier. (Save $250/Month)
  
• Shop at discount stores like T.J Maxx or Ross (Save $100/Month)
  
• Reduce Auto Insurance by comparing with different insurers. Find a better Auto Insurance plan. (Save $100)
  
• Reduce Health Insurance by shopping around. If you are paying too much right now, Find Wise Health Insurance for your family (Save $100/Month)
  
• To save on prescription ask your doctor for free samples of the prescription
  
• Contact your utility and phone companies to find way to reduce the bill. Some times they can reduce your monthly bill with out any major changes for you! (Save $50/Month)
  
• Use the community health center instead of expensive Gym. (Save $40)
  
• Use the public transportation or carpool instead of commuting to work.
  

Bringing in More Cash

• Work extra hours on your current job
• Find an additional part time job
• Take a Course in near by Community Colleges to improve your skills.
• Consider freelancing and contract works
  

Consumer Debt Going Down?

Today, we all heard that consumer debt is going down. Total debt in May fell by $3.22 billion, to $2.52 trillion which is a good sign for Consumer and Country in the long run. But, for a short time it is good for Consumer and bad for the economy which in turn can affect consumer. It is hard to believe consumers are saving money during these tough times. It is good to hear that people are saving but we should also think about the people who are just raking up their debt using their credit cards. There are reports that American consumers' credit card debt dropped by 3.69%, we have to realize that it is not because people are not using the credit card rather it is because credit card companies are reducing the credit limit on the credit cards! Consumer debt going down is a good sign and some positive news for consumers.