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Debt Relief Information |
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How Do You Spell Debt Relief?
Of all the problems possible in a marriage, finances cause the most marital discord. Many singles consider finances to be their most worrisome issue. Many times this is due to a heavy debt burden. Several options exist to help people get debt relief from their unsecured debts. (Unsecured debt is not linked with a physical asset. Therefore, credit cards and medical bills are unsecured debts; a car loan or a mortgage are secured debts.) One option for debt relief is bankruptcy. While unsecured debts are indeed discharged, the long-lasting black mark on your credit report (up to ten years) makes bankruptcy less than ideal as a form of debt relief. Further, changing bankruptcy laws will make it more difficult to file. Bankruptcy should only be a last resort. It is not a quick fix. Another option is debt consolidation. Debt consolidation combines your existing loans into one loan. While this does away with late fees and over-the-limit fees, very little is done to reduce the amount of debt or to renegotiate interest rates. Further, this uses something as collateral, such as your house. If you still have trouble paying, you could lose your house to foreclosure. A third option of debt relief is debt settlement. The debt settlement company negotiates with credit card companies to agree to settle for a lesser amount owed, often pennies on the dollar, of both the interest and the principle. A debt settlement company also acts as the middleman between the debtor and the credit card companies, eliminating phone calls that border on harassment. A downside to debt settlement is that many debt settlement companies advise you to stop paying your monthly bills altogether in order to force credit card companies into settlement. While this may work for some credit cards, others may be just as likely to take you to court for non-payment, and debt settlement companies take no responsibility for such action. A fourth option for debt relief is through credit counseling services. This is similar to debt consolidation in that you pay only one bill to the counseling service. They in turn take over all your debt payments. The benefit of this is that any communication with the creditors is handled by the counseling service. The downside is that credit counseling services work primarily for the credit card companies. While they may work for a reduction of interest, they probably won't work for a reduction of principle. No matter which option you choose for debt relief, all are better than doing nothing and falling further and further behind. Check out all your options before making a decision. Timothy Gorman is a successful Webmaster and publisher of Debt-Relief-Solutions.com. He provides more debt consolidation, credit counseling, repair and free debt relief information that you can research in your pajamas on his website.
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Debt Facts 11/20/08
by: Ian Young
In 2003, almost one and a third percent of US househoulds (about 1,650,000) filed for bankruptcy, indicating that bankruptcy may not have quite the stigma attached to it as in other parts of the world.
Somehow, the USA, with a population of about 294 million, managed to have over a billion credit cards in issue. That's over 4 cards for every man women and child. About 20,000 different cards are on offer from suppliers.
Those credit cards, together with debit cards, account for a quarter of ALL personal expenditure in the US.
Debt is a fairly recent phenomenon. Before the 1930's, most people couldn't borrow, even to finance property, and either rented homes or built them from scratch. Nowadays, mortgage debt runs in the trillions. Personal debt excluding mortgages is about $19k per household on average, over half of which is on credit cards, a figure that is triple the statistic of 1990.
Nowadays, over 40% or US families routinely spend more each year than they earn. The difference? Financed by debt.
Convenient to use? That credit card convenience ends up costing the average Joe 12% more than paying by cash.
If you only ever pay the 2% minimum monthly payments, each $1000 you owe will take nearly 22 years to repay and will add a further £2,300 to the bill, meaning you effectively pay $3,300. Despite this being common knowledge, almost 60% of credit card users DON'T pay their credit card bills in full each month. This reliance on high interest credit cards means that the average US family pays about $1,200 in interest on their cards each year, at an average APR of 18.9%.
90% of Americans 'are not concerned' by their credit card debts, although about 50% of them would refuse to tell a friend how much they owe.
A quarter of adult Americans have 'maxed out' a card at some time or other.
A tenth of them have been hounded by collection agencies for late payment, the same amount as have gone at least 30 days overdue on their credit card bills.
The typical US student has 7 credit cards, and a significant percentage of them (over 10%) owe $15,000 or more on them.
Credit cards encourage you to spend more. In surveys, it was found that paying for junk food with a card as opposed to cash led to a 50% increase in spend. You want fries with that?
Far from becoming rich, the average middle aged US citizen is only worth about $40,000, and that INCLUDES any equity in their homes. The rest of it belongs to banks and lending institutions. This reflects the drop in personal savings, down from 8% of income to less than 1% in 2004, thanks mainly to the poor returns on savings accounts, and the easy availability of credit.
In 2002, the sum total in card fees for the US credit card sector was $45 billion. It is expected to top $60 billion by the end of 2004. Whichever way you look at it, the credit card business is enormous, and has a sincerely vested interest in getting you into debt, then keeping you there.
About The Author
Ian Young is a debt counselor working for www.nodebtever.com a free debt relief site.
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