Why would you want to consolidate your debt?

Two reasons for consolidating debt.

There are two reasons most people look to consolidate their debt. The first, and probably most common reason is to lower payments. Debt consolidation usually spreads out debt payments from 3-5 years to 15 years or longer.

The other reason is to lower the cost of interest. By exchanging a 18% credit card debt for a 8% home equity loan, the borrower can save 10% worth of interest payments.

Other effects of debt consolidation.

A result of consolidating debts is that instead of 10 separate payments to 10 separate creditors, only one payment will be made to one creditor. One extra benefit of debt consolidation is the simplicity of only having one payment vs. the 10 payements. 9 fewer bills to read, 9 fewer checks to write and 9 fewer payments to mail (and hope they get there on time).

Debt consolidation loans and mortgages.

Types of debt consolidation loans.

The most common way to consolidate debts is a debt consolidation loan or a 2nd or 3rd mortgage that consolidates debts by borrowing against the equity in real estate (usually a personal home) and paying off debts. Debt consolidation financing has become a large part of the lending market in recent years.

Debt consolidation even with bad credit?

Many lenders even have options for consumers with bad credit. A debt consollidation loan even with bad credit is now common. Debt consolidation loans are even avaliable online. Several lenders and brokers advertise online debt consolidation loans.

Consolidating debt for tax savings?

Some even advertise debt consolidation mortgages as a way to save money on taxes by increasing your home interest deduction.

Do I have to own a home to get a debt consolidation loan?

A debt consolidation loan does not have to be a 2nd or 3rd mortgage or home equity loan. It can be a signature or personal loan. Signature or personal debt consolitation loans will usually carry a higher interest rate than consolidation loans based on real estate equity.

Disadvantages Of Debt Consolidation

Consolidation Loans Will Charge More Interest

There are some disadvantages to debt consolidation and consolidation loans. First is that although they may lower your payment, over the long run you will pay much more in interest than you would just by paying off your debts as normal. By extending your payments out for 15 years or longer, you can drastically reduce your monthly payment. But you will also pay nearly twice as much in interest.

Debt Consolidation Can Be Expensive

Also a debt consolidation mortgage loan will probably cost you something. You may not have to pay it out of your pocket, because the lender will be happy to loan you additional money to cover the costs of the loan. Also some "services" charge hefty fees for their debt consolidation services, whether they secure you a single loan or just make the payments for you. Remember, someone is always making money - even at many of the so called "non-profit" companies.

Don't Fool Yourself With Consolidating Debt

Some people consolidate their debts, get a lower payment and start right back on the payment-debt treadmill. "Now that my payment dropped from $500 to $200, I can afford $300 more per month in payments. Time to get me a new car!" - WRONG

You are just getting yourself into more debt and more trouble. Remember the original goal is get out of debt completely. Not just spend and aquire debt until you max out what you have to spend each month. Don't fall into the debt trap where a consolidation loan just leads you to more debt. Either you need steel-studded discipline or you may need to look into debt consolidation alternatives.

Information On Debt Consolidation - Alternatives?

So what are the alternatives to debt consolidation loans and mortgages?

Pay If Off - Duh!

OK, enough of the sarcasm. Really, you could just work on paying it off. If you can afford your current payment for the next few months, you should look into just paying your debt off rather than spending more money and taking the added risk of a debt consolidation loan.

What's the best way to pay it off?

The two best methods for quickly paying off your debt include windfalls and a debt reduction plan.

Repaying Debt With A WIndfall

When ever you receive money you were not expecting or counting on (not your regular pay) apply that money to your debt (even if it is a debt consolidation loan). You will never miss the money and you just bought yourself an 8%, 10%, 18% even a 25% investment. Its just like putting that money into the stock market and getting a 25% return!

How do you figure that?

Well if you have a credit card, card loan or store account that charges you anywhere from 8% to 25%, by paying off part of that debt, you just saved yourself from beign charged that much in interest. That is money you will not have to pay, you get to keep in your pocket. Maybe not today, but it makes that debt be paid off sooner and you will not have to pay that interest for another month or two.

So if the stock market, mutual funds or real estate scare you - invest in yourself first!

Debt Reduction Plan

A debt reduction plan is a written plan for how you will pay off all your debts. What order you will pay them off and how much to pay each month on each debt. It can also show you about when your debts will be completely paid off and when you will be debt free!

But creating a debt reduction plan can be complicate. Which debts do you pay off first? How do you figure out how much to pay each month? Just how long will this take?

A "Simple" Solution:

Simple Joe has a simple answer for you - Simple Joe's Debt Eraser -simple software for debt reduction and elimination.

Debt Eraser is easy to use. Just enter in your debt information, name of debt, amount, interest rate, current minimum payment and Debt Eraser does all the rest. You can print out a month by month debt reduction plan that tells you exactly how much to pay each month on each debt.

Debt Eraser's debt reduction plan uses the "snowball" method to help you quickly pay off your debts and save thousands of dollars on interest. You can even use it to repay longer term loans such as card loans or mortgages.

And once you have your written plan, its just a simple matter of reviewing your plan as you pay your bills. And before you know it you will be completely debt free.

But what if I slip up and get further into debt?

Just enter the new debt and print out a new plan. All your numbers will be automatically adjusted to accomodate your new debt. Or if you receive a windfall and apply it to one of your debts (your debt reduction plan will tell you which one) you can adjust the amount you owe on that debt and automatically see how much money you have just saved yourself in interest or how much sooner you will now have your debts paid off.

Its so easy to use! And only takes minues to enter your debts and print your debt reduction plan.

You can even download it to your computer and start using it just minutes after you purchase it for only $19.95. Yes only $19.95, much less that the cost of a debt consolidation loan and even cheaper than "debt management services".

Simple Joe's Debt Eraser lets you do-it-yourself and save your money and your pride. Use Debt Eraser from the comfort of your own home. No one needs to know about your debts. Keep your financial information private.

This is the same type of debt reduction plan most credit counselors will recommend. (Some have even purchased Debt Eraser to use for their clients - skip the middle-man and do-it-yourself!)

Debt Management and Debt Consolidation

When people need money and do not have sufficient funds, they take out loans. Sometimes, people owe multiple loans. It does not pose a problem as long as you make regular repayments. The problem arises when you miss out at your repayments. This happens when the interest burden is very high. Lenders keep knocking at your door for their money. It is very difficult to keep a track of all your outstanding loans. You do not know which lender is to be repaid and which is to be left out.

To come out of this situation, you will have to go for debt management. Debt management involves a number of things. First of all, you need to negotiate with your lenders regarding you inability to repay the loans. Some of them may understand your problem and offer you a solution to make loan repayment easy. They might even waive off some part of your loans. You can take the help of credit counseling agencies. These agencies negotiate with your lenders on your behalf and help you repay your loans.

Debt consolidation is another very effective way of managing your debt. It involves taking out a loan and replacing your existing loans with this new loan. The new loan is known as a debt consolidation loan. When you replace all your outstanding loans with a single loan, you are left with a single creditor. This helps you manage your debt. Another advantage of a debt consolidation is a low rate of interest. Debt consolidation loans usually have lower interest rates than the existing loans. This reduces the interest burden.

A personal loan can be used as a debt consolidation loan . Personal loans are usually unsecured and carry a high rate of interest. The interest rate should not be so high that it beats the very purpose of taking out a debt consolidation loan. A homeowner loan can also be used for the purpose of debt consolidation . Since such a loan is secured and carries a low rate of interest, it is ideal for debt consolidation.

If debt management and debt consolidation fail to help you, then you will have to file for bankruptcy. Bankruptcy discharges the borrower from all his debt so that he could start afresh. However, it leaves a bad impression on the credit score and the borrower will find it very difficult to obtain a fresh loan for many years

The author is a business writer specializing in finance and credit products and has written authoritative articles on the finance industry. He has done his masters in Business Administration and is currently assisting Shakespeare Finance as a finance specialist. for more information visit our site http://www.debt-consolidation-park.co.uk

Article Source: http://EzineArticles.com/?expert=Pranav.P_Das

Consolidating Debt: First Step Towards A Stress Free Life

Life is a road of ups and downs, you never know when bad times can come. With the increasing amount of demands and their increasing prices day by day you never get to know when you are drowned in debt. Debt stress can leave you bankrupt. Now, DEBT CONSOLIDATION and debt management come into the picture. Both debt consolidation and management provide valuable assistance. However, you need both for maximum results.

In spite of of how the debt cropped up, once the person accepts financial responsibility and commits to change, the road to a debt free life is possible.

Management of debts is very important. It helps you understand how to get a handle on your finances. While managing our debts we should first of all evaluate our current financial status, so that we can prepare a road map for our finances. Next strategy would be budgeting, so that sufficient finances can be allocated to your living expenses and your life remains on track.

Also, one must try not to increase the debt any more. You should curb your expenses in a healthy way so that your basic necessities are pulled off well. Consciously try to reduce expenditures. For example, when you leave the house, do you turn off your air conditioning or heating? You can also save by taking a sack lunch to work rather than eating out. If you're a smoker and gave up smoking, you can save a lot.

You'll find that small reductions in your expenditure will begin to add up. The more you are aware of where your money is going, the better you will be able to reduce unnecessary expenditures. Now, is the time to focus on debts, find out how you can pay off your creditors. For example, some people concentrate on paying off their most expensive debts first. It saves money in the long run. Once that is paid off, there is a huge relief in cash flow and stress.

Availing a debt consolidation loan, which gives the benefit of easy payment to a single creditor with a little interest rate is a very popular means of getting rid of your debts. It really doesn't matter how you consolidate your debts. The important point is that you have a focused plan that makes you feel good and improves your fiscal condition.

About The Author: The author is a business writer specializing in finance and credit products and has written authoritative articles on the finance industry. She had done her masters in Business Administration and is currently assisting Easy-Debt-Consolidation-Loan as a finance specialist.

For more information please visit http://www.easy-debt-consolidation-loan.co.uk

Article Source: http://EzineArticles.com/?expert=Arsha_Hanif

Bankruptcy Counseling

MMI has been approved by the Executive Office for U.S. Trustees to issue counseling certificates in compliance with the bankruptcy code.*

Money Management International has a team of trained counselors who will work one-on-one with you to create a detailed personal financial assessment. During the assessment, the counselor will work with you to analyze your income, expenses, assets and liabilities and provide the client with a true and accurate picture of your financial situation.

You will be taken through all of the components of a typical credit counseling session. Upon completion of the bankruptcy counseling session, you will be issued a certificate of participation. This certificate will allow you to proceed with the bankruptcy process. It is our desire to make this delivery process as smooth and efficient as possible.

New Bankruptcy Law
Bankruptcy Abuse Prevention and Consumer Protection Act

Bankruptcy is always a hot topic; perhaps never more than now. It’s hard not to think about the subject in light of the recently enacted legislation that makes it more difficult for some consumers to discharge their debts through bankruptcy. According to its proponents, the legislation will address the problem of consumers’ skyrocketing debt. Over the past decade, the number of Americans filing for bankruptcy has doubled and at least $40 billion in debt is now forgiven annually.

The “Bankruptcy Abuse Prevention and Consumer Protection Act of 2005” makes some sweeping changes to the former bankruptcy law. Impacting cases filed on or after October 17, 2005, the Act includes the development of a “means test.” The Trustee or any creditor can now bring a motion to dismiss a Chapter 7 bankruptcy if the debtor’s income is greater than the state median income. Certain debtors who meet a new standard would be shifted from a Chapter 7 bankruptcy to five-year repayment plan in Chapter 13.

The bill also includes two provisions mandating financial counseling and education: Before filing for bankruptcy, consumers would be required to have a briefing on the alternatives to bankruptcy; and before receiving a bankruptcy discharge a debtor would be required to complete “an instructional course concerning personal financial management.” These provisions were included to provide debtors in bankruptcy with the skills and tools needed to avoid future financial problems.

Other changes include:

In the absence of undue hardship, regardless of the nature of the lender, student loans are not able to be discharged. This covers loans from non-governmental and profit-making organizations.

Debts owed to a single creditor totaling more than $500 for luxury goods incurred within 90 days of filing are presumed non-dischargeable; cash advances of $750 within 70 days cannot be discharged.

Under the new Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, you can file for Chapter 7 only once every eight years.

Domestic support obligations now have the first priority in distribution. Within this new first priority, support owed to or recoverable by a spouse former spouse or child is given priority over support obligations that have been assigned or owed directly to a governmental unit.

Under Chapter 13 bankruptcy, a secured creditor can retain its lien on a vehicle until the payment of the entire debt, not just the secured portion, where the creditor holds a security interest in a motor vehicle purchased within 910 days of the filing.

A debtor may only exempt up to $125,000 of interest in a homestead that was acquired within the 1,215-day period prior to the filing. According to the American Bankruptcy Association, the calculation of that amount does not include any equity that has been rolled over during that period from one house to another within the same state.

The information provided should be understood to be a general discussion of the subject matter and does not constitute a legal opinion about your particular situation. For further information or advice, consult a qualified attorney.

* Approved to issue certificates in compliance with the Bankruptcy Code. Approval does not endorse or assure the quality of the Agency's services." EOUST regulations do not apply to residents of NC or AL.

Introducing Money Management

Introducing
Money Management International’s Bankruptcy Education Program
Confidential, Efficient, and Comprehensive
EOUST Approved*

Strong Operational Capacity
With a state-of-the-art Web site, www.crediteducation.org, and dedicated Centers for Financial Education available to provide in-person education seminars in 22 states, Money Management International (MMI) has an infrastructure that is built on quality and efficiency. The Bankruptcy Education Program is available to you by a variety of delivery methods. Telephone and online programs will be available at various times, including evenings a weekends to provide easy access to all program participants. In-person programs will be available in all the local markets in which we operate. To view all local markets or register for an in-person program, simply visit www.crediteducation.org.
We know it is important for you to receive your bankruptcy education and certificate of completion within a timely manner. With over 950 employees, MMI has built a strong operation which is focused on quality services and ease of access.

Quality Education Services
Money Management International is dedicated to serving you with professionalism. During your Bankruptcy Education Program, our trained educators will interact with you and other participants to ensure that everyone benefits from the program. The Education Bankruptcy Program is designed to be a comprehensive course that covers a variety of financial and budgeting topics.

During the program, our educators will share with you some of the keys to wise money management and credit use. You will discover simple steps for setting financial goals, calculating net worth, creating a budget, and building a savings plan. In addition, the program facilitator will share with you, how to obtain credit reports, establish or re-establish credit, dispute errors and protect yourself from identity theft. Each participant will receive four workbooks designed to use during and after the course for continued self-study.

Upon completion of the program, a certificate of participation will be issued. This certificate will allow you to proceed with the bankruptcy discharge process. It is our desire to make this delivery process as smooth and efficient as possible.

* Money Management International is approved to issue certificates evidencing completion of a personal financial management instructional course in compliance with the Bankruptcy Code. However, approval does not endorse or assure the quality of a Provider's services

How To Save Money On Groceries

Saving money on groceries doesn’t have to be hard work. Making just some small changes can net big rewards to your pocketbook. Simple changes in the way you plan and shop can help you reduce the amount your spending on groceries.

Planning

Preparing a weekly menu of what you would like to eat is the first step in effective grocery buying. You will want to list entrees as well as any side dishes, salads or deserts you are planning to prepare. This meal plan can be as simple as the chart below:

Day of the Week

Breakfast

Lunch

Dinner

Snack(s)

Monday

Cereal and Fruit

Sandwich, Chips, Apple

Meat Loaf, Mashed Potatoes, Grean Beans

Carrot Sticks

Tuesday

Wednesday

Thursday

Friday

Saturday

Sunday

Download a free menu planner by clicking here.

After you have your menus planned, make a list of ingredients you will need to prepare each meal. There is no right or wrong way to make a list. It is mainly a listing of all the foods you will need to cook the meals you have planned for the week. You may want to group them in the order they appear in the store or by category such as meats, fruits and vegetables, canned items, frozen foods, cleaning supplies and miscellaneous items.

Check out our free printable grocery list by clicking here.

Shopping Tips to Avoid Overspending

Avoid displays meant to tempt you.

Grocery stores spend quite a bit of time planning how to tempt you to impulse shop. You can avoid temptation by sticking to your list and closing your eyes to those tempting displays. Also, be aware that sometimes the best buys are displayed on lower and higher shelves. If a product is at eye-level, it may be more expensive than the items that are located just above and below it. Just remember, your mission is to look high and low for the best prices.

Don’t go to the store hungry.
To avoid overspending while at the grocery store, don’t go to the store hungry. If you are hungry, stop for a small snack first before starting to shop. The cost of the snack will be much less than the extras you would have purchased if you were starving!

Shop at off peak hours.
It is a good idea to schedule shopping at off peak times. If you have to be at the store during peak hours, then you will be in and out faster by having a list and a plan.

Shop alone.
When possible, shop alone. If you have to shop with children and family, help them help you. Assign your children price checking jobs. This will help them with their math skills and also distract them from checking out the candy, cookie and toy aisles. They can also be a big help in reaching those items on the bottom shelves. Use a trip to the store as an opportunity to help teach them how to be a savvy shopper.

Shop only once per week.
Try to make the adjustment to shopping just once per week. If you have planned well, you will have everything you need for the week. This will help reduce impulse shopping and should be a big cost saver. If you must go more than once per week, stick to your list.

Can I save money by shopping at multiple stores per week?
Some smart and energetic shoppers have found that by shopping multiple stores, they can save money. The most important aspect of their savings systems involves knowing what prices each store charges for common purchases. Then through that system they are able to identify a good sale price and stock up.

Knowing prices is the first step in saving. Sometimes the store brand is the cheapest price and sometimes coupons can help defray the cost of some items. You can find out most prices by analyzing your itemized grocery receipts. If you would like to know more about making a price book, check out the book called The Complete Tightwad Gazette by Amy Dacyczyn.

If you do not want to take the time to shop at multiple stores you can still save on groceries. Find a grocery store with good overall prices, and then take these additional steps to save money:

• Avoid purchasing convenience foods and empty calorie snack foods.
• Buy cheaper cuts of meat that can be cooked using a slow cooker method.
• Calculate the cost of meats by serving rather than per pound.
• Buy larger boxes of cereal. Look at the price per ounce.
• Consider buying whole chickens, vegetables, fruits, and cheese rather more processed versions. It is generally cheaper.
• Prevent food waste by purchasing only what your family can eat.

With a small amount of planning and a little discipline you can cut your overall food bill and reap the rewards of that extra money.