FINANCIAL FREEDOM

Tips to Succeed with Personal Debt Management

Do not freak out whenever the phone rings or someone knocks at your door. This is the situation most people who have acquired lots of debts feel especially in times when they can no longer control the situation. There is still hope for you. You just have to develop a personal debt management plan. And you have to make sure that you abide by the rules that you set and the goals that you want to achieve.

You have to help yourself. You have gotten yourself in this situation. You can also help yourself to get out of this rut. Look around you. Are you surrounded by things that you don’t really need but you have acquired throughout the years? What prompted you to buy these material things? The usual answer to this is the comfort of owning a credit card, or credit cards.

The temptation is hard to resist. You don’t have to have lots of money and yet you can buy the things that you have only dreamt about. But if you give in to these thoughts, this is where you start to bury yourself with debts. You have to stop this soon and start your journey to heal and change.

While your financial problem is still manageable without going to a professional for help, you may want to start with the following steps.

1. Avoid temptations. For example, your weakness is food and yet you still go and dig for magazines or TV shows that only pique your curiosity and appetite more and more. As a result, you will indulge on your cravings even though you still cannot afford. You will think that you will only use your credit card just this time.

But the process won’t stop. The temptations won’t go as long as you succumb to its every call. So as much as you can, avoid it so that you will succeed in not thinking about such things at all. Let this be part of your healing process. If you think like you can handle such things, that you can stand yummy pictures and mouth watering delicacies on TV without thinking that you must have those immediately, then d go ahead and splurge.

2. You must have a complete overview of how much is your overall debt. You also must compute how much money you acquire each month. You have to allocate funds wisely. You have to make sure that you pay off your debts even little by little. This is better than not paying at all. With the latter, the interests may go out of hand until you can no longer even think of how you can afford to pay your debts because it simply has gotten unimaginable.

3. If you are settled on paying all your debts, you must stop acquiring more. You can call your creditors and ask for a suitable payment scheme. You can bargain for the interests to stop. You can tell them that you will just pay everything out and you are dedicated on doing that. You can ask their help on how you will be able to do that faster.

And to succeed with your personal debt management venture, you have to be determined. You have to focus on doing everything right. And you must think about your life in general before you purchase anything in the future.

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Debt management from the home

With the current economic crunch, a lot of people are feeling the burden. Prices of basic commodities have gone up and in contrast most of their stock portfolios have gone down in value because of the stock market problems. Because of this, life is harder and some people who have loans may feel it is harder to make payments than before.

But although it is hard, it is not impossible. And you don’t really need an expert to do that. You can always practice practical saving and debt management work that can save you at least some money for the rainy day. Below are some of the simple ways that you can manage your debt without really having to pay for an expert's advice.

1. Prioritize debt payments.

Remember that you are not only paying for the money that you have loaned, you are also paying for the interest that you have incurred. This can be an additional burden for you and the hard part is, you did not even got to use those interest payments. They are just add ons to the debt that you have.
If you have extra money, pay for your debts. Look at the debts that you have and pay for the ones with the highest interest rates. Some experts suggest that you set aside a percentage of your salary to debt payment to ensure that you will be slowly chipping away the debts.

2. Save on utilities and other expenses
Cut down on the things that you can cut down. This includes utilities such as electricity, gas, water, services like plumbing and gardening and other household expenses. You may not realize it but you are actually paying for more than the average family size usually need because of wastage. Turn off the lights and the TV if you are not using them. The same goes with the water. If you can walk, don't take the car. These simple areas can help you save a lot, which you can use to pay for your debts.

3. Cut the credit
Don’t get a loan anymore. If you don't have money, then practice saving and not spending! Don't borrow from other people. And if you have to borrow because of emergency expenses, make sure that you negotiate for lower interest rates or no interest rates at all.

If you have a credit card, dispose them or leave it at home and only use it for emergency situations like when you need to pay for medical bills or medicines. Otherwise, leave it at home. That way, you will no be tempted to spend more than you should.

4. Make a grocery list
Going to the grocery or to any store with a set of products that you will need to buy is a proven effective way to cut spending. With an already set items to buy, you will not be tempted to get things that you do not really need. This is especially true if you are one of those people who have the habit of unconsciously spending money on products that are not necessary. And even if you get them, the item not being in your list will make you stop and think about the purchase before you make them.

These may be simple ways towards debt management and you can sure that they are effective!

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Consolidating Your Debt

Consolidating your debt can help you to manage your debt more easily by helping to pay off many creditors at once with the use of another loan.

While this is generally only a transfer of debt from one place to another you can often get better interest rates on these new loans, particularly if you get it through your bank as a personal loan or by using your home as equity and that in itself can save you money.

By consolidating your debt at a lower interest rate you will be able to reduce your debt faster and in the process have the ability to pay off your high interest debts sooner.

It might also give you the capacity to grip superiority of saving money by beginning your loan repayments bygone and occasionally you can get discounts for well-paid debt on time.

Having one loan rather than a number of individual debts can make your budgeting a lot easier and can also reduce the number of debt collectors who could be calling at your door seeking payment of outstanding debts.

If you do decide to consolidate your debt then calculate precisely how much you need, to cover the various debts that you want to clear, and use the new loan to pay off that debt in a second if not you may be tempted to use the money elsewhere and in doing so make even more debt.

It might even be worthwhile having your new consolidated debt payable over a longer term to reduce your monthly payments and help you to focus on other more important or higher interest debts sooner.

The whole idea of debt consolidation is to improve your financial position and you should be looking at ways that you can do this. You must make sure that the interest payable on your new consolidated debt is fixed at a rate that you can budget for as it is too risky getting a variable interest rate loan where the rates could rise and leave you in a more difficult position than you would have been had you not consolidated.

If you are working with a credit counseling agency then discuss your intentions with them beforehand and get their expert advice on what the best solution for you will be.

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Child support

Child support is a high priority debt that you must pay no matter how difficult your financial position might appear to be.

There are a number of reasons why you need to make child support payments top priority. Quite apart from the fact that your children shouldn't have to suffer for your financial dilemma and the necessity for you to provide them with the necessary support to ensure their welfare is looked after, you also need to be aware of the consequences of not paying child support.

Any child support court order that was written or modified after the 31st of December 1993 will automatically be deducted from your wages if you are employed. If you are self-employed or unemployed you are still legally required to make the necessary payments.

Your failure to do so can result in various different actions being taken against you including debt collectors coming to retrieve the necessary funds, getting issued with a court order to recover the outstanding money or in some circumstances you can be put in jail until you make your past due child support payments.

You can see now why Child support is a high priority debt that needs to be paid before many other debts.

There are State Departments that have wide reaching powers to collect the past due money.

If you can't pay this money then contact them as soon as possible and work out an arrangement where you can pay off the outstanding amount by installments and then include this into your budget and prioritize it accordingly.

There are so many other areas that are affected by non-payment of child support that can impact on your ability to clear the rest of your debt including the sale of your assets to cover the cost and liens on your assets to stop you borrowing against them to clear debt.

Once your past due amount exceeds $1000 the debt will be reported to the credit reporting agencies and anyone who accesses your credit reports such as creditors, insurance companies, landlords and so on will see that you have fallen behind in your payments and this certainly doesn't help your cause when trying to sort out your debt problems.

Make it your priority and make your life easier in the process.

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Borrowing Against Your House

There are pro's and con's for borrowing against your home and they all need to be taken into consideration before you proceed with any additional borrowing.

On the one hand the money you can borrow on your home will be of a lower interest rate than most other forms of loans and this can help you to reduce your monthly repayments by using the house money for clearing more expensive debt. With the ability to spread the term of repayment over a much longer period you can generally make quite an impact on reducing your monthly outgoings.

Use your budget to determine how much you are paying on all your outstanding debt and then calculate what the payments would be if they were all consolidated under the one loan against your house. This will show whether that is the best decision to make to help you manage your finances more easily.

Where house prices are rising, you will have increasing equity in the home that will allow you to borrow more against it since the time you originally arranged your mortgage.

The downside of borrowing against your home is where you are already struggling to make your home mortgage payments and by borrowing more you will be putting your house on the line and risk losing it. You certainly don't want the banks to foreclose on your loan and if that looks eminent then it would be unwise to increase your borrowings.

If you calculate that you will not be able to make the additional mortgage payments then it is better to sell off other items that you have borrowed against to reduce debt elsewhere rather than risk losing your home.

It might also be necessary to consider downsizing on your home and buying something of a lower value so you can reduce your mortgage accordingly until you get your feet back on the ground.

Your home is your most valuable asset and you should always do all you possibly can to retain ownership of it.

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Avoiding Debt Consolidation Scams

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Debt Management: Freeing Yourself from Debt

The most common mistake regarding debt accumulation is that people take it lightly and believe that if they keep paying the monthly quota, they will stay afloat. Though it is not the way to deal with debt, this technique may work for a while, but in time, interest charges will grow, and the person will become delinquent. This worse case scenario happens everyday and everywhere in the United States. Even then people still take it lightly. They even get used to the idea of being chased by creditors or any other agencies. Bearing in mind that this kind of situation also affects your health, peace of mind and your current lifestyle; therefore your life changes radically when you are in debt.

After showing you this particular case, a very common occurrence, you may think that in order to stop the harassment from the creditors and the collection agencies, the only possible solution would be to file for bankruptcy. That is when debt management comes into play, as a hero, who saves the day.

Debt management services can be found anywhere in the Internet. However, not all companies can bring a quality in service. But that is a topic that we will deal with in the future. Today, we will focus on the benefits of debt management.

- How does Debt management work? -

Debt management is a debt solution method that has several basic elements. Debt management companies help people deal with debt problems. People can receive debt reduction and the counselors from the debt management service will arrange everything for the person to make a single monthly payment instead of several, saving the client time and effort.

- What are the basic elements of Debt management? -

There are two basic elements within debt management: debt negotiation and debt management itself. But there is a third element we call Debt Guidance. It is a way of showing the debtor where he/she can learn ways of staying debt free in the future. We do not only we help you regain financial stability but also teach you how to sustain it.

- Explaining each basic element from Debt management -

Debt negotiation:
A professional negotiator from the debt management service will contact your creditors and make a deal in order to reduce your current debt as low as possible. Creditors find the use of debt management services engaging. They know that people are interested in paying off the original debt, and that is what concerns creditors the most.
Debt management:
The counselor will set up a payment plan for you that would meet your monthly quotas and will also make sure you do not fall behind on your payments and make them on time. It is very important that you do that when it concerns the full amount. Creditors will see that you are serious about paying your debts off.

During your time in the debt management program, you can also get some professional advice from the counselors in order to learn from your current situation and how to avoid it.

- Benefits from Debt Management -

By applying to the debt management program people will get:
- A reduction of debt that has to be paid monthly
- Improvement in your credit rating and your creditors are open for proposals.
- The collection process stops and also any harassment method.
- The debt payment process goes smoothly, and it is based on the client's income

An important point to keep in mind is to be very careful when choosing a debt management company. You should look out for a company that has a respectable web site and a BBB icon on it. A good way to be sure that when dealing with your money will be serious, and that the debt management company is seriously committed to working for you.

We have different articles of interesting topics and current and former clients’ experiences with our programs. Take a look at the different situations on Debt Management debt related topics that people can fall into and how to keep yourself a debt free person.
Check these links to learn more:

http://www.credit-card-debt-negotiation.com/debtManagement.shtml

http://www.credit-card-debt-negotiation.com/debtFree.shtml

About the Author: Jennifer Siegel is a contributing writer to http://www.credit-card-debt-negotiation.com/ Is currently writing some special articles to guide business on how to manage debt and avoid bankruptcy.
For Free Information on Debt Management and Debt Help Consultation, call toll-free 1-877-850-3328

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