Helping You Avoid Life's Financial Mistakes

Bankruptcy Attorney Fees: What It REALLY Cost To File Bankruptcy

September 15, 2010 By 5 Comments

If you’ve been considering bankruptcy for any amount of time you may been considering what kind of cost might be associated along with going this route.  So in this article I am going to cover three cost you will have to pay when it comes to going bankrupt, the court cost, the bankruptcy attorney fees, and most importantly the emotional cost.

Court Fees

First you have the court cost.  This is the fee the courts collect in order to file the discharge paper work.  The fees depend also on the type of bankruptcy you are filing for.

Chapter 7 court fees run around $299 and Chapter 13 court fees will run around $274.  These are the only real fees you need to pay for bankruptcy, however with most people we need a lawyer to file these papers correctly and that’s were the attorney fees for bankruptcy come in.

Bankruptcy Attorneys Fees

The typical bankruptcy attorney fee can range from as little as $1000 to $2000 depending on the state that you live in.  For example, in Ohio the average bankruptcy attorney fees will be around $1400 and in California the typical fee will be around $2000.  It all depends on the state you live in.

It also depends on what you exactly assign your bankruptcy attorney to do.  For example you may not need your attorney to attend the section 341 meeting which is meeting where get together with your creditors and negotiate a payment plan.  However some states will not allow you to do this but if you can it could cut some of the cost.

To know for sure what you attorney is charging make sure you get everything in writing before you sign on the dotted line.

The Emotional Cost

Finally, you have the emotional cost involved.  This can actually be worse than the previous two fees combined.  The emotional cost of bankruptcy can be staggering, in fact when I was working in financial service I came across a client who just started the bankruptcy process and seen first hand how it had emotinally hurt them.

When I showed up at their house I could tell how much stress it was putting on them.  They had every credit card under the sun stacked full of debt, they had a couple of car loans, and a house that was mortgaged to the hilt.

This was causing a severe financial strain on them.  They were no longer the happy couple they once were and were now selling their home, their cars, and even worse getting a divorce all because they failed to see the signs of financial stress soon enough.

The cost emotionally for this couple was ten times the average bankruptcy attorney fees and court cost.  It was going to cost the break up of family. Is this all really worth it?

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Should I File Bankruptcy: 3 Questions You Should Ask Yourself First

September 13, 2010 By Leave a Comment

Filing for bankruptcy is not something you should consider lightly.  You may have been considering when should I file bankruptcy.  The answer to that question is not so easy because their is not a definite line that says if you’ve got this, this, and this you should file bankruptcy.

So in this article to help you out I have come up with three simple question to help you determine if bankruptcy is right for you.  If you can answer all three of them with a resounding yes, bankruptcy may just be for you.

Have Considered The Cause And Effects

How do I know if I should file for bankruptcy?  If bankruptcy sounds like the only simple solution think again.  A lot of people who consider bankruptcy tend to look at all the good things bankruptcywill do for them like eliminate the debt and give them a fresh new start but what you also need to consider is that every action with bankruptcy can also have a negative reaction.

For example, once you file for bankruptcy your credit is going to take a big hit.  In fact you won’t be able to qualify for a new home loan, or any other loan for that fact.  On top of that most land lords are checking credit reports so it could have a huge effect on where you live and also the type of job you get as well since many employers are now checking credit reports these days as well.

If your not ready to face those types of challenges that lay ahead, bankruptcy may not be the answer for you.

Have You Tried All Personal Options

The next thing you need to consider is all personal options.  If you have to many debts you may want to try things like having a yard sale to sell the things you don’t need.  Start by digging through your old closet, garage or attic.  Things like motercycles, snowmobiles, and ATV’s should be sold.

On top of that if you have two cars you may want to consider selling one of your carsand using public tranportation or even riding a bike if live close enough to your job.

Third, you may even have to consider selling you home and downsizing.  A recent blogger I know recently did this.  He sold his home and downsized to something that fit their budget better.  If you could downsize to a home that was half the payment it could help out a bunch.

Finally, the last option you could consider is earning a few buck on the side by starting your own business.  I know this may not appeal to everyone but consider all of the options on the internet these days.

Sites like Textbroker are constantly looking for people write articles for people and can pay well if put some time into it.  Another option is to consider putting up your own website and put some advertising on it like Google Adsense.  Putting up a targeted niche website could earn you an extra $300 to $500 a month and keep you from falling into bankruptcy.  Check out the Keyword Academy if you would like to learn more about this option.

In the end you have to think like a minimalist.  Stay away from spending money on unnecessary things and buy only what you need.  If you have not considered any of these options you may need to rethink your decision your about to consider before going through bankruptcy.

Have You Ask For Help

Finally, have you asked for help, and I don’t mean a bankruptcy attorney either.  The first place you should look is at the self help options like Dave Ramsey Baby Step Plan.  This is a proven self system that has helped hundreds of thousands of people get out of debt and avoid bankruptcy all on their own.  To learn more check out the Dave Ramsey Baby Steps review I did.

However sometimes all you need is some real one on one help and for this you should consider credit counseling from the National Foundation of Credit Counselors.  This a group of nonprofit credit counselors that will work with you to put a payment plan in place, set up a budget, and keep you focused on helping you get debt free.

If you have not considered any of these options you may want to rethink why you want to consider bankruptcy.  When should I file for bankruptcy should be the last thing on your mind if you haven’t fully considered all three questions I’ve asked you.

So, should I file bankruptcy?

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Life After Bankruptcy: 3 Things That Could Change After You File

August 30, 2010 By 8 Comments


Today their are plenty of bankruptcy attorneys posting ads all over TV looking to give you the so called easy way out of your debts but is it.  Before you can consider ever reason bankruptcy will solve your problems, you also need to consider what is life after bankruptcy like?

In this article I’m going to cover three things that could change you life after filing bankruptcy and give you several question you think about before you consider the big “B.”

Loans and Credit

The first thing that will change in life after bankruptcy discharge is the availability of loans and credit.  In most cases your loans will be either liquidated or put into a payment plan and paid off over time.

Your credit score will be lowered dramatically with it now bearing the scar of bankruptcy.  In fact you will not be able to get any type of loan for at least a couple of years.

The average bankruptcy will last on your credit report for a minimum of 7 to 10 years.  This means no more credit cards, mortgages, car loans, or any other loans for that fact.  Your life will literally come to a stand still as credit and loans will dry up like a dessert.

You will have to rely on cash only to survive.  No more quick and easy credit cards to pay for dinner or a night out on the town.  You will have to live a slimmed down lifestyle that will require you to have a strong will and a ton of patance.

Do you have the will?

Housing

The next thing that may change for you is where you live.  If you are filing a chapter 7 bankruptcy you may lose your home, however with a chapter 13 bankruptcy they may be able to impose a homestead exemption to protect your home from being lost. However if your home has a lot equity in it they may likely sell your home in order to cover a portion of your debts.

The problem is life after bankruptcy chapter 7 and life after bankruptcy chapter 13 can effect where you may end up living at.  As in the last section I talked about how your credit will be ruined once you file bankruptcy and receive your discharge papers.  No lender in their right mind will give you a loan then.

This may force you find an apartment to rent.  However the problem here is that most apartment owners are now looking at peoples credit scores as a way to qualify renters.  If they see that you have a bad credit score and that you have filed for bankruptcy they be less willing to rent the apartment to you.

To make things worse you may to down grade the type of neighborhood you will live in altogether.   In fact you may have to move to a neighborhood that has more crime, violence, drugs, and accepts section 8 housing.  On top of that they may not have as high of quality schools which means this could have a huge effect on your child’s education.

Is this what you want for your family?

Your Job

Third, you need to consider how this could effect your career.   If you’re in between jobs right or recently laid off this could effect where you will get your next job.

Employers are increasing checking potential employees credit reports as a means of qualifying them.  The reason they are doing this is because they want to know how they handle their finances, but also because a lot of companies are starting to get away from the practice of asking for references.

The reason companies are moving away from this practice is because of the legal liabilities involved.  So instead they will check their credit report to see how they handle their money.

This could potentially limit you to getting that dream job you have always wanted.  Instead you could end working at a dead end job that is a lot less desirable.  On top of that your pay will decrease and you will make less money all as a result of filing for bankruptcy.

Is this what you want to do to your career?

In Closing…

I hope this article has brought up a lot of interesting questions for you to consider.  In the end it could mean the difference between you living the life you’ve always wanted to something that is not.  I hope this article on life after bankruptcy will help you see that bankruptcy is something you should not consider lightly.

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How To File For Bankruptcy: The 8 Step Process

August 26, 2010 By 6 Comments


If your considering bankruptcy as an option to rid yourself of the piles of debt you have incurred over the years you may be wondering how the bankruptcy process works and how long it will take?  In this article I will do just that, walk you through the eight steps of how to file for bankruptcy.

Attend Credit Counseling

The first thing you will have to do before you can file any paperwork is sit down with a credit counselor for a one on one meeting to discuss your situation.  Under the current bankruptcy laws you are required to see a credit counselor to if bankruptcy is truly the right answer for you.
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In order to proceed forward with the bankruptcy process the credit counselor with have to sign off that you have gone through the credit counseling process and that you can file for bankruptcy.

Meet With Your Attorneys

The next step in the process is to set up a meeting with your attorney to start the initial paperwork process, and draft the provisions you plan to include into the bankruptcy judgment.  The best part about this meeting is that the initial meeting is a lot of time free of charge.

Provide Proof

Third, the next thing you will need to do is provide proof of income from the previous 6 months from the place of your employment.  This will do a few things for you, first it will show the attorneys that your income in nonsufficient and will not be able to cover the debts and expenses at hand.

This will also help determine what type of bankruptcy you will be able file under.  If your income is low enough you may be able to file for a chapter 7 which will liquidate all of your debts.  However if you don’t qualify for chapter 7 you will still be able to qualify for a chapter 13.

With a chapter 13 bankruptcy they will be able to liquidate some debts by working with your creditors and setting up payment plans to pay off a portion of the debt.

Declare Safe Assets

Next, you will have to declare assets that you don’t want liquidated by the bankruptcy.  Things that you will be able to have exempted from bankruptcy are your home, often known as the homestead exemption, and your car, which is known as the automobile exemption.

However if your home has a substantial amount of equity in it,they may force your  to sell your home in order to use the equity to pay for a portion of the debt.

You may be able to keep other things like a few pieces of jewelry, books, and home furnishings.  However any luxury items that you have will be liquidated.  Finally, their are a few things that can not be liquidate like pension plans, 401k plans, IRA’s, Roth IRA’s, and even insurance policies that have a cash value.

File Paperwork With the Courts

Fifth, once you have the exemptions in place and paperwork properly filled out you will be able to file with the courts.  However you should know that their will be a fee of $299 to do this when filing a chapter 7 bankruptcy.

When your going through the process of how to file for chapter 7 bankruptcy you may also incur other fees like attorney fees.  This can be expensive so make sure you ask them about their cost up front so you don’t get hit with a huge bill at the end.

Meet With Bankruptcy Trustee.

In the next step on how to file bankruptcy you will need to meet with the bankruptcy trustee to discuss what their duties will be.  A bankruptcy trustees job is to oversee the process between the debtor and the creditors.

He will hold meeting with both parties and see that everything is done in the way that the bankruptcy filings are written.  This will include overseeing the transfer of property to be sold if it has to be, handling the money on items that are liquidated, and taking any complaints that the debtor or creditors may have.

Attend Financial Management Classes

As one of the final steps to completing the bankruptcy process you will also have to attend financial management classes.  This only makes sense because if you are filing for bankruptcy and you have not learned your lesson you may soon be back in the same spot again.

If you want to know how to file for bankruptcy the right way so you don’t have to do it again you will complete these classes to learn from your mistakes.  This may be a hard thing to do but go into these classes open minded knowing you will be better off in the end.

Obtain Final Discharge

Finally, the last step on how to file for bankruptcy yourself is to obtain the final discharge paperwork.  This paperwork relieves the debtor from anymore legal obligation to paying a creditor.

However, one tip you should know is that some creditors and collection agencies will try to trick you into getting you to pay by calling you back at some point down the road. Whatever you do don’t do it.  By paying the creditor or collection agency you will then be legally responsible for the debt that is owed.

As a final thought if all the steps I have covered in this article seem like to much just slow down and take them one at a time.  The actually bankruptcy process will take anywhere from 3 to 6 months or longer to complete.  Each state also have different ways of handling these processes.  The above article is generalization of what will happen.

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File Bankruptcy Online: A Legal Zoom Bankruptcy Review

August 25, 2010 By 3 Comments


Are you looking for an easy way to get started on the bankruptcy process but don’t know where and how to get started.  In this article I am going to show you how to file bankruptcy online with a well known company called Legal Zoom.

Getting Started

Getting started with your online bankruptcy filing is actually very simple and with Legal Zoom they make it very easy to get up and running.  Now I should mention before you get started that you should also know just because you are going to file for bankruptcy online does not mean you will automatically be accepted.

To be fully excepted, a bankruptcy attorney will have to review your situation and qualify you.  The great thing about Legal Zoom is that they work with qualified attorneys all over the country and even in your area, and the best part is they will do it all for one flat fee through Legal Zoom.

Check The Pricing

The next thing you will have to do is check the pricing in your state.  To do this go to legalzoom.com and scroll down the left side and look for the bankruptcy link.  This will direct you to the bankruptcy page.

check_pricing

Next click on the check pricing tab.  In this section you will be able to see what kind of fees you will have to pay in order to file bankruptcy in your current state.  For example in the state of Ohio it will run you around $1400.

Now this does not include court filing fees which will run you another $299 for a chapter 7 bankruptcy.  However this is very reasonable since filing in some states with the traditional method can be very expensive.  If you decide instead to file for a chapter 13 bankruptcy you can as well but the fees may vary.

Complete The 3 Step Process

Once you have agreed on the price you will be able to get started by creating an account and filling out an online questionnaire.   This questionnaire will be a starting point for your attorney to help them understand you situation.

This questionnaire will contain various questions about your current financial situation and what kind of assets you have.  Once all the questions have been answered a meeting will be set up between you and your professional attorney.  The initial consultation will be free of charge.

Finally, if you qualify and you authorize your attorney to start they prepare the necessary documents as needed.  After the bankruptcy filing is finished you will receive a notice of discharge to complete the process.

A Final Thought…

The process of filing bankruptcy online is very simple but you should know it will take anywhere from three to six months to complete the entire process itself.  If you would like to learn more about how the bankruptcy process works you can check out Legal Zoom here.

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Debt Settlement Attorney: How They Can Help You

June 18, 2010 By 6 Comments


At some point and time you may be in debt.  You might have tried debt counseling, consolidating your debt into your home loan, and maybe even considered bankruptcy.

If your in debt and have consider all other the other options it may be time for you to look at getting some real professional help.  In this article I’m going to talk about how a debt settlement attorney can help you get out of debt.

What A Debt Settlement Attorney Can Do

An attorney based debt settlement business works in much the same most debt counseling firms do except they are much more aggressive.  The reason this can be more beneficial to you is that they will work to negotiate on your behalf to cut done interest and principle payments.

For example if you want to consider negotiating a debt settlement you can, however they also deal with bankruptcies, and can even look through your credit reports to help you clear up mistakes on your credit history.

On top of that they can negotiate your interest rates with creditors, help you do a debt refinance to cut down high interest rates and help improve credit, negotiate late fees,  and even negotiate your monthly payments.  In most cases these companies can get you out of debt in half the time.

Why You Should Consider This Option

First off, a debt settlement attorney network will have the knowledge to talk to your creditors that you just may not have.  They also know that creditors a lot times are willing to cut down at a minimum the interest on a debt to at least get something back in return.

Second, an attorney of debt settlement can get you out of debt in half the time.  Cutting out penalties and extra fees can go a long way to getting you out of debt faster.  On top of that they can also work with creditors to eliminate a portion of your principle payments as well.

Why You Shouldn’t Consider This Option

When I wrote this article I thought it would only be right if I would give a few reasons why I don’t like this option. First, one of the huge down sides to this is that it could mess up your credit score.

When debt is paid to your creditor it is reported to the credit bureaus in a certain way.  First it can be reported as paid in full, which is the best option, or it can be paid as agreed or pay for delete.  The problem with the last two options is that hurt your credit severally if it ends up on your report.

How Do Debt Settlement Attorneys Cost

According to the Oak View Law Group fees can range a lot of different ways.  For example if you would like them to negotiate your interest rates and principle payments with creditors you can expect to pay around $100 a creditor plus a $50 monthly fee to handle transactions.

However, as with most debt companies the more debt you put into the program the higher the fee can be.  For example with the Oak View Law Group if you have over $10,000 your fee will jump from $100 to 5% of the total amount of debt you have. So if you would have $30,000 of credit card debt it would cost you $$1500.

Is A Debt Settlement Attorney For You

The first thing you need to know if a debt settlement attorney is for is what kind of debt your have.  In most cases they will only work with unsecured debt like medical bills, department store cards, and credit cards.  Secured debt like you mortgage or car loan will not be accepted into a debt settlement program.

You also need to consider your current financial situation.  If your facing a hardship right now like a medical injury or loss of a job you will be more pron to be excepted.  However if you are not facing a hardship and are able to make payments you may be able to get out of debt yourself.  If you would like to learn more about this check out my debt plans section.

On a final note be carefully with who you hire to help you get out of debt.  Some companies are only out to rip you off so they should be accredited with the Better Business Bureau.

Chris

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How To Get Out Of Tax Debt Yourself

June 16, 2010 By 3 Comments

irs1Being in debt with with creditors and collection agencies is one thing but when you it comes to owing the government on a past tax debt they will do whatever it takes to get their money back.  Even if that means going into your personal bank account and taking it from you without your consent, they will.

In this article I’m going to show some simple steps you can do to get yourself back on track with your finances and get you the tax debt relief you need.

Getting Started

To get started you first need to decide if you can really handle taking care of your tax debts yourself or if you’ll have to bring in some real help.  If you have $10,000 or less of tax debt you’ll probably be fine tackling IRS tax debt relief yourself, however if you have more than this you may want to consider asking for the help of a CPA or a tax attorney.  These are the only people who are certified to help you with your taxes.

Next you need to think about your old tax returns.  The reason I’m saying this is you may be able to go back to your old returns and see if you could have qualified for some past deductions.  For example  maybe you bought a new home in that time and could have qualified for the $8,000 home buyers tax credit.  To do this though you will have to refile and amend you taxes which will require the help of a professional.

Third, contact the IRS and talk to them about getting a payment plan in place to pay off the debt.  If you don’t do this it will force the IRS to use more brutal actions like garnishing your wages.  Doing this will also damage your credit history as well, and as long as you don’t pay them you will continue to have a black mark on your record for not paying.

Payment Strategies

So now that we’ve considered all the steps in the previous section we need to look at what type of payment strategy will work best for you.  The first option to consider is an installment loan.  This is a monthly payment plan the IRS will set up for you to pay them back.  This is also the most typical plan people will get started in.

Now you might be saying what if I don’t have the money to pay back the IRS right now?  In that case you might have to consider one of the following options.  First, you cam ask for a no collection request were the IRS won’t collect on your tax debt for a year.  However to get this you may have to be facing a hardship of some kind.

You could offer a compromise were you settle your tax debts with the government for less than you owe, and either pay them through a short term or long term monthly payment plan or a lump sum payment, but again you must be facing a hardship.

Finally, you could consider filing bankruptcy but the guidelines here are very strict and must be followed very closely in order to be accepted.

What You Should Do Now

Finally, now that we know how to get started and what kind of payment strategies are avaliable to you it’s time to get started.  To do this get in touch with the IRS now.  I should also mention their is no tax debt help formula that will make all of this easy for you but tackling the issues at hand head on.

Chris

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How To Set Up A Debt Elimination Plan

June 10, 2010 By 6 Comments

With so many different methods of how to eliminate debt these days it can seem like a tough task getting started and following through with a plan that will actually get you out of debt.

In this article I’m going to cover a simple debt elimination plan that will have you on your way to getting debt free in no time at all, and the best part about this option to eliminate debt plan is that it’s all free.

Clean Up Your Budget

The first thing you need to do is clean up you budget or if you don’t have one get started now.  A budget will help you get things in order and let you know how much money you are spending each and every month and how much you are saving.

What you are really looking for is how much money you actually have left over at the end of the month.  Having an extra $100 set aside for your debt elimination plans is all you need to get started.  Although if you don’t have an extra $100 you may have to eliminate some things from your budget or even get a part time job to help out.

Finally, if you are looking for a good budget worksheet check out this form right here, it’s the one I use and it’s free.

Get Your Debt Together

Next you need to get all of your debts in order.  To do this grab all of your debts now.  The first thing we need to do is put all of your debts in order, so pull out a blank sheet of paper and list all you debts from the lowest balance to the highest balance.

When you have this done your mortgage should be listed as the last debt to be paid off and something like a credit card should be the first thing you pay off.  The reason for this is because I want you to see results quickly by paying of the debt with the lowest balance.

Eliminate The Debt

Now before we start eliminating the debt I should mention one more thing.  Pay just the minimum payments on all of your debts, including your credit cards.  The reason for this is because we want to take all of the available cash we have plus the hundred dollars we set aside in the beginning of this article and start applying it to the first debt with the lowest balance on the list.

If the first debt is only a couple hundred bucks you should have it paid off in two or three months.  Once that debt is paid in full move on to the next debt except you will want to apply all the extra money you were paying on the first debt to the second debt now plus the minimum payment you were making on that debt originally.

Keep doing this until all of your debts are paid in full.  This plan make take a little time to get started but once your rolling you should have a lot of your debt paid off in three years or less.

Final Thoughts…

One final thought I should add when setting up your plan is that once you pay off a debt it is very important that you don’t accumulate anymore debt.  For example if you have credit card paid in full don’t use it anymore.  If this is big problem for you, you may have to cut up the card completely.

Also once you are done with the plan you should take all of the money you were paying towards your debt and build up a 6 month emergency fund.  This will prevent you from slipping back into debt and living paycheck to paycheck again.

Lastly, if your looking more info on the debt elimination plan I use check out my Debt Plans section.

Chris

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Debt Relief Help: Who Can You Trust

May 20, 2010 By 6 Comments

Looking for debt relief help these days is pretty tough.  With so many scammers and ripoff businesses claiming to help you get out of debt around the web it’s pretty hard to know who you can trust and who you can’t.

In this article I’m going to identify several groups of people and places that you shouldn’t go to for debt relief help.  At the same time I’m also going to identify a few people and places that will help you on the road to debt freedom.

Friends & Family

The first group of people you shouldn’t be taking advice from about getting out of debt is close friends and family.  This may seem odd that I say this but let me explain why.

The problem with taking advice from family and friends is a lot of times they’ve never gone through the situation you are going through right now.  In fact they  may even be up to their eyeballs in debt as well.  This is kind of like trusting a bold barber to cut your hair.

I also don’t recommend taking money or giving money out to other family members when it comes to getting out of debt.  I’ve found out from a personal experience what this can be like.

I once lent my oldest brother five grand to pay off some bills and he promised me he would pay me back in couple months.  Well one month turned into two months and two months turned into four months and three years later after continually haggling with himI finally got my money back.

Cash Advance Businesses

The next place you should never look for debt relief help is cash advance businesses.  These places will cost you an arm and a leg if you use them.

These typical businesses will usually charge you a $15 fee and will lend you a few hundred dollars for a couple of weeks.  That fee isn’t much but what the cash advance stores are counting on is that you will get behind on your payments.  This will cause them to tack an interest penalty onto your debt.

In some states the rates can go as high as 800%, however some states like Ohio and Arizona have put laws into place that only allow these companies to charge up to 30% interest.

However I should mention just because some states have lower interest rates doesn’t make it any better.  In a worst case scenario you could end up continuously borrowing money from these places in order to survive, which could end up creating more debt than you started with.

Debt Relief Companies

The final place you should avoid is debt relief companies.  A lot of times these companies will make things look almost to good and almost to easy to get out of debt.

The typical offer will claim to get you out of debt within 3 to 4 years and you will only have to pay back half of the money you owe.  They do this by negotiating with your creditors to cut down your balance owed.

Doing this can have some huge effects on your credit score.  On top of that the cost to be in such a program can be very costly.  The average cost to get in a debt negotiation plan is around 17% of the total amount of debt that gets excepted into the plan.

To illustrate my point if you had $35,000 of debt it would cost you $5950 to pay off that debt.  However they don’t typically collect that fee all at once but instead though monthly payments.

Who Can You Trust

When it comes to getting out of debt their are only a few people who give you real help with debt relief.  First off you have the national foundation for credit counselors.  This is non profit organization that works with people on a one on one basis to help them pay back all of the debt that they owe.

The next debt relief option you have is Dave Ramsey who is probably the king of helping people get out of debt.  His plan has helped thousands of people realize that being in debt doesn’t have to be a lifestyle.  If you would like to learn more about this option you can read my review on Dave Ramseys Baby Steps Plan here.

Finally, of all the options I have a real free debt relief help for you.  If you check out my debt plans page you’ll find helpful free spreadsheets that will allow you setup your own debt plan and help you get on the road to debt relief.

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The 5 Best Debt Relief Programs

April 24, 2010 By 7 Comments

Are you searching for a debt relief program?  A lot of people are these days, in fact you may be spending a lot of time researching and comparing who really has the best debt relief program.

So in this article I hope to save you a ton of time and research and show you what the best debt relief programs are. Of course these are only my picks so if you have one that you believe is a better fit by all means share it with us in the comments below.

Debtmerica Relief

Fees: Debtmerica’s typical fees run 17% of the total amount of debt that is placed into the program.

Programs Offered: They offer one main program called the Debt Resolution Program. Debtmerica was founded in 2002 and is listed in Inc. Magazines Top 5000 business.  Along with this program the typical candidate is someone who has at least $10,000 of unsecured debt or more.  To be accepted into this program you must be facing some sort of financial hardship now or in the near future.  If you would like to learn more about this company you can read my review here.

dccDebt Consolidation Care

Fees: Debt Consolidations Cares fees range from free do it yourself information.  They also have partnered with several debt companies so fees will vary from a company to company basis.

Programs Offered: DCC offers everything from debt negotiation, debt counseling, bankruptcy help, to do it yourself options. Debt Consolidation Care has partnered with several different debt companies to help bring a wide selection of different options to you.  They also rate and show which companies are the best.  In fact one of their top rated companies is the Oak View Law Group.  To learn more about this company you can read more here.

care_one_creditCare One Credit Counseling

Fees: Fees vary depending on the amount of debt you have and which program you decide to use.

Programs Offered: Care One Credit offers 3 different programs.  The first is theDebt Management Program which works to help lower interest rates and reduce fees.  The second is a settlement plan were your debts are negotiated for a lower balance.  The third plan is a bankruptcy plan. With the three programs they offer they also have a huge community built up as well with blogs like The Debt Diva, forums so you can ask questions specific to your needs and even groups.  They also have a wide array of money management tools and a great article library.

cura_debtCuraDebt

Fees: Fees vary depending on the amount of debt you have and which program you decide to use.

Programs Offered: Curadebt offers two programs, the first is adebt settlement program and the second is a debt counseling program.
Along with the two programs they offer they also have a forum and contests were you can win a free debt consultation or debt settlement plan in the amount of $4500.  To learn more about this company click here.

fdrFreedom Debt Relief

Fees: Fees are combined into a monthly payment along with the debts and bills that are included into the program.  The fee is paid over an 18 to 19 month period.

Programs Offered: Freedom Debt Relief offers a debt reduction plan, a debt counseling program and a bankruptcy program.

Freedom Debt Relief was founded in 2002 and currently employees 500 people.  They have helped 30,000 clients since opening their doors.

Pick A Program

Of the five debt relief options I covered here I should mention that you before you consider any particular one that you should look into all of your options.  My suggestion is to contact several differentcompanies and get quotes before you decide.

Chris

Filed Under: Debt Managment Tagged With: , , , , , , ,

I Owe More Than I Make: 5 Tactics That Can Slash Debt Now

March 26, 2010 By 9 Comments

I know what you’re going through; back several years ago I was facing some of the same issues. I had debt racked up full on two credit cards; I had a mortgage to the hilt, a car loan and a home equity line of credit to boot.

As bad as all of that sounded I didn’t give up.  Don’t get me wrong I knew my situation was bad but if I was going to change my future I knew it was up to me  alone to do it.

In this post I going to share with you five tactics I used to get back on track and get out of debt.

You Need A Budget

Yeah, that’s right I said you need a budget.  I want you to look me in the eyes, uh I mean computer screen, right now and tell me that you have a fully functional budget up and running.

This is the first I did.  There are a ton of reasons you should have a budget in place and I didn’t have just a piece of paper with a few number scribbled on it.  A budget should hold a high value to you.

To get started you need some type of budgeting program.  There are a ton of them out there however I’m not a high tech type of person so here is a simple budget program I use that can help you get started.

This budget is fairly simple to use.  So download it right now and get started, if you have Microsoft Excel it should open up fairly quick.

budgetAlright, do have it up and running?  If not do it now, what I’m about to go through now will show you how to set up a simple and effective budget now.

Budget Steps

  1. Figure out your potential income. The first thing you need to is figure out what you could potentially earn in a given month.  I usually just figure my net income not my gross, this way I don’t have to deal with taxes.  Also make sure you include your spouse’s income.
  2. Figure out your potential expenses. Now that we know how much we are earning look at how much you are paying and fill in your potential expenses.  Your goal in this step is to plan out where all of your income will be spent.  This includes all of your normal expense but don’t for get to include how much you plan to save as well.  Like I’ve always said if you don’t plan how you want your money spent other will plan it for you.
  3. Update your actual expenses and income each week. In order to keep your budget accurate I’ve found it easier to just update my budget once a week this way I don’t have go through all of my accounts to figure out where my money was spent.
  4. Look for the leaks. Finally, once the month is up look through your budget and see where you could possibly find some leaks.  I found tons of them in my budget.  I found everything from extra charges on my credit cards to cutting down on my entertainment activities.  If you look I bet you can find some too.

Become A Minimalist

The next thing I did was I decide to cut fat out of my financial diet.  However this wasn’t going to be easy for me.  To do this I was going to have to sell some stuff that I was very emotional attached to.

The first to go was the two snowmobiles I owned.  Not only was it tough but I caught some flak from my family.  They’re big time sledders and thought I was crazy to sell my sleds.  However, by selling the sleds I was able to start an emergency fund and what I had left over went to help pay down credit card debt.

I also play guitar and accumulated a lot of gear over the years from playing in bands and brought a few things up to the local music store to sell.  I sold a lot of other odd and end things but those were the big things.  That money went to a great use and helped me get back on my feet.

Now I know that everyone does not have a couple of snowmobiles to sell like I did but I’m sure if you’re like most people you could find even just $500 worth of stuff around your house to sell.

So right now start compiling a list of things you could sell.  Go through old closets.  If you have a lot of stuff you might want to have your own garage sale or maybe you might be able them to a local consignment store in your area.  Every little bit helps especially in the beginning.

Finally, if you want to learn more about being a minimalist check out my good buddy Brad at Enemy of Debt, he is the true minimalist.  He has an incredible story so check it out.

Consolidate

After I had a solid budget together and sold a few things I decided to take everything to the next level.  I knew if I was going to speed up the process I had to fix some of financial issues I was having.

The first problem was I still had a home equity line of credit with over $7000 of debt and a 12% interest rate to boot.  The second problem was I had a mortgage that was a disaster.  I’m not going to go in depth about that here but you can read more about my mortgage disaster here.

To solve this issue I needed to refinance and consolidate my debt and this is exactly what I did.  I usually don’t recommend this option for a lot of reasons but in situation it did a few things to help me out.

  • First is combined payments and gave a smaller payment altogether.
  • It gave me a lower interest rate, I went from 12% on my HELOC to 6% and cut a ton off my interest payments.
  • Finally, I was able to rid myself of the Option ARM Loan that was killing my finances.

As good as those benefits were I still had the fear of falling back into debt.  However this was more of a last ditch effort for me, luckily it all worked out.

Pay Yourself First

The next tactic I used to slash debt was paying me first.  The truth is you have to save money, not just some of the time or when you feel like it.  You have to do it all the time.

The reality was every time I paid off a good portion of my debt I would somehow sink back into debt, and every time I did this it got worse and worse until I had an epiphany.

The problem was I was focusing too much on the debt.  Debt is a negative term no matter how you look at it.  So what did I do, I started focusing on saving my money rather than spending the money on debt.  I started saving $50 a month back into an emergency fund.

Doing this had a huge effect on my life.  Instead of sleepless nights wondering how I was going to pay next month’s bills I started getting better sleep and worrying a lot less.  It’s amazing what an extra $1000 bucks sitting your bank account will do for you.

I Changed The Way I Think

Finally, I changed the way I think.  This was probably the hardest thing for me to do of the five.  The problem was I saw myself as an average guy, with a wife, two kids and a whole lot of debt.  I thought this was the way things worked.

The reality is life is kind of like a thermometer.  Let’s say you live life at about 85 degrees, this is where you are comfortable in life from everything to the type of people you associate with, the food you eat, and even the way you handle your finances.

Now let’s say life has given you 105 degrees and you’re up for a promotion at work and it seems everything is clicking into place for you but then you realize that you are comfortable living life at 85 degrees and slowly you begin to fall back to 85.  All of a sudden you get lazy and show up late for work, your finances begin to slip and you realize that you racked a lot of debt up last month on your credit cards.

Has this ever happened to you?

The reason this happens is because you are not willing to change.  However it can also happen the other way as well if you’re comfortable at living life at 85 and all of a sudden life has given you 65 you realize you need to change something, so you get into work 15 minutes early and watch over your budget much more closely and a month down the road things are back to normal.

Why does this happen?

This happens because we are comfortable with the way things are.  For most people this will happen their entire lives without ever taking notice of the endless cycles of ups and downs they’re going through.

So how do you break this cycle?  It’s actually quite simple.  You need to believe 105 degrees in where you feel comfortable.  I know that sounds easy to say but it’s true you have to be willing to change before change will take place.

One of the things I did to change was I took a part time job in financial services.  At first a lot of people thought I was nuts but I knew that if I wanted to lead a different life I had to change.  I started to associate with higher quality people who managed and used their money well.  After  a few months my finance began to get better all because I associated with people who took better care of their financial situation.

Try this simple little exercise right now, think of the 5 people you spend the most time with each day excluding your spouse?  Write their names down, and ask yourself these questions, what are these five peoples financial situations like?  How do they spend their money?  Finally, how much debt do they have?

I’m willing to bet their situation is pretty close to yours.

In Closing…

I know a lot of these tactics that I’ve shared with you may take a little bit to apply so I suggest taking them one at a time.  There is no way you are going to do all of these things at once.  Also if you’ve been in a situation where you owed more than you made I would like to hear your story and how you bet the odds.

Chris

This post was recently featured on the carnival of personal finance by Might Bargin Hunter

Filed Under: Debt Managment Tagged With:
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