We are all in debt to some extent, but problems arise when we are unable to keep up with repayments. This is an increasingly common situation but the good news is that however bad your debt crisis is you can almost certainly get rid of it yourself with a little advice and guidance.
How Do I Get Rid Of Debt? Not By Borrowing Or Spending More Money
If you are experiencing debt problems and you surf the net to find help, you will be bombarded by websites offering to solve all your problems. Unfortunately the vast majority of the websites you will find are only offering solutions by commercial companies, designed to generate income for them. That is why the only solutions you will normally come across are consolidation loans, secured loans, Debt Management Plans and Individual Voluntary Arrangements. All of these will cost you money and make money for the organisations providing them.
If you think about it logically, how likely is it that the solution to owing too much money is going to be borrowing more money, or paying more money to someone for their services? It is far more likely that such action will either make your long term situation worse, or at least result in it taking longer than it should to get rid of your debt. If you are fortunate enough to find one of the few sources of unbiased debt help out there (advice from someone who isn’t trying to sell you something), you will see that the real solution to debt problems is always the same, and never involves borrowing or spending more money.
How Do I Get Rid Of Debt? Follow These Simple Steps
Nothing is going to magically make your debts disappear. Bankruptcy may result in writing off some unpaid debts, but it is a drastic step to take, with all sorts of long term consequences. There is a fairly straightforward way of dealing with any debt crisis, which just requires some understanding of the steps to take and a little organisation on your part. Only by dealing with debt in this way will you actually take back control of your finances for yourself, and reduce the likelihood of such a situation recurring in the future.
The basic procedure is to make sure your creditors understand your situation, then take steps to reach agreements with them all to pay back only what you really can afford. The steps you go through in order to achieve this are set out below.
How Do I Get Rid Of Debt? Contact Your Creditors
You can’t expect any sympathy or understanding from the people you owe money to unless they are aware of your situation. You must write to them all to explain your situation and assure them that you are trying to deal with it. Tell them exactly why you are in the situation you are in, which could be something specific such as redundancy to marriage breakdown, or just that you allowed your debts to build out of control. You should also ask each creditor to confirm all the details of exactly what you owe them, so that you have an accurate and up to date idea of each debt. Templates you can use to draft creditors letters are available online.
How Do I Get Rid Of Debt? Prioritise Your Creditors
When you have a clear idea of each creditor and what money you owe, the next thing you need to do is to split your creditors into two groups. This exercise is about deciding which creditors are the most important ones to deal with. Each of your creditors must fall into one of two groups – Priority Creditors or Secondary Creditors.
Your priority creditors are the ones where there are potentially serious consequences if you do not repay them. Examples might include your mortgage or a loan secured on your home, unpaid income tax, child maintenance or council tax. These are all areas where non payment can result in actions such as losing your home, imprisonment or having your assets seized by bailiffs.
Your secondary creditors are basically everything else. Secondary debts might include unsecured loans, credit card debts, bank overdrafts or money owed to catalogues.
How Do I Get Rid Of Debt? Create A Financial Statement
You are going to be trying to negotiate settlements with your creditors soon, and you will not be able to do this effectively unless you can show them clearly how much money you have and what you can afford to pay. You therefore need to create a Personal Financial Statement, which is basically just a detailed list showing all your income each month and all the things you have to pay out each month.
You can print off a Personal Financial Statement Form online to help make sure you don’t miss anything off. You will need to decide whether you break it down into weekly or monthly figures, but stick to either one of the other. At this stage you should only include your priority creditors on your financial statement, leaving off all your secondary debtors. Do remember to include any other essential living costs, however, such as vehicle or travel costs, insurances, etc.
Remember to be realistic and accurate with your figures, as all your creditors are going to be looking at and checking these. Your financial statement should show you what (if anything) you have left each month after paying your priority creditors. This is the amount you have to share among your secondary creditors.
How Do I Get Rid Of Debt? Make Offers To Your Creditors
This is the all important stage that your other work has been leading up to. You now need to contact your creditors to make offers and negotiate repayments that are within your ability to pay. Contact your priority creditors first, to make an offer of payment towards any arrears you have accumulated. Do this by starting with the most serious debt first (serious in terms of the consequences of not paying, not how much you owe). Don’t offer all your spare income as you need to share it out. Include a copy of your financial statement with your letter. As you get agreement for each creditor, build that into your financial statement and keep updating it.
You then need to start negotiating with your secondary creditors. It is worth trying to see if they will write the debt off to start with, especially if your financial statement demonstrates that you have no spare income. Assuming you do have some spare income after dealing with your priority creditors, the fairest thing to do is to share it out proportionately between your secondary creditors. This means sharing out your money in proportion to the amount of money owed, rather than giving the same amount to everyone, irrespective of the size of the debt. Help is available online with how to work this out.
Bearing in mind that all your creditors will see your financial statement and therefore know what you are paying other people, this system of sharing it out is by far the easiest to defend and justify.
How Do I Get Rid Of Debt – Conclusions
That is basically it as far as the main approach to dealing with any debt is concerned. Clearly there is more detail around these various steps, but that is beyond the scope of this article, which is just intended to provide you with the main outline approach. I hope this helps to show that any debt can be tackled most effectively by dealing with it directly yourself, rather than perpetuating the cycle of debt by borrowing more money.
For a detailed step by step guide to getting rid of debt by negotiating with your creditors, visit the author's debt UKUS website.
Tuesday 9 June 2009
Monday 8 June 2009
Online Gambling Debts – How To Deal With The Causes and Effects of Online Gambling Debts
One thing there is no shortage of on the internet is opportunities to gamble. We are spoilt for choice, whether your fancy is for betting on sports, playing virtual card games or bingo. One of the things that makes online gambling so potentially dangerous is that it is easily available for 24 hours a day. The real danger comes when you combine this factor with the fact that it is so easy to feel detached from the reality of money spent online. Gradually racking up a debt online does not feel the same as handing over hard earned cash from our wallet, so it is that much easier to lose track of how your online spending is mounting up.
For these reasons, debt problems from online gambling are on the increase. In this article I hope to clarify some of the legal issues around online gambling, as well as providing some advice on dealing with the underlying problem and the debts that result from it.
Legal Issues Around Online Gambling Debts
When we talk about debt from online gambling it is important to be clear about the nature of the debt, because who the money is owed to does make a difference. People are often unsure about the legality of debts from online gambling. In the UK you can gamble legally on credit and incur a debt, but this debt is not then enforceable through the law.
However, there is an important point to make here, which is that this only applies when you are using credit extended by the company offering the gambling (casino, bookie, etc). If you use a credit card company to pay for online gambling, that is a legally enforceable debt the same as it would be in any other circumstance, because you have borrowed money from the credit card company, not the casino. It is now against the law in the US to use a credit card to pay for online gambling.
You will find that many credit cards will regard a payment to an online gambling website as a cash advance. This is then clearly borrowing money from the card company and the debt you incur can be pursued through legal action. If you do use a credit card to pay for online gambling this way, you should be aware that cash advances on credit cards are almost always charged at a much higher rate of interest than normal credit for purchases.
How To Deal With Online Gambling Debts
In dealing with online gambling debts, there are two separate issues to tackle. One is the debt itself, and the other is the habit of gambling that led to the debt. Even if the debt is dealt with, it is likely to build up again if the root cause is not tackled too. Let us first consider the problem of paying off the debt.
The principles for tackling debt are nearly always the same, irrespective of the causes of the debt. To permanently deal with debt you should not be considering borrowing more money or paying anyone to deal with your debt for you. These courses of action are likely to deepen your debt in the long run.
With a little advice, you can deal with your debts yourself, by contacting your creditors and agreeing terms for repayment that you can afford. There is clearly more to it than that, but it is beyond the scope of this particular article. The process is straightforward and allows you to take back control of your finances.
Factors Leading To Online Gambling Debts
It may help to have an understanding of why some people can become addicted to online gambling. The following are often contributory factors:
Gambling can be thrilling, leading to an adrenalin rush and feelings that we want to recreate time and again.
Many addictive gamblers think that they can win money and that this will solve all their other problems. It actually just leads to more problems by creating debt, which can then make it seem even more important to win the money, creating a vicious circle.
Addiction to gambling can actually be a mental disorder, which can lead to a compulsive need to gamble.
Being addicted to online gambling is often associated with other personal difficulties, including depression and stress.
Online Gambling Debts - The Warning Signs
You may have a problem if you can answer yes to any of the following questions:
When you are not gambling, do you think about gambling and how you are going to get back to it?
Have you ever missed work because of online gambling?
Do you feel the need to gamble again after winning or losing?
Is the length of time you spend on gambling getting longer and have you ever spent longer online than you thought you had?
Are you secretive about your gambling with family or friends and do you dislike other people bringing it up?
Practical Steps To Tackle Online Gambling Addiction
If you think you may have a problem with online gambling, here are a few simple steps you can take to begin to reduce or stop the habit:
Be open with friends and family and seek help with the problem.
Cancel any accounts you have with websites for online gambling.
Consider using software that blocks your access to online gambling websites.
Keep a proper, ongoing record of everything you spend – take steps to bring home the fact that the money you are using is real.
Read about how to deal with gambling debt here.
For these reasons, debt problems from online gambling are on the increase. In this article I hope to clarify some of the legal issues around online gambling, as well as providing some advice on dealing with the underlying problem and the debts that result from it.
Legal Issues Around Online Gambling Debts
When we talk about debt from online gambling it is important to be clear about the nature of the debt, because who the money is owed to does make a difference. People are often unsure about the legality of debts from online gambling. In the UK you can gamble legally on credit and incur a debt, but this debt is not then enforceable through the law.
However, there is an important point to make here, which is that this only applies when you are using credit extended by the company offering the gambling (casino, bookie, etc). If you use a credit card company to pay for online gambling, that is a legally enforceable debt the same as it would be in any other circumstance, because you have borrowed money from the credit card company, not the casino. It is now against the law in the US to use a credit card to pay for online gambling.
You will find that many credit cards will regard a payment to an online gambling website as a cash advance. This is then clearly borrowing money from the card company and the debt you incur can be pursued through legal action. If you do use a credit card to pay for online gambling this way, you should be aware that cash advances on credit cards are almost always charged at a much higher rate of interest than normal credit for purchases.
How To Deal With Online Gambling Debts
In dealing with online gambling debts, there are two separate issues to tackle. One is the debt itself, and the other is the habit of gambling that led to the debt. Even if the debt is dealt with, it is likely to build up again if the root cause is not tackled too. Let us first consider the problem of paying off the debt.
The principles for tackling debt are nearly always the same, irrespective of the causes of the debt. To permanently deal with debt you should not be considering borrowing more money or paying anyone to deal with your debt for you. These courses of action are likely to deepen your debt in the long run.
With a little advice, you can deal with your debts yourself, by contacting your creditors and agreeing terms for repayment that you can afford. There is clearly more to it than that, but it is beyond the scope of this particular article. The process is straightforward and allows you to take back control of your finances.
Factors Leading To Online Gambling Debts
It may help to have an understanding of why some people can become addicted to online gambling. The following are often contributory factors:
Gambling can be thrilling, leading to an adrenalin rush and feelings that we want to recreate time and again.
Many addictive gamblers think that they can win money and that this will solve all their other problems. It actually just leads to more problems by creating debt, which can then make it seem even more important to win the money, creating a vicious circle.
Addiction to gambling can actually be a mental disorder, which can lead to a compulsive need to gamble.
Being addicted to online gambling is often associated with other personal difficulties, including depression and stress.
Online Gambling Debts - The Warning Signs
You may have a problem if you can answer yes to any of the following questions:
When you are not gambling, do you think about gambling and how you are going to get back to it?
Have you ever missed work because of online gambling?
Do you feel the need to gamble again after winning or losing?
Is the length of time you spend on gambling getting longer and have you ever spent longer online than you thought you had?
Are you secretive about your gambling with family or friends and do you dislike other people bringing it up?
Practical Steps To Tackle Online Gambling Addiction
If you think you may have a problem with online gambling, here are a few simple steps you can take to begin to reduce or stop the habit:
Be open with friends and family and seek help with the problem.
Cancel any accounts you have with websites for online gambling.
Consider using software that blocks your access to online gambling websites.
Keep a proper, ongoing record of everything you spend – take steps to bring home the fact that the money you are using is real.
Read about how to deal with gambling debt here.
Tuesday 2 June 2009
Can a Credit Card Company Sue You? - Discover What Happens If You Are Taken to Court
If you are in debt to one or more credit card companies and are wondering if they can sue you, the sad news is that they can indeed. As can anyone that you legitimately owe money to. However, the fact that they can sue you does not necessarily mean that they will wish to. That decision depends on many factors. What they are interested in is getting their money back from you, or as much of it as they possibly can. They will choose the course of action that they think is going to get them the best result.
When they are deciding whether to sue you for the debt or not, they will weigh up things like how much you owe, whether you are working, how long you have lived in your current home, how old you are and how much it will cost them to go to court to sue you.
They look at these things because they will help them to build up a picture of how capable you are of paying back the money, or how likely you are to do a runner. Someone who has a job and has been in the same house for some years is far less likely to disappear than someone unemployed who has moved around a lot. Similarly, if the information suggests that you probably do have enough money to pay and are just choosing not to, they are quite likely to sue you.
Can A Credit Card Company Sue You - Suing For Debt In The UK
The details of legal processes obviously vary from country to country, so the advice in this article relates specifically to the UK. The general process of being sued for debt in the US is very similar. If you receive a Default Notice from the credit card company, the first thing you need to do is take proper legal advice. Such a notice means that the company can take you to court to sue you.
It is possible at this point to apply for something called a Time Order, which can stop the interest and penalties being added to your debt until the court action is over. It may even result in setting a lower amount for your repayments. Before you apply for a Time Order you should approach the credit card company with an offer of payment.
It is advisable to include a personal financial statement which shows your exact situation and demonstrates how the amount you are offering to pay really is all you can afford. If the credit card company turn down your offer, that is when you should approach the court to get a Time Order, and the court will make a decision about how reasonable your repayment offer was.
The name of the mechanism used by the credit card company to sue you for money owed is a Money Only Claim and the company will do this through the County Court. If the credit card company do decide to sue you, you will receive a form from the court, which you need to complete and return. At this point you really should take legal advice.
If this process is successful and the court upholds the credit card company's case, the result will be a County Court Judgement against you. What a County Court Judgement actually means is that the court will look at your finances and put a plan in place for you to repay your debt. They will decide how much you can afford and will set your payment amounts. In theory this should not be set at a level you really cannot afford.
Can A Credit Card Company Sue You - Make Sue You Comply With The Judgement
Once the court has made a judgement against you and ordered you to pay a certain amount back each month, it really is important that you stick to this order, because if you do not, the consequences can get a whole lot more serious. Defaulting on the payment plan set by the court can mean that the credit card company are then allowed to use bailiffs to take your assets and sell them to pay off your debt.
Other possible nasty consequences are further court action to make an Attachment of Earnings, meaning that money is taken directly from your salary. Failure to comply with this order gets more serious again, and includes possibly being sent to prison.
Can A Credit Card Company Sue You - Final Thoughts
The initial process and consequence of having a credit card company sue you for debt are not actually too horrific. The trick is to avoid letting things get that bad to start with, and if it is too late to avoid that, be absolutely sure that you do not default on the payments set by the court.
There is practically no debt problem that you cannot deal with yourself with the right advice. Dealing with debt definitely does not mean borrowing more money or spending money to pay someone else to deal with your problem. The real long term solution is always the same - make sure you let your creditors know your situation, prioritise your debts, understand your exact financial situation and negotiate with your creditors to pay off the debts at a rate you can actually afford.
Read advice and guidance on credit card debt settlement here.
When they are deciding whether to sue you for the debt or not, they will weigh up things like how much you owe, whether you are working, how long you have lived in your current home, how old you are and how much it will cost them to go to court to sue you.
They look at these things because they will help them to build up a picture of how capable you are of paying back the money, or how likely you are to do a runner. Someone who has a job and has been in the same house for some years is far less likely to disappear than someone unemployed who has moved around a lot. Similarly, if the information suggests that you probably do have enough money to pay and are just choosing not to, they are quite likely to sue you.
Can A Credit Card Company Sue You - Suing For Debt In The UK
The details of legal processes obviously vary from country to country, so the advice in this article relates specifically to the UK. The general process of being sued for debt in the US is very similar. If you receive a Default Notice from the credit card company, the first thing you need to do is take proper legal advice. Such a notice means that the company can take you to court to sue you.
It is possible at this point to apply for something called a Time Order, which can stop the interest and penalties being added to your debt until the court action is over. It may even result in setting a lower amount for your repayments. Before you apply for a Time Order you should approach the credit card company with an offer of payment.
It is advisable to include a personal financial statement which shows your exact situation and demonstrates how the amount you are offering to pay really is all you can afford. If the credit card company turn down your offer, that is when you should approach the court to get a Time Order, and the court will make a decision about how reasonable your repayment offer was.
The name of the mechanism used by the credit card company to sue you for money owed is a Money Only Claim and the company will do this through the County Court. If the credit card company do decide to sue you, you will receive a form from the court, which you need to complete and return. At this point you really should take legal advice.
If this process is successful and the court upholds the credit card company's case, the result will be a County Court Judgement against you. What a County Court Judgement actually means is that the court will look at your finances and put a plan in place for you to repay your debt. They will decide how much you can afford and will set your payment amounts. In theory this should not be set at a level you really cannot afford.
Can A Credit Card Company Sue You - Make Sue You Comply With The Judgement
Once the court has made a judgement against you and ordered you to pay a certain amount back each month, it really is important that you stick to this order, because if you do not, the consequences can get a whole lot more serious. Defaulting on the payment plan set by the court can mean that the credit card company are then allowed to use bailiffs to take your assets and sell them to pay off your debt.
Other possible nasty consequences are further court action to make an Attachment of Earnings, meaning that money is taken directly from your salary. Failure to comply with this order gets more serious again, and includes possibly being sent to prison.
Can A Credit Card Company Sue You - Final Thoughts
The initial process and consequence of having a credit card company sue you for debt are not actually too horrific. The trick is to avoid letting things get that bad to start with, and if it is too late to avoid that, be absolutely sure that you do not default on the payments set by the court.
There is practically no debt problem that you cannot deal with yourself with the right advice. Dealing with debt definitely does not mean borrowing more money or spending money to pay someone else to deal with your problem. The real long term solution is always the same - make sure you let your creditors know your situation, prioritise your debts, understand your exact financial situation and negotiate with your creditors to pay off the debts at a rate you can actually afford.
Read advice and guidance on credit card debt settlement here.
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