Debt Help by Debt Crisis Center

Consumer Credit down for 11th consecutive month

2010-02-11T17:14:00.000-08:00

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

2009-11-12T11:47:00.000-08:00

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?

2009-09-24T11:14:00.000-07:00

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

2009-09-16T10:57:00.000-07:00

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

2009-08-13T17:02:00.001-07:00

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

2009-08-03T16:53:00.000-07:00

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

2009-07-21T10:46:00.000-07:00

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

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.
You can also transfer the high interest credit card debt to a lower interest credit card.
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.
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.
Remember that debt consolidation does not reduce your total debt.
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.
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.
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.
Do not trust the debt consolidation companies who say they will lend you money to consolidate your debt.
Do not trust companies who promise to negotiate debt consolidation for an upfront fees without completely details.
Call 877-256-1471 for help.
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Debt Quote - Famous Quotes about Debt

2009-07-18T10:29:00.000-07:00

"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

2009-07-13T16:50:00.000-07:00

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?

2009-07-08T18:00:00.001-07:00

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.

Taking correct steps when having too much debt

2009-07-01T11:40:00.000-07:00

If you owe a lot to your creditors, living on a budget is only the first step towards living debt-free. Following these simple(but takes lot of efforts) steps will make the process of debt free living faster.

Work with your Creditors

Ask the creditors to lower your monthly payment that you can afford
Ask the creditors to lower the interest rate
Ask the creditor to allow you to pay interest only for short period of time
Be nice to the person you are talking to. They can help you big time
If the person does not agree, ask her you would like to speak to supervisor

Borrowing money to pay off debt
This might sound like a bad idea but it works if you do it properly. The process is called debt consolidation. Make sure you meet all the following requirements before you do debt consolidation

Combined new interest rate is lower than the previous interest rates
Combined new payment is lower than the previous combined payment
New interest rate is fixed interest rate and not a variable interest rate
Never use the credit card again until you pay off all the previous debt

Help from a Credit Counseling Agency
Credit Counseling Agency can be godsend when you have lots of debt and are struggling to make payments. It is very important to choose them especially when you are confused and struggling to manage the money by yourself. Credit Counseling Agencies can

Help you negotiate lower payment with your creditors
Teach you how to manage financial matters
Help you setup a budget that can help you debt free lot sooner
Credit Counseling Agencies should not charge you any upfront fees
Find a reputable Credit Counseling Agency near you.

Filing for Bankruptcy
Something it is better to file for bankruptcy especially if you owe too much in debt and less income. Use the following resources to decide if bankruptcy is a good option for you.

Chapter 7 wipes out most of the debt but not all
Chapter 13 is reorganization bankruptcy which gives you 3 to 5 years to pay off your debts.
If you believe one of your creditors is coming after the asset you owe it is better to file for bankruptcy.

Good Debt Vs. Bad Debt

2009-06-20T12:31:00.000-07:00

Not all Debt is bad. Good Debt can help you grow your wealth if managed properly. The Goal for everybody should be to reduce and remove all the bad debt and manage Good Debt effectively in right way.

Good Debt

Mortgage Debt for the home (Helps you build home equity)
Car Loan (Helps you commute for work and increase the income)
Education Loan (Helps you learn new skills and build a career to increase the income)
Loan to pay for an unexpected emergency (Eg. medical emergency to treat your child)
Buying things for your family to save money in long run.

Bad Debt

Credit Card Debt and paying off minimum balances
Secure a debt with your home or other essential things for your family
Borrowing money from dangerous lenders like Advance Pay day
Using Credit Card to purchase non essential things
Have high interest variable interest and make minimum or low monthly payments

How to fight high credit card debt?

2009-06-08T10:22:00.000-07:00

Economy and high unemployment rate is forcing many U.S borrowers to a high credit card balances with delinquencies. Usually, these credit cards have very high interest rates some even up to 33% which can hurt the cash-strapped consumers more. Using the following resources to get out of the credit card debt.

Talk to your credit card company. Make sure you explain your situation and be polite to the person whom you are talking to even if they don't agree to what you say. Sometimes credit card companies are willing to dimes on the dollar if not pennies.
DO NOT continue to use credit card. It is no brainer, if you continue to use the credit card and rake up all the debt. Just shred the credit cards so you wont use it.
Pay off the credits cards with higher interest first and prioritize.
Talk to your local Credit Counselor for free.

Even though Credit Card debt is unsecured which means Credit card companies cannot take much of your assets. Too much Credit Card debt can lower your credit score and hurt your interest rates.

Also check out the website helpwithmycredit.org operated by credit card companies to help consumers.

Finding the Good Credit Counseling Agency

2009-06-01T15:22:00.000-07:00

Most of the Credit Counseling Agencies are really out there to help the consumers who are overwhelmed with debt and could not handle themselves. However, there are some agencies who are setup to just make bucks and not to help the consumers. It is very important to find a good credit counseling agency from a bad one. With a bad credit counselor your debt problems can worsen. Here are some excellent resources to find a good one.

Ask these questions before you choose a Credit Counseling Agency

Are you licensed, federally approved and a tax-exempt credit counseling agency? (YES)
What services do I get? (Check this post for more info)
Can you send me a written copy of the agreement? (They can send you one)
What are the fee terms? (Should not go above 50$/month in fees)
Will I work with a single credit counselor or they change? (Work with one)
Are the counselors paid on commission or salary? (Not on commission)
Will they keep your information completely private? (Should be Yes)

Always remember these

If it sounds too good to be true then probably it is not true.
Choose a credit counseling agency near your area. Use this tool.
Check out the business reputation at Better Business Bureau.
Pay only if you are completely satisfied and comfortable working with them.

What to Do (And NOT to Do) when a Debt Collector Calls?

2009-05-05T16:48:00.000-07:00

Being contacted by a credit collector can be unnerving. The following advice will help you stay calm and avoid saying anything that could create more problems.

DO NOT Engage in casual conversation with a Debt Collector. (You may give the debt collector information that could be used against you)
DO NOT Answer any questions that you don't want to answer. (Never share personal or financial information)
DO Contact a Credit Counseling Agency .
DO Ask the debt collector to send you a written accounting of exactly how much you owe. (Ask them to itemize)
DO Dispute if you don't agree to the amount you owe the debt collector says.
DO Say that you don't have the money if you don't and tell the debt collector not to call you again.
DO Try to work out an affordable payment plan that you could feel comfortable.
DO Write down everything if a debt collector threatens you and is verbally abusive. (They are violating federal law with these kind of actions)
DO NOT ever agree to pay more than you can afford!

Print this out and keep next to your phone so you can refer to it when a collection agency calls.

Use the following resources to Manage your Debt

Have a list of all your debts
Have all the debt related paperworks
Find how much you can realistically afford to pay
A list of what you want from each of your creditors
A list of what you are willing to give up to get what you want
Find a trusted credit counseling agency near you. (A right Credit Counseling Agency can be a godsend when you are overwhelmed with debt and it is FREE).