How Getting Out of Debt Is Both Easier and Harder than Ever

The average American household has over $90,000 in total debt. If you are living with debt, you know what an uphill battle it can be to get out. Fortunately, there are a number of solutions and tools out there to help you along the way. 

However, scam artists also recognize the desperation of indebted consumers and are targeting individuals trying to settle their debts.

The FTC Shuts Down Several Scam Operations in Florida

Recently, the attorney general of Florida and the Federal Trade Commission (FTC) closed down numerous scam operations that were ripping off consumers. The eleven enterprises were controlled by three individuals. 

They were persuading people in debt to sign up for a program that would relieve them of thousands of dollars of credit card debt. To take part in the program, these consumers were told to send monthly payments to the debt companies, who would then make a deal with the credit card companies.

As you may have guessed, the debt settlement companies were not putting the payments toward the credit card debt. And, their scheme is not unique to Florida. This is common in just about every state. Thankfully, there are many other tools at your disposal that do not involve scams. Here are a few tips:

Work with an Authentic Debt Consolidation Agency

There are many reputable and legitimate debt settlement companies in existence that help consumers to find relief from debt without resorting to bankrupty. Many offer free consultations to help you decide if this approach is the most beneficial for your circumstances. 

With assistance, you will have a plan that allows you to work on reducing the debt, which makes it less overwhelming and provides peace of mind. 

Speak to Your Credit Card Company

Credit card companies want to work with you to help you pay off your debt, rather than selling your debt for pennies on the dollar to collection agencies. Often times, they will let you temporarily reduce your payments.

Talk to a Counselor

Your bank or credit union will be able to direct you to a credit counselor, or you can find a non-profit credit counselor through the National Association of Credit Counselors.

Try Settling

Do you have a collection agency hounding you for payment of your debt? We recommend saving up as much as you can, and each time they call, offer to settle for however much money you happen to have saved.

Collection agencies will often settle for as little as half of the total amount you owe. If they’re willing to settle, never give them access to your checking account. Instead, first get their agreement to settle in writing, then get a cashier’s check for the total amount. Afterwards, insist on a written document stating that the debt is settled.

Use the Power of the Latest Apps to Get out of Debt

The prevalence of massive consumer debt has naturally attracted the attention of tech firms. They have come to the rescue with a number of easy-to-use applications such as the Debt Manager app. 

It orders your debts from smallest to largest (or highest interest rate to lowest if you prefer). It also calculates how much total interest you will pay using a variety of repayment methods.

If free is more your speed, then you should consider the Debt Eliminator app. First, you enter your credit card debts, minimum payments, and APR. It then asks how much extra you can pay and advises you to pay the highest interest rate debt first. 

If you cannot pay extra, it provides a worksheet to help you trim excess spending. The best part about the app is how it pushes you to be proactive in getting out of debt.

If you do not mind really getting into the nitty-gritty and sharing your personal information, the free Ready for Zero app may work best for you. 

It asks for your social security number and personal questions that ensure you are who you say you are. And, it gives advice that is specifically tailored to your needs.

There are many resources out there that can help you to reduce debt and turn a negative situation into a positive one. The key is to start sooner rather than later.

How Credit Makes the World go Round

Wipe our Debt (Photo credit: Images_of_Money)

Way back before everyone carried little plastic cards in their wallets instead of cash, the saying was money makes the world go around; not so anymore. You and I are not the only ones who seemed to be enslaved by credit. The biggest user of debt is the US Government itself.

How it Works

Just about everybody is aware that our country is trillions of dollars in debt, but not everyone knows how our government keeps functioning under that debt load. Creating more money is not the answer. If our government creates too much money inflation runs rampant. Instead of paying four dollars at the market for a gallon of milk you end up paying 24 dollars instead. Our government keeps working because of their ability to borrow from other countries, primarily China and Japan. 

If not for the trillions of dollars borrowed from these two countries our country would indeed come to a complete halt. We borrow money by issuing US Treasury notes and bonds. China, Japan, and other countries buy these debt instruments for the interest we pay them every few months. When the bonds and notes mature they’re either rolled over into new Treasuries or we pay the principle amount back in cash. Most Treasury Securities mature every 5, 10, 20, or 30 years. In most cases our government strives to roll the debt over into new long term debt so they don’t have to come up with the cash to pay out.

The Cost of Bad Credit

Most people now days are familiar with their credit score and how it impacts your ability to borrow and the interest rate they receive. If you have poor credit the amount you are able to borrow suffers, and the interest rate you can borrow at rises. The same goes for our country. For many decades our countries credit rating has been the very best; AAA. That makes the US just about the safest country in the world to borrow from. Due to our current economic problems our country’s credit rating has suffered. 

Standard and Poor’s, one of the primary credit rating agencies in the world downgraded the United States debt from AAA to AA with a poor outlook. They have since changed the outlook to stable but have kept their rating at AA. So what does that mean for our government? In order to attract enough investors (like China and Japan) our government has to be willing to pay a higher interest rate due to the increased risk of borrowing from a country in financial and economic turmoil.

Just like the average citizen, as their credit score improves or disproves, the interest rate they are able to borrow at rises or falls. The amount of money you can borrow will also go up or down depending on your credit score.

What if You Can’t Borrow

If your credit score falls too low you lose the ability to borrow money at any rate because the risk is considered to be too great. If you can’t borrow what do you do when there is a financial emergency? Fortunately for most people there are finance companies that give payday loans, personal loans, and car title loans, to name a few. Those are all high interest rate ways to borrow money no matter how bad your credit may be. 

Unfortunately for our government it’s not so easy. It is vital to our country’s economy that our government is able to borrow what it needs to keep functioning and hopefully one day someone will come up with a way to significantly reduce our country’s debt.

Smith is a professional blogger that provides financial information on savings and loans. He writes for InstaLoan.com, a leading title loan lender.

Debtor Finance: What is it and What is it for?

Finance (Photo credit: Tax Credits)

Debtor finance is a very useful tool which may help you business develop, literally you business will get a loan against your outcome. You will be able to get the fast loans within 24-48 hours and those loans are designed for developing your working capital and they simplify your business process. 

Why is it so convenient?

Usually businesses are begun with the working capital and for getting the capital it is almost always necessary to get a credit to start your business out. The credit must be paid within 60-90 days. Debtor finance can help you with your working capital, literally to free it up, and with keeping your budget in line. Moreover, while appealing to the debtor finance a real estate security is not necessary like in conventional financing. 

The kinds of debtor finance

The debtor finance may be divided into two subcategories: confidential and disclosed. The first one means that your business finances are not notified to your client base. They make just payments for your company. The second one is about that the notification will be transferred to your clients where there will be an explanation that you have got a loan and in this case your customers will make their payments directly to the financier. 

Terms

The ordinary time line lasts 90 days. If you do not pay back within those 90 days the financier will recourse the invoice that is supposed to mean that in 90 days your company will get the credit liability again. There is an extra recourse period which lasts 120 days and during this period of time you will be able to gain more financial freedom. As it has been mentioned a real estate security is not required.

Who can obtain it?

There are no definite criteria for obtaining the debtor finance tool. Still the businesses that are connected with selling goods and services use those online loans no credit check more often. Moreover, you should have a strong client base for getting the debtor finance, nevertheless it does not depend on the credibility of your business but it does depend on the credibility of your clients. A strong and tight relationship with your clients is highly appreciated for being eligible for a debtor finance tool.