Helping You Avoid Life's Financial Mistakes

How To Get Out Of Debt When You Owe More Than You Make

June 1, 2009 By 2 Comments

Not Everyone Can Get Out Of Debt By Themselves

About three years ago when I was still in financial services I was asked by a new recruit of mine to see if I could help someone who has a lot of debt issues.  I agreed but didn’t make any guarantees that I could do anything.

When I arrived at the appointment and began rummaging through all of the statements, I realized that they had over 20 different credit cards with almost all of them maxed out to the limit.  This totaled almost $200,000 in debt, not counting their $250,000 mortgage debt.

These people were obviously in some serious trouble, but that’s not even the worst part.  If they would pay even just the minimum payments to all the cards they still would even break even at the end of the month.

These people defiantly needed some professional help.  What made the situation worse is that she was not willing to try anything I said.  She made plans to file for bankruptcy and was convinced that it was the only way to solve her problem.

debt-crunch

In this post I hope to give a little more direction on what you should do when you fall into a situation like this.

What You Should Do If You Can’t Pay Off Your Debt

Minimize Your Payments. By cutting down your payments to the minimum amount owed you will be able to at least keep afloat.  However, there are other things you can do besides just paying the minimum amount on your credit cards.

Look into cutting down your interest rates as well.  You can do this by calling the credit card company and negotiating a deal with them. You can also try non-profit credit counseling if you would like to learn more about this option.

However,  this doesn’t mean you should just pay the minimum amount on your debt at all times. The point of cutting down to the minimum is being able to focus more money towards one debt then just paying a little towards all of them.  If you want to learn more about how to set up this kind of debt plan click here.

Increase Your Cash flow. Next you need to look for ways to increase your cash flow.  There are all kinds of ways to do this.  First off, you could find a part time job, in order to bring home a little extra money until you get a few more debts paid off.

Second, you could start a part time business.  This isn’t the quickest way to generate extra cash but over time it is the most effective.  In fact you may need a little extra cash to get started with a part time business so this may not be a viable option right now.

Third, you could sell things from around your house. This is an easy way to generate extra cash quickly.  Check out this article to learn more.

Bring In Professional Help. If you still can’t get a grip on the situation you have several options to think about.  I will run all them briefly here but I will also give you a link to some more info that will help you better understand each option.

First, you can look into a debt counselor.  This is a way to work out your debt issues with someone one on one.  In most cases you will have to pay back most of your debt here but with this method you have someone who will guide you through the process.

If you are interested in this option click here.

Second, look into debt negotiation.  Debt negotiation is kind of like going through a mini bankruptcy.  This kind of company will negotiate a deal with your creditors and lump all of your payments into one single payment.  This payment is usually all you need to pay because it will also include your fee for the debt negotiation company.

If you would like to learn more about this option click here. I also recommend this option over bankruptcy because the effects are not as bad a bankruptcy.  So here is a company I recommend you check out.

Third, make bankruptcy your last option.  I don’t recommend this option unless all other options have been exhausted.  That being said to even qualify for this option you have to pass a means test.

This means you will have to sit down with a debt counselor and they will decide if it is right for you.  If you  pass that you can begin filing for a chapter 13 bankruptcy.  Which means you will have to pay back a certain amount of your debt.

What happens is you will be required to pay back maybe 30 cents on the dollar for one debt, 50 cents on another, 100 cents to another, and even 10 cents to others.  The point is you will not get away without paying at least paying some of the debt back.

If you would like to learn more about this option click here. Also check out this link as well if you would like learn about other debt relief options.

Chris

The post was recently featured on the Carnival Of Personal Finance by Money Under 30.

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Has Society Lowered Their Financial Standards

January 5, 2009 By 3 Comments

Lately the thought of how people use their money has been bothering me.  I’ve been taking time to just watch the people around me and how they use their money.  Listening to people at work, friends, family, and just about anybody that I’m around.

From this little experiment I learned a lot about people and their money.  In this post I am going to pose the question, is the way people handle their money and personal finances gotten out of control or do you believe things a pretty much unchanged?

Have The Standards Changed

With all the news on the current recession to the Wall Street scandals, to the government bailouts have the standards changed? 

So I did a little digging and found some current facts to start with. First, foreclosures are up over 55% in the last year effecting Michigan and Ohio the most.   I recently heard on my local news that there is a foreclosure every 30 seconds in the United States. 

Bankruptcy is up nearly four times higher than 2005.  There are over 2,000 bankruptcy filings per day again with Ohio and Indiana leading the pack. 

Unemployment reaching near 10% in some state such as Michigan, Rhode Island, and California.  Though it’s about to get worse with GM just recently shutting down it plant in Dayton, OH.

When you add all of that onto the massive amounts of credit card debts people have built up is it no wonder we are in this situation.  But Bankruptcy, foreclosure, and unemployment are not the only things to blame for us being in this situation. 

When you really look at the big picture and what I have learned form my little experiment is that people are buying more and saving less.  That’s right saving less.  In 1980′s the average American saved 10% of their income.  In the 1990′s it dropped to 5%  and now in the late 2000′s it’s actually gone negative.  Meaning most people are not saving anything.

To say the least we have become a see and buy economy.  Seeing what we like and buying without worrying about the consequences.  This type of lifestyle is what has lead us to are current recession with the mortgage disasters.

The normal standards that the lenders have been enforcing for so many years have gotten sloppy by giving out things such as option arm loans and even handing out loans with 125% financing. 

You heard me.  125%

Not to mention everyone in on the scandal such as the appraisers and title companies.  In fact a few month ago several appraisers in and around my area were arrested for putting out false appraisals and actually stating that properties were actually worth more than there were.

Who Is Teaching Us About Are Money?

In the end we have to look ourselves in the mirror and confront are mistakes because we are to blame for the financial challenges that we face.  Not the government, not are employers, not the lenders or the banks. 

The real question is where do we get are education about money from, school, family, friends, coworkers?  While I’m guessing it’s probably all of the above the truth is the average American does not have much of a financial education. 

To relate from my own experiences from being in financial services only 20% of the families I helped knew a lot about how money works.  Some knew a little while others knew nothing at all.  In fact I’ve been recently been running a pole on the front page of my blog to see how many people actually have a financial planner and as of this post is about 50%. 

How To Change The Situation?

While I can’t speak for every family out there I can speak for my own.  If your want to reverse the outcome that economy has given us start with yours first.  Get your families finances in order first.  Then spread the news by helping others.  Think if you could help one other family with their finances just as you have with yours.  The effects would be staggering.

This is the very essence of Stumble Forward.  To help those get on the right track by helping families make better financial decisions.  If that sounds like you subscribe to my RSS and get your family on the right track.

This post was recently featured in the carnival of money hack #47 hosted by Money Beagle.

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How Pain And Pleasure Effects You Getting Debt Free

December 26, 2008 By 5 Comments

In life their are two things that control what we do for any reason.  The first is PAIN, the things we don’t want to do and the second is PLEASURE the things we do want to do. 

Recently I was reading a great book about this subject by Anthony Robbins, “Awaken the Giant Within.”  He talks in greater length about this in his book but that entire section made me realize how much pain and pleasure have everything to do with getting you out of debt or being in debt for the rest of your life.

Today’s post is about facing your pain of being in debt to achieve pleasure by becoming debt free.

How Pain And Pleasure Control You And Your Debt

Pain and Pleasure all happen because of one reason, a decision, and that decision either leads you down a road of pleasure or pain.  However here is the problem.

We as human beings are geared towards pleasure.  Everything we do is to stay away from pain.  However is it always the right way to do things?

Although, we are looking for the easy way out especially when it comes to getting out of debt and in the short term things may look good but in the long term we may face some even bigger challenges.  Getting debt free is all about associating pain and pleasure the right way. 

Here’s a simple example about what I mean.

Lets say you don’t like to brush you teeth because in the morning your to tired or at night before you go to bed you just want to go to bed.  Now in the short term you have gained pleasure because your to tired to brush your teeth but in the long term you may cause some even bigger challenges for yourself by not brushing say tooth decay, a root canal, or worse dentures. 

So just cause you take the short term pleasure doesn’t mean their will be some long term consequences.  Now let me give you an example of how this might happen if your trying to get out of debt.

Lets say you want to put a debt plan together so you can finally get on the right track, but this month you have some unplanned bills coming through and you decide to wait until next month.  You literally talk yourself out of it for that month and decide I’ll do it later and then another month goes by and another month till finally you have so much debt that you have to get into a debt counseling program, or a debt negotiation program, or worse file for bankruptcy.

Again you pushed off getting a debt plan together something you could have done on your own and now you need to take more drastic measures.  All because you decided in favor of the short term reward and not the long term pleasure. 

Does this sound like you? 

How To Use Pain And Pleasure To Get Debt Free.

The simplest way to get debt free is changing the way you associate pain and pleasure.  For example if associate just trying to forget about your debt problems that mean you are associating pleasure for not setting up your debt plan.

However if you would associate thoughts of, ”if I don’t setup my own debt plan now I will have to go into a debt negotiation plan or worse bankruptcy,” you would associate pain with not setting up the debt plan and do it immediately.  Then every time you think it’s a pain to get out of debt you can think of the long term pain it would cause you.

Though this may come at a great cost to you.  Sometimes before most people take action is when it’s to late.  It’s finally come to the point that you must do something or their will be a big price to pay, say foreclosure or bankruptcy.  The pain has dramatically increased and now you need to do something or else. The pleasure of putting it off is not their anymore.  This is when most people decide to act however you don’t have to wait till it comes to this. 

So you might be asking how get started? 

Their are plenty of ways to do so but finding an inspiring and moving way would be the best.  For example if you know someone or people who’s in bankruptcy or even better homeless visit them and think about how life would be if you didn’t get your act together.  Seeing someone going though this kind of pain can have a huge effect.

I once heard of a guy who didn’t want his kids to do drugs and wanted them to learn why they shouldn’t take drugs and the effects they can have on you.  So he knew of a place where they rehabilitated drug attics and decided take his kids on a tour of the place.  The sites were unspeakable.  Though terrible it worked.  The children’s fear was permanently ingrained in their thoughts and every time someone tried to offer them drugs the images of those people going through rehabilitation came to mind.

The mind is a powerful force.  In the end setting up a debt plan may cause you to endure a little pain but it’s minimal to the pain you could potentially face down the road by just giving up a little pleasure now. 

Want to save yourself form financial pain sign up for my RSS and get back on track today.

This post was featured in the Money Hacks Carnival by Cash Money Life.

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Get Out Of Debt Fast Today

September 29, 2008 By Leave a Comment

Is It a State Of Mind Or Just Action?

Getting out of debt is as much a state of mind as it is the ability to simply take action. You have to be committed to taking action if you want to get out of debt fast and you must immediately decide that now is the time to do, both of which are equally important. Getting out of debt is not that difficult, however it is still challenging.

But what isn’t?

You are not the only person who has been in debt; there have been people before you and there will be people after you. Getting out of debt is definitely the first step towards actively investing in your future. Especially when it’s credit card debt that you need to clear up.

Getting out of debt is mostly all about two things:

1) Making the largest payment you can afford.

2) Making sure your debt is at the lowest interest rate.

Make sure you learn the advantages of having a low interest rate and of making a larger payment than the minimum. Getting out of debt is inherently a long process and every little bit of it can help to pay off credit cards, but it’s really about developing better habits. Creating new habits requires sticking to new practices until they come naturally and automatically, so setting small goals can help greatly. Getting out of debt is a process.

Getting out of debt is going to require both discipline and action. It really won’t be easy to do especially if you are already heavily burdened by it. Following a method of listing all your expenses can be helpful because you can track down where your money is actually going. Getting out of debt should be done by following a simple, step by step process. It will take hard work, discipline and persistence, but it can be done and the rewards are truly great.

Check out this article on how to set up your own personal debt plan.

Getting out of debt is also about making sure you have more income than the amount of your expenses, which is basically having more coming in than going out. Remember, it is going to be a long term project. It requires a willing heart, a concrete plan, and a disciplined approach to prevent the need to file bankruptcy.

Paying off your debt is 70 percent psychological and only 30 percent financial. You are going to have to adopt some goals of paying off from the bottom up, so that there’s not only a light at the end of the tunnel, but also marker lights reminding you that you’re on the way out.

Hang in there you can do it.

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A Guide To The Complexities of Bankruptcy Chapters and Laws

September 24, 2008 By Leave a Comment

What is Bankruptcy?

Bankruptcy is a legal procedure granted by the Federal Law that allows an individual or organization with excessive debt to pay their creditors in a certain amount of time. The bankruptcy attorney specializes in bankruptcy law which enables them to design a legal plan to assist in resolving this debt. There are several types of bankruptcy proceedings under the Bankruptcy Code. Because bankruptcy law specialists are fully in tune with the most recent changes in the laws, they are best qualified to file the appropriate documents to eliminate debt.

There are several reasons that an individual or organization may consider filing for bankruptcy. Consumers or organizations that are under

  •  the threat of wage garnishments
  • foreclosures,
  • liens,
  • lawsuits or
  • repossessions

can potentially benefit from filing bankruptcy. However, in order to properly regain total control over finances, it would require professional knowledge and expertise. Consequently, recent changes in bankruptcy laws as directed by the Bankruptcy Abuse Prevention and Consumer Protection Act indicates stringent guidelines in regards to chapter 7 and chapter 13 bankruptcy proceedings. These laws have made it extremely difficult for individuals or organizations to implement these procedures without the assistance of a bankruptcy attorney.

Types of Bankruptcy and there challenges

The chapter 7 bankruptcy procedure is the basic liquidation for consumers and businesses. The chapter 13 procedure is the rehabilitation with a payment plan for the individual with a regular source of income. The chapter 7 and 13 proceedings are the most common types of personal bankruptcy.

The chapter 7 or chapter 11 procedures are generally used by a business or cooperation. Due to the recent adjustments of bankruptcy laws, it is quite challenging to file bankruptcy. Specifically, filing bankruptcy is not as simple as liquidating assets or your debt. The new laws actually encourage and enforce chapter 13; consumers must find a way to incorporate a payment plan to repay the debt.

As many individuals and organizations enter the process alone, the bankruptcy attorneys are available to provide valuable information that could have a significant impact on the outcome. The bankruptcy law experts are able to offer an initial evaluation to determine if you are a prominent candidate for bankruptcy proceedings. Furthermore, the attorney can also determine which proceeding is best given your personal circumstances.

One of the basic proceedings that a bankruptcy attorney practices is the chapter 7, liquidation. The attorney also practices the debtor rehabilitation procedure that involves a court- approved payment or reorganization of the debts. The debts are settled over an allotted period of time by using the future earnings of chapters 9, 11, 12 and 13.

  • Chapter 9 bankruptcy is the municipal bankruptcy that is only available to cities, towns, counties, municipal utilities, taxing and school districts.
  •  The chapter 11 proceedings is simply a court- approved reorganization. It is generally practiced for business/commercial enterprises which allows them to continue operation while repaying creditors.
  • Chapter 12 and 13 indicates an “Adjustment of Debts of a Family Farmer with Regular Annual Income” and an “Adjustment of Debt of an Individual with Regular Annual Income.”

A bankruptcy attorney is available to find the best legal option for an individual or business to get out of debt. The bankruptcy lawyer will assist with solving credit problems and provide a stable financial status.

The bankruptcy proceedings that are regulated by the United States Bankruptcy Code determines the chapter a debtor can file, what bills can be dismissed, how long payments may be extended or what possessions should be liquidated. Ideally, the bankruptcy attorneys are extremely knowledgeable of the most recent bankruptcy laws thereby providing the individual and business with reliable representation during this process.

For more insights and additional information about Bankruptcy Law Bankruptcy Chapters as well as getting a free bankruptcy evaluation from a qualified bankruptcy attorney local to you, please visit our web site at http://www.bankruptcy-data.com

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The Pros And Cons Of Getting Debt Free Yourself – Part 1

September 15, 2008 By 8 Comments


Can you do it yourself?

Out of all the different ways we have been talking about over the last few days, getting debt free yourself will probably be the first option most people try.  Simply for a few reasons.

  • It cost you nothing to do it yourself.  Other than just paying the debt off.
  • You don’t have to qualify for the program.  It’s your program.
  • Finally, you can do it how you want to.  You have complete freedom of how you want to get debt free.

How do I get debt free?

This is the biggest question people consider when they want to get debt free.  Some will just pay minimum balances on all there accounts or apply a little extra to every account thinking it will save me more than if I just made the minimum payment.  Along with that doing some tough budgeting to apply more money to your debts.  But does this work?

However this may seem like a great way to go about getting debt free but there is a difference in getting debt free just by doing some strict budgeting or actually putting a plan together.  This plan is in known as the debt snowball plan.  You may have heard of people like Suzie Orman or Dave Ramsey talk about this.

How does the debt snowball plan work?

The plan is actually very simple.  Although once you impliment it you must stick to it.

1.  Agree that you won’t stack up more credit.  If you keep adding to your credit cards or any other debt then getting debt free will not actually work.  You must stop using your credit.  You must also stop creating new credit as well.  No new credit cards.

2.  Gather all of your current debts.  Get all of your credit card bills, HELOC (Home Equity Line Of Creidit),  car loans, personal loans, school loans, and mortgage bills together.  Include all debts not just the ones with higher balances. 

3.  Line your debts from lowest to highest balance.  This order is how you will pay off your debts.  Some will say pay off the highest interst cards firsts.  I disagree.  Order them from lowest to highest ballance this way you will see progress right away in the plan.  Also put your mortgage last to pay off.  The reason being there are some great tax benifets to your mortgage as apposed to your credit cards.  Also credit cards will usually have higher interest rates.

4.  Pay the minimum payments.  Pay all the minimum payments on all of the debts except for the one with lowest balance.  The debt with lowest balance you will pay the minimum payment along with an extra $50 to $200.  Whatever you pay extra keep it the same.  Don’t add or subtract any of the extra that you pay.  So if you apply $100 extra always keep it at $100.

5. Continue to pay this until you have the first debt payed off.  For example if your first credit card balance is $1000 and the minimum payment is $50 then pay the minimum plus an extra $100 or whatever you choose to pay extra.

6.  Celebrate!  This is a very important step that most skip.  Celebrate that you have paid off a debt especially your first one.  You don’t have to do anything big.  Maybe you go out to eat at a nice resturant, take the kids to the zoo, or go see a movie.  Have some fun with this.  Getting debt free doesn’t have to be a drag.  It can be fun too.

7.  Start paying off the next debt.  Start paying off the next debt with the next lowest balance except this time add the $100 that you are paying extra plus the $50 you paid on the previous debt along with the minimum balance you are paying on the current debt.   Do this until the debt is paid off.

8. Celebrate again!  Obviously you know why this is important from reading step 6. 

9.  Pay off the next debt.  Again start paying off the debt with the lowest balance and add the $100 extra payment along with the minimum balances you paid on the previous two debts. 

10.  Celebrate again!  Again you know the drill. From here just keep on repeating steps 9 and 10.  Once one is paid off continue on to the next debt with lowest balance applying all the minimum payments plus the extra $100.

You can see how this will eventually begin to escalate to the point where the only debt that is left is your mortgage.  Then with all of those minimum payments you were applying to your credit cards along with that extra $100 you will have that mortgage paid off in now time at all.

I’m debt free, now what?

Once you are debt free start saving the money for an emergency fund.  Save six months worth of expenses in some sort of savings account for emergencies only.  This way if sudden expenses do come up they won’t dig you deeper into debt.

After you have an emergency fund established save the rest back for retirement and possible college savings for your kids.

Last but not least take action.  This is the only way you will solve the problem.  If you wait you to long you may have no other choice but to consider debt negotiation, consumer credit counseling, or worse bankruptcy.  Do let that happen to you.

Start Now!

Finally, are you using this method to get debt free?  Are you interested in doing this program?  What are your concerns?

Read part 2 of getting debt yourself to learn the pros and cons of this program.

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The Pros And Cons Of Debt Negotiation

September 12, 2008 By 1 Comment


How debt negotiation works.

Debt negotiation may sound a lot like consumer credit counseling but they are different in many ways.  With this type of program an individual is assigned to you to go out and actually talk to your creditors and negotiate on your behalf to settle your debt much sooner. 

In fact you must qualify to even be in the program.

  • You must demonstrate a hardship.  Whether this would be a loss of a job, a foreclosure, or even an injury that has laid you off work for a while you must be facing a hardship.  The point being you must show that you can’t solve your current financial situation and you need help.
  • All debts must be unsecured.  So an account that is secured will not be excepted.  Other debts that won’t be excepted are Public utilities, student loans, Military accounts, MAC Tools, Payday advances,  and federal credit unions.  Although business deficiencies may be included.
  • All accounts must be greater that $500 in order to be excepted and if they are over $500 and unsecured they must be included into the program.  Also depending on the company they usually want a minimum of $10,000 of total debt in the program all together. 
  • While in the program you can not use your credit to obtain unsecured credit cards.  This is done so you don’t keep piling more debt into the program. 
  • People who have declared Chapter 7 bankruptcy in the past 3 years will usually not be excepted in to the program. 
  • Any 0% credit card accounts usually won’t be excepted into the program until the 0% time frame is up.

If you don’t meet any of these criteria you will not be excepted into the program.  So if your looking at this list above and you aren’t in a hardship this is not a program for you. 

So what are the advantages and disadvantages of debt negotiation?

Advantages

1.  Protection from creditor harassment.  If you are receiving a lot of calls from creditors they will pretty much stop right here.  Which is great because it will keep you from those negative call that keep you up at night worrying about those bills.

2.  Debt is reduced.  Usually the total unsecured debt is reduced by 40% to 60% over a period of 2 to 3 years.  In a lot of cases saving you a lot of money in interest payment you won’t have to make. 

3.  Improves credit ratings.  As you pay off your debts while in the program your credit rating will start to improve.  This will improve your credit much faster that bankruptcy which takes 10 years till it is off your record.

4.  Developes a savings habit.  If you aren’t a good saver this program will help you do so.

Disadvantages

1.  Credit rating can be affected at first.  If you are coming current with accounts you may experience a drop in your credit.

2.  Accounts settle individually.  As the funds accumulate the money will pay each debt off individually.  This will cause a bad credit rating as an effect.

3.  May seek legal remedies.  If the creditors aren’t getting payed they may choose to get the lawyers involved and take you to court to get there money.

If you are facing a tough hardship and have been thinking about bankruptcy you may want to consider this option first.  This option can save you a lot of money versus paying a lawyer to do a bankruptcy.  Debt negotiation is usually much cheaper.  However make sure they have the proper accreditation’s and that they aren’t some fly by night company.

Finally are you thinking about going through a debt negotiation program?  Have you ever been through this type of program?  What are your thought on it?  Was it worth it?  If you haven’t been through a debt negotiation programs what issues are you contemplating about?

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The Pros And Cons Of Going Through Bankruptcy.

September 9, 2008 By 1 Comment


Are you considering bankruptcy?

With all the issues with so many people in debt bankruptcy may be one of the toughest ones to get through.  If you have ever been through this situation you know what I’m talking about, and that’s not even the worst of it. 

Once you get through bankruptcy it starts a whole new battle.  From the date of your discharge it usually will take up to 10 years to get that off of your record.  So it should be said bankruptcy takes some time to get through. 

In this article I am going to discuss some of the advantages doing bankruptcy and some disadvantages.

Advantages

1.  Protects some assets.  With bankruptcy you can save some of your assets.  However only if the asset is exempt will it stay untouched.  It will also vary according to whether you have filed a Chapter 7 or Chapter 13. 

Chapter 7 involves liquidating all assets that are not exempt.  Things you may be able to exempt are house holds items needed on a daily basis, things you may need for your job, and your vehicle. 

Chapter 13 is the preferred route because it is consider a less pressured structure.  This allows people to make partial discharges on some of there debt and also lets the individual to make a monthly payment off the rest.

2.  Under Chapter 7 you start over debt free.  Yes the debt and misery are gone.  However I must inform you that this is the toughest route to go and is not for the faint of heart.  In fact I urge most people not to go this route unless it is the only option left that you haven’t tried. 

In most cases you can avoid bankruptcy all together.  I urge anyone reading this article do not pick bankruptcy because it sounds like the easy way to get debt free.  It’s not.

Disadvantages

1.  New laws for bankruptcy.  The laws have changed and it is now much harder to discharge debt.  In order to do a Chapter 7 bankruptcy an individual must pass what is called a means test.  This test is the only way to qualify.  More on this to come in future articles.

2.  Damages your credit.  As one of the most severe ways to damage your credit it will take up to 10 years to get off your credit report.  This means it will be nearly impossible to get a loan of any kind.  Not to mention kill your credit score.

3.  Affects your business.  If you own a business it will destroy almost any possibilities of you getting any business loans, if you haven’t already lost your business.

4.  Affects your reputation.  Bankruptcy is not usually a personal event.  It tends to be public knowledge.  Sometimes listed in news papers and even on the internet.  This can have a lot of negative implications.  Especially if your are trying to get a new job, or run for public office.

If you are considering this option take some time to think about these advantages and disadvantages.  You also may want to talk to a lawyer about this option as well.  One word of advice though.   Don’t let the lawyer tell you bankruptcy is the only way to solve your problem.  Just because he’s a lawyer doesn’t mean he is always right.  Get a few opinions on what you are trying to do.

I once knew an individual that was going through bankruptcy and it didn’t matter what I told her the lawyer had her convinced bankruptcy was the only way out.  Don’t fall into this trap. 

Finally, have you ever been through bankruptcy or even thinking about it?  What is your take on it?  Did it help you or did it hurt you?  Do you think people should or should not go through bankruptcy?

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5 Ways To Get Debt Free

September 8, 2008 By 2 Comments

Of all the ways to get debt free I have decide to spend a week discussing the different way to do so.  Also I will be discussing the pros and cons of each option.  A lot of the problem of getting out of debt is knowing really what options are available to you and which will help you the best for your situation.

1. Bankruptcy.  Is this the best route?  Sometimes it may be others it may not. 

2. Debt Consolidation.  This is a technique where you combine you current debts into one and make just one payment usually to get a lower interest rate.  A lot of people will usually combine everything into there home loan.

3. Consumer Credit Counseling.  This option allows you to work with an individual to get debt free.  I think of it like a debt coach. 

4.  Debt Negotiation.  This option is where you higher a company to go out negotiate your debts for you helping you cut your interest rates.

5. Do it yourself.  This option is the least costly of them all and allows you to employ tactics such as snowballing.  However just because it’s the cheapest doesn’t mean it’s the easiest.

Out of all 5 of these options they all have there up sides and down sides.  This will be the discussion as the week unfolds.  However knowing your options is just part of the process doing them is a whole other. 

If you are considering any of these options you may want to read these articles before you decide.  In the end you may decided it may be simpler to go with another option first.

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