DEBT SETTLEMENT

The average household has more than $8,000 in credit card debt. Scary? Maybe you don’t think so, but to put it into perspective, an $8,000 balance at a rate of 18 percent interest (today’s average) will take more than 25 years to repay and cost more than $24,000 if you only make the minimum payment!

Is $8,000 too much? It depends; one good indicator is to look at your debt-to-income ratio. A debt-to-income ratio is a number, often expressed as a percentage, showing how much of your monthly income goes towards debt payments. These debt payments may include “necessary” debt such as your mortgage and student loans, and “unnecessary” debt such as credit cards and personal loans.

Finance is a topic that the average American doesn’t know a whole lot about. Sure many of us can create a simple budget or open a savings account, but when it comes to debt management or retirement planning, we’d probably be better off consulting a professional.

Unfortunately, the services offered by financial professionals don’t come cheap. A financial advisor or tax expert can charge several hundred dollars per hour. So what do you do when you need expert advice but can’t afford much more than a Google search? Here are a few ways you can get answers from a qualified person without going broke in the process:

Household finances are looking grim these days. 43 percent of American families spending more than they earn and carrying an average of $8,000 in credit card debt alone, according to MSN, which also reports personal bankruptcies have doubled in the past decade.

Debt Settlement Comes at a High Price

If you have debt mounting up and you desperately want to avoid bankruptcy then it may be a good idea to consider debt settlement; that is, if you know where to go. There are a number of ways to get help with debt settlement, but for you to utilize one, you may want to ask yourself, “Do I really need it?”

Before you consider to go through a debt settlement, three questions you must ask yourself are:

Before you think about signing on the dotted line with a debt settlement company, it’s important to understand just what debt settlement is and what it means if you agree to do it. To help you get a better understanding, let’s take a look at this brief guide to debt settlement. This way, you won’t agree to something you just don’t want to take part in.

Questions you need to ask yourself if you are considering to go through a debt settlement:

The crushing weight of debt you can’t afford to pay off can be unbearable. Anyone in this situation is desperate for help and likely to accept any offer that comes his way, even if the so-called help could do more harm than good. There are plenty of organizations offering debt relief, some even promising to eliminate most or all of what you owe. It sounds good; maybe a little too good. Some debt settlement companies deliver on their word, but it seems many more are just looking to rip you off. So how can you tell?

What is a Debt Settlement Company?

Has every credit card application you’ve filled out lately been rejected because of poor credit? Do you often leave stores empty handed because your card is denied at the register? Perhaps it’s time to put down the plastic and pick up a phone. Your debt can be managed, and you can do it yourself.

Dealing with creditors can be intimidating. In the past, Go Banking Rates has recommended numerous strategies for repairing debt and sometimes they have involved recruiting the services of a specialist. However, paying for debt relief assistance is not always the best route to take.

If you are currently in an unstable financial position, use your communication skills to negotiate with your creditors on lowering your debts and/or interest rates. Just making the effort to work with your lenders to reduce your debt will save yourself lots of stress.

Before calling your lenders review your budget to get an overview of your financial situation. See how much money you can actually afford to pay monthly without putting yourself in financial jeopardy. List out who you owe money to and prioritize your list by order of payment. Depending on your personal financial needs there are lenders whom you will choose to pay off first.

Once you have organized your information make that phone call. In your call  be sure to note the number of years you have been a customer, your history payments, and your current financial situation (including how much you can afford to pay monthly). By doing so and sticking to the facts – the representative or someone at the company may be able to help you out with your financial situation.

Many people rely on debt relief programs to help them manage bills or proceed with a bankruptcy filing; however, many of these programs aren’t as successful as advertised because of their structure.

Unfortunately, stringent guidelines dictate the process by which debt relief programs are told to help consumers manage bills. So while the intentions to assist consumers are good, their actions often make matters worse.

A Closer Look at Debt Relief Programs

It’s tough to find yourself drowning in debt, which is why many individuals decide to choose debt settlement as a way to resolve the issue. However, not everyone suggests debt settlement as a good solution. To determine if it’s right for you, take a closer look at what it is and how it works.

About Debt Settlement: