Showing posts with label debts. Show all posts
Showing posts with label debts. Show all posts

Saturday, October 9, 2010

How To Avoid Celebrities Debt Follies?

The key to financial freedom is not to earn lots of money, else money machines like celebrities will never face bankruptcy. It is about controlling expenses!

In the latest example of celebrity excess, singer Toni Braxton has filed for bankruptcy and owes between $10 to $50 million. Her list of debtors includes AT&T, the Four Seasons, and Tiffany.

So why do celebrities fall on hard times financially? This is because of their unpredictable income expensive lifestyles, and enormous pressure from family and friends who want their money. We can avoid their spendthrift ways.

1. Control spending.

Celebrities love to spend money especially during their new-found financial success. They think their high earnings will continue, but in reality their careers are short. They actually need to spend modestly to make their money last.

2. Make a plan.

Make a plan and follow through when it comes to finances. You have to be prepared for the worst-case scenario, such as disability or sudden loss of income.

Plan a rough estimate of your career, income and lifespan. Next, live off that amount and the rest should be saved.

3. Learn to manage an unpredictable income.

While it's OK to splurge a little when a big chunk of income comes in, it's important to remember that you still have to pay 40% of it on income taxes.

And because income might go down in the future, setting money aside for rainy days is essential. This advice applies to anyone who sees their income dip and dive, including people who work in sales, freelance, or consulting fields.

4. Pay off debt as soon as you can.

Celebrities should avoid mortgages and buy homes that they can afford to pay for with cash, since they often don't know when their next paycheck is coming.

5. Surround yourself with people you trust.

Celebrities and noncelebrities alike need to make sure they trust the people who work for them, including personal finance advisers.

The worst thing is to leave your finances and bank accounts in the hands of a rogue adviser who charges exorbitant fees or misappropriate your money. You should read your own monthly statements and regularly check up on savings and retirement accounts.

6. Save for retirement.

During good times, people should put at least 8% of their income toward retirement accounts. That's in addition to maintaining an emergency fund of six to nine months' worth of expenses.

7. Just say no.

Don't ask for money from friends or distant relatives. Having a financial adviser can help to monitor your spending habits.

If you have lots of money but became a bankrupt, don't worry as following the tips above will help you to come back into solvency.

Wednesday, September 8, 2010

Don't Fall For 'Debt Elimination' Scams

Everybody loves short cuts, be it getting rich, losing weight or reducing debts. This weakness in our human psyche makes us vulnerable to scams.

In the case of debt elimination, a lot of people don't want to give up their extravagant lifestyle nor face up to the consequences of mounting debts. They prefer to believe in the wonders of debt elimination scams.

Actually, there are no quick fixes for debt elimination which boils down to earning more income, spending less and using the surplus to pay down debt. A drastic approach like a crash diet where you don't eat for days is not productive. You either go back to your old habits or risk damaging your health.

Some debt elimination scams require you to pay a big upfront fee for secrets on dealing with your creditors but most of them are fake.

It is best to exercise caution when there are offers too good to be true. After spending like maniacs for years, no way can you pay someone a simple fee and make all the debts disappear.

Ignore those claims and work on getting yourself out of debt the old-fashioned way. Review your income and expenses and look for ways to either increase the income or decrease the expenses until you can lighten your debt load.

Tuesday, June 8, 2010

The Debt Diet - Part 2

This summer debt diet that transformed thousands of families is BACK AGAIN! Top experts reveal a step-by-step action plan!

Here is part 2 of the debt diet...

Tuesday, May 25, 2010

Washington Bankrupting America?

A recent poll reveals that 74% of voters are extremely concerned about the current level of government spending and 58% feels it is unsustainable.

Is Washington bankrupting America? The public is clearly concerned.. and we are talking only about past spending…

The US government owes $106 trillion in future spending commitments, don't ask me where or how they are gonna get the funding..

The interest payment on debts are going to reach dizzying heights and raise the possibility of America defaulting on its debts.

Politicians and Americans will have to make tough choices about debt reduction. Increasing taxes to pay for government irresponsibility is not a solution.

Real spending reform is needed. Household spending has risen 40% in the last decade and the trend will continue in the next 10 years. Returning to the 1990s spending level would help to balance the budget and reduce debts.

[Bankrupting America]

Sunday, February 14, 2010

Don't Fall Prey To Predatory Lending

There are lots of people who prey on the poor - they bear gifts in your darkest moments but are actually piling on your woes.

Don't Fall Prey To Predatory Lending
I saw this graphic on (click to enlarge) which gave good examples of predatory lending. These companies make their profits by charging fees that seem reasonable but turn out to be insane.

Do you know payday loans can hit you with as much as 360% interest per year? No wonder it has been deemed as loan sharking in 13 states.

Rent-To-Own arrangements which can range from furniture, gadgets, housing, etc. may sound sensible (why not pay a bit more to take up equity) but the reality is that you end up paying about two times more than the item costs.

That is when you factor in the insurance, weekly payments, sales tax, etc. and if you can't afford to pay the loan, they are helpful enough to offer you payday loans with a 531% APR.

Last but not least, credit cards which claim to help people "re-establish" their credit. I too am flabbergasted by how some merchant credit card companies give you a $250 starting limit and almost whittled it down to zero with their hidden charges (program fee, annual fee, set-up fee, monthly service fee, over the limit fee, etc.)

Evey one of such schemes only serve to push you further into debts. The truth is there is no short cut to becoming debt-free. Clearing debts is a step-by-step process which require you to be disciplined, make sacrifices and live modestly.

If any company tell you that you can maintain the same lifestyle while getting your finances in order, that is bullsh*t and probably a scam.

Wednesday, January 6, 2010

Have You Cleared Your Holiday Debts?

Have You Cleared Your Holiday Debts?
Have you cleared your holiday debts yet? No, well, the blame game is pointless as the fact remains that you swiped your credit cards for your vacation and shopping. Now your finances in the new year sucks.

Assuming your holiday debt to be $1200, at 12% credit card interest, you have to pay about $100 per month for 13 months.

Do you really want to repay your moment of fun with so many months of hard-earned money? You’ll pay more in interest on the credit card than you will earn if your money is sitting in a bank.

Thus, the best thing is not to incur that debt and the second best option is to write a check to pay off the bill right away.

If you can't do any of the above, here are a couple of debt reduction strategies to implement:

1. Find a new credit card which offers 0% APR on balance transfers. You can save money from not letting the interest accrue while you make payments. Once you’ve got the new card, you should get rid of the old one.

2. Reduce exepnses. There shouldn’t be any unnecessary spending. That means no more dining out, parties, movies, shopping, etc., until the holiday debts have been paid.

3. Channel “extra” money toward the debt. But you say, where are you going to get extra money besides your montly salary?

Remember the rebate checks from your holiday purchases? How about a reimbursement check from last year’s Flexible Spending Account? Sales from selling extra gifts on eBay? Or money from any contests?

Put all these bits of “extra” money toward that credit card bill every now and then, and you will shorten the debt repayment period.

4. Use tax refunds for your holiday debts. You need to get organized with these tax documents and if possible, get an accountant.

Choose the direct deposit option for your refund and you’ll get your money weeks sooner. Once you receive your refund, apply it directly to credit card debt.

If you’re anticipating refunds on a regular basis, consider adjusting your tax withholdings so that your monthly paycheck is larger, and the government isn’t holding on to your money, collecting interest on it.

Put each payday increase into one of those high-interest bearing online bank accounts and earmark your savings for next year’s holiday spending.

By implementing these tactics, you’ll be amazed at how quickly you can eliminate your holiday debt and move on with your life. Just remember to plan ahead now for next holiday season, so that the debt monster doesn't rear its ugly head again.

Tuesday, December 15, 2009

Suze Orman's Advice: Pay With Cash

Suze Orman, a highly respected money guru, has recently called on Americans to start paying for purchases with cash.

She was heard saying on CNBC, "Let’s go back to the times when you literally paid cash for everything. That’s right. Cash. Stop using your credit cards altogether."

I am definitely in favor of Suze Orman's "Back to Cash" movement. It is high time we, as a nation, wean themselves off debt and live within our means.

In any case, credit card companies aren't looking out for its customers. They are adopting more aggressive tactics to boost their profits, with stricter credit-card legislation looming.

When it comes to raising interest rates, our credit scores and history of timely payments count for little. If you have low balances or periods of inactivity, your account could also be closed.

Since credit card companies are treating us like dirt, we might as well say goodbye to credit cards once and for all. Heck, just pay with cash. No more identity theft or hidden/unexpected fees to worry about.

The initial adjustment may be painful but once you start planning a household budget, your expenses will be easier to control.

Wednesday, December 2, 2009

Screw Back The Banks By Defaulting Strategically

"Homeowners should be walking away in droves. But they aren't. And it's not because the financial costs of foreclosure outweigh the benefits. One can have a good credit rating again--meaning above 660--within two years after a foreclosure."

That's the conclusion reached by a law professor who's written a paper about strategic default, which is when you elect to walk away from an underwater mortgage because you stand to lose more money trying to keep it than if you cut your losses immediately.

The problem is, lots of people think it's the wrong thing to do, because individuals are supposed to play by different rules than the companies they do business with.

Source: Consumerist

The government has shovelled loads of money the banks' way, boosting their record profits and now the executives are salivating at fat bonuses again.

As for the taxpayers, they are screwed big time as the government racked up billion dollars deficits each month (which has to be paid eventually). And for the millions of unemployed, seriously, Wall Street don't give a damn.

This law professor has written a great article about strategically defaulting our mortgages (of course, it is best to be prudent rather than defaulting on debts). Maybe it is time for homeowners to screw back the predatory bankers and mortgage firms.

Friday, September 11, 2009

Debtors Revolt Watch

This lady is leading an army of revolters into the line of fire against the banking system.

It is high time consumers take a stand and let the lenders sit up and take notice.

For how long should we endure predatory terms of financial institutions and allow them to take taxpayers' money on one hand while awarding fat bonuses amongst their cronies?

Enough of riding roughshod over consumers. What do you guys think?

Tuesday, September 8, 2009

Beware Of Debts And Excess Leverage

Beware Of Debts And Excess Leverage
Six months of stock market rally... holly shit! The bears (including me) have highlighted an impending drastic stock market correction for weeks but the stock market continues to defy gravity.

I know people are more confident when they see their investments doing well, regardless of the well-being of the real economy. However, such over-confidence can lead one to take on more debts than is prudent to finance purchases or investment.

To be sure, consumers and investors are not soley at fault. Banks, credit card companies and brokerages are eager to feed this frenzy by expanding our overdrafts, credit limit and margin accounts.

But excessive leverage is dangerous and will destroy our financial future. To get our finances to grow in a healthy manner, you must eliminate the weeds (debts and its associated interests cum fees) in our financial garden.

I believe many people realize the dire effects of debts, yet they willing become enslaved to financial institutions which offer credit cards and credit lines with low teaser rates and entice us to pursue extravagant lifestyles, way beyond our means.

Sometimes, I get really upset that our entitlement mentality, thanks to the media, politicians and unscrupulous lenders, has become so deeply entrenched that we believe we can always get what we desire right away, without paying for it.

Now isn't that naive? The banks and credit card companies are in business to make money, not to do charity work. Thus, all their easy money come with a heavy price to pay... eventually. There is no free lunch, period.

If we don't pay up, the only way is to kick the can down the road and burden the next generation with our reckless spending. The financial institutions are more than happy to let our debts snowball and to see us slog like hell to contribute to their profits in perpetuity.

To avoid the vicious debt ruthole, you must be disciplined in paying off debts as soon as possible. But you should not do it too aggressively such that your emergency fund is neglected. An emergency fund is crucial even as you keep track of current liabilities, so that your ability to make good on payments is not impaired even if you lose your job.

You should also get free credit reports and see whether there are any inaccuracies reported. If so, dispute the problem in writing and get it resolved. A drop in your credit score of just 50 points will cause your monthly payments to spike and even restrict your credit limit.

Next, examine your credit card and loan statements to see what interest rates you're paying. Do some comparison shopping for more attractive interest rates and then make a few phone calls to negotiate your existing rates.

If the phone calls are not fruitful, you can move your outstanding balances from higher interest cards to a lower interest card. Or pay off high interest credit cards with a lower interest loan.

These actions can save you hundreds or thousands of dollars per year, and only take a few minutes of your time to initiate. But you still get nowhere near eliminating your debts if you don't change your mindset and lifestyle.

Stop piling on more debts if you are serious about eliminating debts. You only dig a bigger hole whenever you charge new expenses to a card and accumulate your outstanding balances which cost you the most money in fees and interest.

I believe the the economy will still be in deflation for the short term, even though the Federal Reserve has been printing money furiously. And there is still a strong possibility that the economy will suffer a double dip and the credit crunch worsen in 2010.

But whatever happens, we can always cope with interest rate hikes or withdrawal of credit lines if we pare down our debts and get our emergency fund up and running.

Tuesday, July 28, 2009

Sit On Cash But Declutter Your Bank Accounts

Say goodbye to the gloom and doom. The sun is shining warmly, stocks are rising, Dow Jones crossed 9000 points and home price index is up for the 1st time in 3 years. Heck, President Obama might as well declare the recession is over.

Despite all the optimism, I am highly skeptical that this generational economic malaise has been swept away so quickly. I believe the stock market is in the throes of speculative fervour and we may yet see another drastic correction in the fall.

In this moment of exuberance, it is easy to get tempted by heady profits and join the herd. Fortunately, the cool wisdom of Warren Buffett comes in handy when our rationality is tested: "Be fearful when others are greedy and be greedy when others are fearful."

While investors are getting ahead of themselves and raking in the profits, my mantra remains that cash is king. The recession has transformed many Americans into squirrels (which is a good thing) and I hate to see our national resolve in saving money and eliminating debts washed away.

Sit On Cash But Declutter Your Bank Accounts
Saving money and bolstering our retirement nest is like tending a flower garden. You cannot be enthusiatic about the flowers for a few weeks and then neglecting them months later.

The flowers require vigilant care to survive, not to mention, thrive. There is so much to do consistently, from watering the plants, ensuring sufficient sunlight, getting rid of weeds and worms, etc. Our finances need similar attention to blossom and we will do well by sticking to the basics.

Declutter Your Bank Accounts

If you are like me, cash (or near cash items) will take up at least 50% of your portfolio. And with so much cash at stake, it is necessary to be orgainised.

The first step for easy organization and tracking of your cash is to evaluate your bank accounts. If you have multiple savings and checking accounts, money market fund, etc, you may find it easier and more manageable to consolidate these accounts.

In addition, there are cost savings if you combine accounts and reduce the fees charged by the banks. You can compare what fees each bank is charging and the benefits associated with having the account before you begin consolidating.

Before closing any account, make sure you have switched any automatic payments for bills to the accounts which you intend to keep, else you may be slapped with penalties for late payments.

You can further declutter your financial situation by setting up online automatic bill payments for recurring bills (except to mail checks to companies that don't accept online payments), and eliminating the need to receive bill statements in the mail.

When you go online, you reduce the need to use paper and stamps (which cost money), and you can balance your accounts easily too.

Taking the time to work out details and declutter our finances is a major step in keeping us on track for long term financial success. Lastly, whether the sun is shining outside or a storm is brewing, never forget to tend to our financial plan with the same discipline as a gardener.

Friday, July 3, 2009

No Mercy From Predatory Credit Card Companies

Predatory Credit Card Companies
The ink has barely dried on the credit card bill which President Obama signed in May and credit card companies are running amok with their predatory actions again.

It seems like they are going all out to squeeze water out of a rock, lest their profits are diminished from the changes which go into effect in the middle of 2010. And they have yet to devise ways or loopholes to circumvent the new rules or shift the goalposts. Thus, the anxiety of credit card companies is understandable.

Suze Orman pointed out correctly that credit card companies have an entire year to have their way with you. And nobody will hear you scream.

Ya right, we can't really expect Obama to amend the bill again especially when he already has so much on his platter, from taxes, financial reforms, war, health care, economy, etc.

The USA Today reports that "Most issuers have raised rates or fees for certain borrowers. In the latest round, Bank of America and Chase have increased, or are increasing, their maximum balance-transfer fees, from 3% to 4% and 5%, respectively."

"Chase is also expanding the definition of who could get hit with a penalty interest rate. Meanwhile, InfiBank is establishing a higher minimum APR -- the greater of 15.99% or 11.99% plus the prime rate -- on many cards. And Capital One and Citigroup continue to raise card rates for certain borrowers."

If you continue to roll over your credit card debts, it is time to exercise discipline and get your finances in order by whittling down the debts. The credit card companies are not known for being charitable and will pile on your misery at the moment when you need them most.

But in fairness, the blame cannot be placed soley at the doorstep of credit card companies. They're just doing their job, which happens to be screwing us for maximum profit so that they can take home fat bonuses.

We have to take some responsiblity for falling prey to their temptations. Our elected officials are also to blame. Instead of working towards the good of American voters, they are protecting these for-profit organizations every step of the way.

What do you guys think?

Monday, June 22, 2009

Tips To Pay Your Bills On Time

I have a friend who told me he is stressed out whenever he opens the mail box because it is swarmed with bills all the time.

I was quite surprised that this guy who gets his andrenaline rush from car racing and bungee jumping is freaked out by the monthly bills. From what I know, he is single, has a steady job and doesn't spend lavishly, so his finances should not be a concern.

The main reason turns out to be his disorganized lifestyle. He told me he is already tired after a hard day's work and has no energy to attend to the bills.

So whenever he brings his bills home, they are strewn around the house (some on the kitchen table, floor, dining room, bedroom, etc) and they get buried under subsequent newspapers and letters.

Not surprisingly, even when he remembers his bills, locating them is a chore and eat up more of his time and energy. Clearly, treasure hunting is not his favorite past-time so he ends up paying up the late bills, after being issued reminders and penalties.

I guess my friend isn't alone in this situation. There are many people who get antsy from their stack of bills and cannot motivate themselves to dig in and tackle them.

Tips To Pay Your Bills On Time
Well, avoidance is not going to help matters and you end up paying more money. Here are some tips to make bill-paying easier:

1. Process Bills Immediately

Don’t let your mail sit for more than a day. Go through all the mail and have a rubbish bin ready. Keep the letters from friends or relatives, if you want. As for junk mail, credit card offers, magazine subscriptions, the bin is there or you could recycle them. Finally, the bills - pay them right away.

2. Place Your Bills In A Designated Place

Sometimes, we have pressing matters to handle and do not have time to process the mails. That is ok. Just have a designated place for all your bills.

For me, it is on a shelf in the kitchen (easier to take out whenever I have family discussions on the budget). You have to ensure all the bills are kept properly for your future reference. A lost bill runs the risk of late fees and I don't like paying more than is necessary.

3. Designate A Time To Pay Bills

For the procastinating types, expecting them to process bills right away is a fantasy. But at the very least, you have to pay your bills once each week.

Just designate a time, weekend will be good. You can choose a Sunday night before sleeping, flip open the check book, write the checks, review your bank balance and pay the bills.

4. Prepay your bills

Since you are going to take effort and time to pay a bill, why not do it for two or three months in one shot?

The cost is about the same as paying month by month but if you are the forgetful type, you avoid the chances of missing a payment. When you prepay bills, I do assume you have the spare cash though and not living from paycheck to paycheck.

5. Set Up Automatic Payments and Pay Bills Online

Set up automatic payments and consoliate your bills whenever possible. Also, nearly every major utility and bank now offers the ability to pay your bills via the web. Some even offer small discounts for using this service! Online payment is more convenient too as it saves you the trouble of walking to the post office.

6. Reduce Unnecessary Bills

Do yourself a favor by terminating services or subscriptions you no longer desire. It is not only a waste of money. You don't have to deal with the bills.

7. Ask For Lower Rates

If you haven't done this for credit cards, now will be a good time to start. You can save a huge chunk of money simply by calling and asking for a better deal.

8. Paying Bills Immediately Is Fun

When I pay my bills right away, I get such a kick it is kind of fun. The main thing is that it is a load off my shoulder as I am paying off a debt and not beholden to anybody.

Friday, May 22, 2009

Put A Positive Spin On Debts

I know it is a terrible feeling to be in debts. Debts can cause many sleepless nights and even depression, when you feel like you can never repay all the money you owe. You may not be consciously thinking about the debt but it weighs on your mind and mood.

Put A Positive Spin On Debts

Debts may be overwhelming but who says you can't put a positive spin to the situation. Here are some tips for boosting your mood and having a smile.

1. Do Not Deprive Yourself Of Sleep

Many people are stressed out by debts and cannot sleep well. If you've been restless because of the money you owe, it's time to tell yourself to stop using your bedtime as your thinking time.

Your debt did not come about overnight and a quick-fix will not appear while counting sheep in your sleep. Learn to relax and think of positive thoughts at bedtime.

Once you catch forty winks, you will enjoy a brighter outlook in the morning (not to mention immense health benefits from sufficient sleep) and have more energy to tackle your debts.

2. Don't Dwell on the Debt

Debts are no laughing matter especially when creditors are banging down your door or threatening to foreclose your house.

But place it into perspective and you realize it is not the end of the world. Thinking about debt all day will not solve the problem, except to make you sick with stress and anxiety.

Just keep records of your debts so that you don't have to memorize them. You can free your mind up to think about earning more money.

3. Appreciate The Positives In Life

Even if you owe a lot of money, you can still be thankful. Don't let your stress over the debts cloud your ability to see the blessings you have in your life.

You have other assets which are priceless, like your family and friends. Focus on the positives in your life and you'll instantly improve your mood.

4. Seek Help From Community

You are not alone... millions of people around the world are in similar situations - facing more debt than they know how to repay.

There are non profit organizations and many helpful websites like this one which give you support and can help you make some progress towards becoming debt free. Take advantage of the resources available to you.

Thursday, April 23, 2009

Debate About Debt Versus Savings

Today's Money 911 features authors David Bach (Fight for your money), Jean Chatzky (The Difference) to answer viewers' questions ranging from the great debate about debt versus savings and negotiating your college’s financial aid package.

In addition, find out how your credit score is affected by thankless credit card companies that go around lowering your spending limits, raising interest rates, and closing accounts.

Watch it below:

Monday, December 15, 2008

Never Go Back To Your Debt Ways

Paying off debts is like an addict seeking rehabilitation. Once you have paid off all debts, never go back to your old ways, but you can stop living like a pauper.

If you have been saving and earning an extra $3,000 or more per month, when you are paid off, you will have a lot of extra cash on hand.

As long as you don’t need this for another expense, first stop your second job. For a short while, you should be able to handle the extra workload, but there is no reason to overload yourself and diminish the quality of your life for long periods of time.

If you think you can afford it and still be able to put a good amount of money aside to build an emergency fund and then save for retirement, start adding back in some treats such as cable. Most of all stop using credit cards and always spend less than you earn.

Friday, December 5, 2008

Debt Advice: Throw Everything You Can At Your Debts

If you are striving to achieve financial freedom but getting nowhere, I suggest you review your debts and start eradicating bad money habits first. Else, any personal financial planning will be futile.

The first step of debt reduction is to be organized and then make a plan or budget to eliminate your debt. Spend the next few months, year, or couple of years living on as little as you can until you are debt free.

Cut out any unnecessary expenses including cable, cell phone (or use a pay as you go phone), excessive eating and going out, etc. If you live in a house that is more than you need, rent out a room, or downgrade to something that will save you money.

Find a way to cut down on your grocery bill by using coupons and buying store brand. Another great way to speed up the debt reduction process is to get a part time job. Make as much extra money as you can. If it’s near the holidays, you are in luck because many department stores hire extra help for the holiday season.

If you can’t get a part time job, offer your skills to other people such as fixing things, baby-sitting, etc.

Throwing everything you can at your debts may sound extreme, but when you get it paid off, you will feel so much better. You will feel less stressed from money collectors harassing you in the middle of the night.

Don’t bother with debt consolidation, just pay off all the debts. Pay off the credit cards with the highest interest rate first. If you can, transfer your balances to the credit card with the lowest interest rate.

Sunday, November 23, 2008

Get Serious About Clearing Your Debts

Debts have permeated life in America so much that it is almost ridiculous. Mortgage brokers, car salesman, and credit card companies flood our mailbox every day with tempting offers. And the expansion of credit is what is causing so much of the economic woes today.

It is easy to fall into debts but clearing your debts is far from easy. It’s a shame that many Americans are debt laden(at last count, Americans have an average of 7-8 credit cards). Are such spending habits sustainable?

The hardships which arise from termination of credit lines and raising of credit card interest rates during this financial crisis drives home the fact that we should get serious, once and for all, about clearing our debts.

Credit card debts are the worst. It has the highest interest rates, aside from payday loans which you should never go near. A car loan is unnecessary too. Even if you get a good rate, you could have gone used or cheaper and skipped the loan. Save your money if you really want a brand new car.

Some debt is okay to have though, such as a mortgage. Unless you have your own business, this is really the only debt you should ever have. If you have good credit, you can put down a nice down-payment and have a low interest rate.

To clear your debts, it’s important to eradicate reckless money mistakes. Debt is a heavy burden, and the faster you pay it off, the better.

Wednesday, October 29, 2008

Pay Off Debts And Avoid Bankruptcy

With interest rates on mortgage, credit card, and auto loans rising, we have two choices. Hasten to pay off our debts or walk away, get sued and declare bankruptcy.

I’ve seen commercials on television trying to convince you that bankruptcy is the way to go. They try to give you the benefits of bankruptcy, for example, you just got to wait for a few years for the bad record to be washed out and you can improve your credit over time.

This is true, but it takes a very long time... about 7-10 years.

Loan consolidation is another way, but honestly, there is only one time-tested way which I recommend to get rid of your debt, minimize the interest you owe, and improve your credit score.

Pay off all your debts as soon as possible, especially outstanding balances on credit cards which can snowball very quickly.