You're broke. You've got bills that amount to more than what you could earn in a year. Heck, it's even more than you could earn in a decade. You can't borrow from your parents, your relatives, your friends or your ex-partner. And your bank manager has personally written you a letter - sadly, it's not about the state of the weather but the state of your account. It's soooo like Becky in Shopaholic it's almost eerie. But alas, there will be no multi-millionaire named Luke to go dashing to your rescue. So what to do? Switch on the TV, of course. The nonsense pouring out from the boob tube would surely lessen the stress. And then ... something catches your eye. What's that? Oh my. Is that a sign from heaven?
Over the years, debt cosolidation has become a popular method to use to conquer those outstanding bills from credit card companies, student loans and so on. Originally, debt cosolidation started to boom with countless advertisements in the Internet but after a while, it also began to advertise in TV. Making itself a focus of attention in such a way was both a good thing and a bad thing for debt cosolidation companies.
Good because it made more and more people aware that debt cosolidation may be something they haven't considered to getting them out of the financial trouble they've found themselves in.
Bad because their aggressive marketing has made other people --- like the government --- aware that they exist. And so now, a lot of debt cosolidation companies have been targeted by a number of lawsuits over the years.
But first and foremost: what's debt cosolidation anyway? In a nutshell, debt cosolidation is adding up all your outstanding bills and bringing them to the debt cosolidation company. Then you have them talk with your creditors in giving you more time to pay off or lower the interest rates or the monthly payments. Debt consolidation companies are very careful to emphasize that they don't make your debts vanish, only tolerable and they help you to become financial worry-free, if there is such a state of being. Debt cosolidation is also now known as debt settlement and debt negotiation. Anyway, it all means the same thing.
So is it advisable to use debt cosolidation or is it a curse in disguise? It truly depends. If you try researching over the Internet, you'll surely come across articles that warn you against enlisting the help of a debt consolidation company because in the end, you'll be more financially bankrupt than you were before. But some articles say that debt cosolidation is a good thing because it's a method where you can solve all your problems in one swoop.
In the end, it's really up to you if you want to take a risk or not. If you do, then the first step you should take is to look for a debt consolidation company that you can truly trust. There are websites that list debt cosolidation companies that are worth trusting. You can also check the Better Business Bureau for their own list but some say that a good rating with the BBB basically amounts to nothing. But if you don't want to use debt cosolidation as a last resort, that's okay, because there are still other alternatives. You can talk personally with your creditors and assure them with your sincere desire to pay your loans off but requesting for a little more time. Sincerity always works. Then you can get counseling and enroll yourself under a financial fitness program or a therapy for those who are unable to control their spending.
Prioritizing Your Debt Payments
You have a stack of bills in front of you and you may not be able to pay them all. Which debts are the most important? Many people make the mistake of paying their credit cards before their other debts. I argue that credit cards fall very low on the list of debt priorities, especially if you have a mortgage and auto loan. Learn why your mortgage should top your list of debt obligations: How to Prioritize Your Debt Payments
Related Debt Management Reading:
Prioritizing Your Debt Payments originally appeared on About.com Credit / Debt Management on Monday, February 8th, 2010 at 08:00:54.
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...(more)Bill Me Later Faces Class Action Lawsuit
Bill Me Later, the online processor that lets you pay for purchases later, is facing a class-action lawsuit in California for skirting state interest and credit card fee laws. According to Business Journal, online message boards quote interest rates between 40% and 100%.
Forum poster HBSSLaw wants you to contact the law firm (Hagens Berman Sobol Shapiro) if you feel you've been overcharged interest from Bill Me Later. You can email billmelater@hbsslaw.com to give your story or to join the case.
More forum posts:
Bill Me Later Faces Class Action Lawsuit originally appeared on About.com Credit / Debt Management on Saturday, February 6th, 2010 at 08:00:21.
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...(more)Do Bank Overdrafts Affect Your Credit?
When I first opened a checking account, I consistently overdrafted because I didn't understand that my deposits were not immediately available for withdrawal. In fact, at that bank cash deposits made after 2 p.m. were not available until the next business day. Checks had to clear before they were available. So, a rush to the bank to cover a check or debit before it posted was in vain.
Those were the days of checks being returned for non-sufficient funds (NSF), which is a whole lot more expensive than overdraft protection because you're charged two NSF fees plus returned check fees from the merchant. And you still have to cover the amount of the original transaction. A $1.00 candy bar could end up costing more than $100. I think people who complain about overdraft protection are nuts. Please pay the transaction for me and charge me $36.
Some overdrafts are innocent, you thought you had enough money in your account. Others are part of chronic money mismanagement. Will those checking account slipups hurt your credit score? Not automatically, but they can eventually. Learn how bank overdrafts can affect your credit.
What else hurts your credit score?
Do Bank Overdrafts Affect Your Credit? originally appeared on About.com Credit / Debt Management on Friday, February 5th, 2010 at 08:00:17.
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...(more)How to Stop Living Paycheck to Paycheck
Payday is days away. You have no gas, little food, and no money. For some people, this only has to happen one time before they change their spending habits. For others, living paycheck to paycheck is a viciously uncomfortable way of life. But, it's something that can be changed in just a few steps. Learn what you can do to stop living paycheck to paycheck.
How to Stop Living Paycheck to Paycheck originally appeared on About.com Credit / Debt Management on Wednesday, February 3rd, 2010 at 08:00:07.
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...(more)Looking for an Apartment? Beware Credit Report Scams
This scam seems to have been around for at least a year, so if you've been looking for an apartment, you might have encountered it.
You've been looking for an apartment on Craigslist, as I recommend people do when they have bad credit. You find a listing that seems too good to be true. You send an inquiry and get a response back saying you can apply just send a copy of your credit report (or your credit score). The inquiry (or even the ad itself) includes a link to a place that you can get a free credit report. You order your credit report and never hear from the landlord again. Maybe the apartment's been filled. Or maybe there was no apartment. Weeks later you get a mysterious charge on your credit card statement related to the free credit report you ordered.
What's the scam? Read more...
Looking for an Apartment? Beware Credit Report Scams originally appeared on About.com Credit / Debt Management on Tuesday, February 2nd, 2010 at 03:11:21.
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