In these financially difficult times, more and more people are finding themselves with a serious burden of consumer debt. When times are hard many people turn to credit as a way of keeping going, but all too often the amount of debt gradually rises to a point where it becomes impossible to repay it. This is a very common situation and one which can cause a great deal of stress and anxiety as creditors chase their money and the interest charges just keep on growing.
The good news is that there is no debt problem that is so serious you cannot get rid of it eventually. The best solution for you will depend on your situation, but in general there are a few basic options. Most of us are in debt to a greater or lesser extent, but this article is about the times when it gets out of control and becomes a serious problem. The solutions I will cover are therefore designed for fairly serious amounts of debt.
The first option is a way of restructuring all your debts to come up with a plan that allows you to make a single monthly payment which covers all your debts. This is called debt management and is also known as debt consolidation in the United States. This is not the same thing as a debt consolidation loan, as debt management does not involve any further borrowing. These informal arrangements are known as debt management plans or debt payment plans.
The basic principle is that you use a debt management company to deal with your creditors on your behalf, and they negotiate with them to agree new repayment terms that bring the payments within your means. They do this for all of your creditors and you end up making one single payment to the debt management company, who then pay your creditors for you.
To take part in a debt management plan you need to have quite a lot of unsecured debt, usually to several different companies. Unsecured debts are things like credit cards, unpaid bills, etc, rather than mortgages or secured loans. You also need a source of income and must have some money left over each month after paying your essential household costs.
For those with even more serious debt problems, who cannot afford the monthly payments for a debt management plan, there are still better alternatives than bankruptcy. In the US the alternative is known as debt settlement or debt negotiation. This is a process in which a specialist company will negotiate with your creditors to agree settlement terms for your debts. This will normally mean reaching agreements which involve having a large part of your debt written off, in return for a lump sum payment. Negotiated agreements will vary a lot, depending on the nature of the debts and the creditors involved.
For UK citizens the equivalent to debt settlement is an IVA, or Individual Voluntary Arrangement. This is a scheme set up by the government and provides a less drastic alternative to bankruptcy. These are formal agreements which normally last for five years, and can result in getting up to 75% of your debts written off. When your debts are so serious that your only choice appears to be bankruptcy, then debt settlement or an IVA can provide a far more preferable option, without any of the publicity, stigma or lasting consequences that bankruptcy brings with it.
A great many companies now offer debt management, debt settlement and IVAs, and it is very important to take care with how you go about deciding which one to work with. You should be aware that many companies only came into existence to take advantage of the current financial situation, and many care much more about making money for themselves than they do about finding the best solution for people in a debt crisis.
Always use well established and reputable companies that have a record of having successfully helped many people out of debt already. Even with good companies, the proposals will vary a lot, so you should approach at least two or three and compare their offers. This will also give you a chance to see which ones you feel comfortable with in terms of the people you will need to deal with.
Read recommendations for reputable debt management companies in the UK and US.
Monday 30 November 2009
Saturday 28 November 2009
Can A Collection Agency Sue For Debt - Strategies To Help Avoid Being Sued For Debt
Having a debt collection agency phoning you up every hour of the day is bad enough, but being sued by them is something altogether more serious. In most cases, a collection agency will be chasing a debt on behalf of the company that the money is owed to. The debt is still owed to the original company and the agency is just working on a commission basis.
In these circumstances the threat of taking you to court may just be intended to worry you into paying up. However, you should be aware that you can actually be sued for a debt you have not paid. While the legal action has to be on behalf of whoever the debt is actually owed to, that company may be asking the debt collection agency to move forward with the legal proceedings on their behalf.
It is also quite possible that a collection agency might sue you directly, and if this happens, it almost certainly means that they have bought the debt from the original organisation that you owed the money to. In this situation you then legally owe the money to the debt collection agency, not the original company you borrowed the money from.
Buying debts is not at all uncommon, and happens a lot. The process is usually that the collection agency will pay a fraction of the total value of the debt to the company, then try to recover as much of it as they can. This allows the original holder of the debt to get rid of it while getting something back for it rather than nothing. The collection agency then have to recover as much as they can above the amount they paid for it, otherwise they do not make any money.
So depending on the circumstances, either the original company that you owe money to, or a debt collection agency that you have never heard of, can sue you to recover a debt. They will do this if they think it is in their interests and likely to be the course of action that gets them the most money back. Being sued and having a court order against you is definitely something to be avoided if at all possible, and there are options available to you that can help to prevent this.
When you are in serious debt and being threatened with court action, your choices are rather limited and many people start thinking about bankruptcy, which is a very serious decision. Another, far less drastic option, however, is to contact a professional debt advisor about the possibility of a debt management plan. These are also known as debt consolidation plans or programs and are available in both the US and UK. This should not be confused with a debt consolidation loan, which means borrowing more money. These plans involve no further borrowing.
When a debt management plan is set up, an experienced negotiator will deal with your creditors on your behalf, to agree new terms for paying back what you owe. It normally means freezing or reducing interest charges or any late payment penalties and setting up new repayment terms which make it possible for you to pay the debt back. The result of this is that you only have one affordable payment to find every month, and your creditors stop hassling you as they have to go through the debt management company instead.
If you do choose to explore this option further, take care to approach at least two companies to compare offers, as they do vary a lot. Be careful about which companies you approach as there are an awful lot to choose from, and unfortunately some are much better at taking hefty fees from you than they are at negotiation good deals on your behalf. It is very important to deal only with reputable and well established companies who have a track record of having successfully helped many other people.
Read reviews and recommendations for the best debt management companies in the UK and US.
In these circumstances the threat of taking you to court may just be intended to worry you into paying up. However, you should be aware that you can actually be sued for a debt you have not paid. While the legal action has to be on behalf of whoever the debt is actually owed to, that company may be asking the debt collection agency to move forward with the legal proceedings on their behalf.
It is also quite possible that a collection agency might sue you directly, and if this happens, it almost certainly means that they have bought the debt from the original organisation that you owed the money to. In this situation you then legally owe the money to the debt collection agency, not the original company you borrowed the money from.
Buying debts is not at all uncommon, and happens a lot. The process is usually that the collection agency will pay a fraction of the total value of the debt to the company, then try to recover as much of it as they can. This allows the original holder of the debt to get rid of it while getting something back for it rather than nothing. The collection agency then have to recover as much as they can above the amount they paid for it, otherwise they do not make any money.
So depending on the circumstances, either the original company that you owe money to, or a debt collection agency that you have never heard of, can sue you to recover a debt. They will do this if they think it is in their interests and likely to be the course of action that gets them the most money back. Being sued and having a court order against you is definitely something to be avoided if at all possible, and there are options available to you that can help to prevent this.
When you are in serious debt and being threatened with court action, your choices are rather limited and many people start thinking about bankruptcy, which is a very serious decision. Another, far less drastic option, however, is to contact a professional debt advisor about the possibility of a debt management plan. These are also known as debt consolidation plans or programs and are available in both the US and UK. This should not be confused with a debt consolidation loan, which means borrowing more money. These plans involve no further borrowing.
When a debt management plan is set up, an experienced negotiator will deal with your creditors on your behalf, to agree new terms for paying back what you owe. It normally means freezing or reducing interest charges or any late payment penalties and setting up new repayment terms which make it possible for you to pay the debt back. The result of this is that you only have one affordable payment to find every month, and your creditors stop hassling you as they have to go through the debt management company instead.
If you do choose to explore this option further, take care to approach at least two companies to compare offers, as they do vary a lot. Be careful about which companies you approach as there are an awful lot to choose from, and unfortunately some are much better at taking hefty fees from you than they are at negotiation good deals on your behalf. It is very important to deal only with reputable and well established companies who have a track record of having successfully helped many other people.
Read reviews and recommendations for the best debt management companies in the UK and US.
Tuesday 24 November 2009
Best Debt Management Companies
Debt management is a process that has helped thousands of people to get rid of debt and live a normal, debt free life once again. It is also sometimes known as debt consolidation in the US, though this should not be confused with debt consolidation loans, which are entirely different. Debt management does not involve borrowing any money. The actual arrangement which is set up is known as a Debt Management Plan, or program, and these are arranged by specialist companies who are experienced in helping people deal with serious debt problems.
When you are in the midst of a debt crisis, there is a danger that you can turn to the first organisation you come across who says they can help you. While you may get lucky and hit upon a reputable organisation, it is statistically much easier to get it wrong. There are a lot of financial companies out there, which can seem like a good thing in terms of healthy competition, but the unfortunate fact is that a good proportion of them do not have your interests at the top of their agenda. It is all too easy to be taken advantage of when you are in desperate circumstances and some of these companies do just that.
It is perfectly right and proper that a debt advisor gets paid for providing a useful service. The good thing about the best debt management companies is that the fees you pay them are well worth the money and still leave you much better off that you would have been without their help. Less scrupulous companies, however, will not be transparent about their fees and you can end up paying far more overall than you would have on your own.
The first thing you need to do if you are considering approaching a debt management company is to have a general understanding of the process, so you are less likely to be misled and you will be more aware of what questions you ought to ask. When you set up a debt plan, your advisor will take over all dealings with your creditors, and contact them on your behalf to negotiate new repayment terms. This usually involves freezing or reducing interest charges and late payment fees. Under the new agreements, you just pay one monthly fee to the management company until the end of the program.
The main advantages are that your creditors should stop bothering you as they will be dealt with by the debt advisor and you only have one manageable monthly payment to think about. With the best debt management companies you will also get expert help with preparing a financial statement, which is important in convincing your creditors that you can't afford to pay them back at the original rates. Another advantage of debt management, compared to some of the alternative debt solutions, is that it is an informal agreement, so if your circumstances change, you can change or cancel the agreement.
To make sure you take full advantage of the positive things a debt management plan can offer, it is very important to select one of the best debt management companies. You should always approach at least two companies, so that you can compare what they offer you. You also need to feel comfortable with the individuals from the debt management company, as you will have to talk to them about quite personal information and will be dealing with them for quite some time. Try to avoid companies that are not well established and follow personal recommendations where possible. Making contact is extremely easy and usually done online in the first instance.
Read reviews and recommendations for reputable debt management companies in the UK and US.
When you are in the midst of a debt crisis, there is a danger that you can turn to the first organisation you come across who says they can help you. While you may get lucky and hit upon a reputable organisation, it is statistically much easier to get it wrong. There are a lot of financial companies out there, which can seem like a good thing in terms of healthy competition, but the unfortunate fact is that a good proportion of them do not have your interests at the top of their agenda. It is all too easy to be taken advantage of when you are in desperate circumstances and some of these companies do just that.
It is perfectly right and proper that a debt advisor gets paid for providing a useful service. The good thing about the best debt management companies is that the fees you pay them are well worth the money and still leave you much better off that you would have been without their help. Less scrupulous companies, however, will not be transparent about their fees and you can end up paying far more overall than you would have on your own.
The first thing you need to do if you are considering approaching a debt management company is to have a general understanding of the process, so you are less likely to be misled and you will be more aware of what questions you ought to ask. When you set up a debt plan, your advisor will take over all dealings with your creditors, and contact them on your behalf to negotiate new repayment terms. This usually involves freezing or reducing interest charges and late payment fees. Under the new agreements, you just pay one monthly fee to the management company until the end of the program.
The main advantages are that your creditors should stop bothering you as they will be dealt with by the debt advisor and you only have one manageable monthly payment to think about. With the best debt management companies you will also get expert help with preparing a financial statement, which is important in convincing your creditors that you can't afford to pay them back at the original rates. Another advantage of debt management, compared to some of the alternative debt solutions, is that it is an informal agreement, so if your circumstances change, you can change or cancel the agreement.
To make sure you take full advantage of the positive things a debt management plan can offer, it is very important to select one of the best debt management companies. You should always approach at least two companies, so that you can compare what they offer you. You also need to feel comfortable with the individuals from the debt management company, as you will have to talk to them about quite personal information and will be dealing with them for quite some time. Try to avoid companies that are not well established and follow personal recommendations where possible. Making contact is extremely easy and usually done online in the first instance.
Read reviews and recommendations for reputable debt management companies in the UK and US.
Monday 23 November 2009
Where To Borrow Money When The Banks Won't Loan It To You
A bad credit report can be a real stumbling block, and extremely inconvenient at a time when you desperately need to borrow money. The vast majority of lenders dealing with personal loans and other forms of credit are very choosy these days about who they lend money to. This means that it does not take much to be rejected for a loan, and you do not want too many rejections, because that hurts your credit score even more.
So what is the answer when you need cash but you have bad credit? The good news is that there certainly is an answer, though it does depend on how much money you want and how long you want it for. The way to get round a bad credit report is to go for a type of lending where the credit report is of little importance. Your credit report matters to the mainstream lenders because they are looking at a long term risk and if you stop paying there is not that much they can do about it except sue you.
There are two options open to you, one is for small amounts of cash for a short time, and the other is for large amounts of money, paid back over a longer period of time. For large amounts of money the only option you have is secured borrowing. This is only an option if you have your own home and a mortgage. It involves taking out a loan and using your home as security. In other words your home and the loan are legally bound together, and in the worst case scenario, the lender can arrange to get their money back by selling your house if you default on their payments.
The other, much easier and less drastic step is for cash advance, or ‘payday’ loans. These are widely available in both the UK and US now and are a hugely popular form of short term, and most of all fast, borrowing. The best companies can have cash in your bank account the same day as you apply online, sometimes within an hour! The principle is that you get a cash advance to help you over until you next get paid, which is when you must immediately pay it back.
The beauty of payday loans is that the lenders are generally not interested in your credit report, provided you can show that you have a job and a bank account. Because the amounts being borrowed are relatively small, the lenders know that as soon as you get paid, there will be enough money in your account to cover the debt. That is partly why the process is so quick - the best direct online lenders will give you an answer straight away, with money in your account soon afterwards.
One word of warning with payday loans though. They should not be used to try to deal with ongoing debt problems and they must always be paid back on time. They are designed for occasional unexpected costs and should not be used to plug gaps in your finances that will still be there next month. Fees for payday loans are perfectly reasonable for the short periods for which they are agreed, but as soon as you miss a payment and extend the period of borrowing, the interest will mount up at a startling rate. This is exacerbated by the many less reputable payday lenders who apply ridiculous penalty charges, making it difficult to ever pay the loan off.
There are many payday lenders to choose from, but take are to check rates with at least two or three, and always use well established and reputable companies.
Find reviews and recommendations for the best direct payday lenders in the US and UK.
So what is the answer when you need cash but you have bad credit? The good news is that there certainly is an answer, though it does depend on how much money you want and how long you want it for. The way to get round a bad credit report is to go for a type of lending where the credit report is of little importance. Your credit report matters to the mainstream lenders because they are looking at a long term risk and if you stop paying there is not that much they can do about it except sue you.
There are two options open to you, one is for small amounts of cash for a short time, and the other is for large amounts of money, paid back over a longer period of time. For large amounts of money the only option you have is secured borrowing. This is only an option if you have your own home and a mortgage. It involves taking out a loan and using your home as security. In other words your home and the loan are legally bound together, and in the worst case scenario, the lender can arrange to get their money back by selling your house if you default on their payments.
The other, much easier and less drastic step is for cash advance, or ‘payday’ loans. These are widely available in both the UK and US now and are a hugely popular form of short term, and most of all fast, borrowing. The best companies can have cash in your bank account the same day as you apply online, sometimes within an hour! The principle is that you get a cash advance to help you over until you next get paid, which is when you must immediately pay it back.
The beauty of payday loans is that the lenders are generally not interested in your credit report, provided you can show that you have a job and a bank account. Because the amounts being borrowed are relatively small, the lenders know that as soon as you get paid, there will be enough money in your account to cover the debt. That is partly why the process is so quick - the best direct online lenders will give you an answer straight away, with money in your account soon afterwards.
One word of warning with payday loans though. They should not be used to try to deal with ongoing debt problems and they must always be paid back on time. They are designed for occasional unexpected costs and should not be used to plug gaps in your finances that will still be there next month. Fees for payday loans are perfectly reasonable for the short periods for which they are agreed, but as soon as you miss a payment and extend the period of borrowing, the interest will mount up at a startling rate. This is exacerbated by the many less reputable payday lenders who apply ridiculous penalty charges, making it difficult to ever pay the loan off.
There are many payday lenders to choose from, but take are to check rates with at least two or three, and always use well established and reputable companies.
Find reviews and recommendations for the best direct payday lenders in the US and UK.
Tuesday 17 November 2009
Get Rid Of Debt Plans - Information and Advice On Debt Payment Plans
You may have heard of special plans to help people get rid of debt, and indeed there are such things which help thousands of people in the US and UK every year. The process is known as debt management and many specialist companies offer plans and programs to help people deal with serious debt problems.
These 'get rid of debt plans' are used when people get overwhelmed by debts. Such plans can only be used for what are known as unsecured debts, which are debts that are not secured against some asset, such as your house. A mortgage, for example, is a secured debt as it is legally tied to your home, so that cannot be included in a debt management plan. The majority of debts dealt with through these debt plans are for credit cards, but they can include personal loans, store cards, bank overdrafts, catalogue debts, etc.
To take advantage of a debt management plan you need to apply to a professional debt management company, who will put you in touch with a debt advisor to go through your finances with you. They will then be able to provide you with possible solutions to suit your particular circumstances.
A debt plan will involve the debt advisor negotiating with all the people you owe money to on your behalf. Your creditors should all stop chasing you and deal with the debt management company, which can be a huge relief in itself. The aim will be to agree new repayment terms with your creditors, so that you can repay the debts at a rate you can afford. This usually involves interest and other charges being at least frozen, and often reduced. The end result is that you just have to make one, lower monthly payment to the debt advisor, who then passes it on among your creditors.
Using this sort of plan to get rid of debt has the advantage of being an informal arrangement, so if your circumstances should alter, you can make changes to your payments, or even stop the plan and make other arrangements. Using expert negotiators to work on your behalf can be particularly useful if you are not confident about being able to negotiate good deals on your own.
There are charges involved in debt management, but provided you are using a reputable and effective company, these will be more than outweighed by the benefits. The better companies will work with you to produce a financial statement, to get a clear understanding of your precise financial situation. They may even provide assistance and guidance on how to manage your money and budgeting.
To take advantage of these 'get rid of debt plans' you need to have a considerable amount of debt, and a steady source of income, so that you can keep up with the monthly payments. If it is found when you work out your finances that you just don’t have enough money left over to make the payments required, you may be more suited to debt settlement, which involves negotiating for a proportion of your debts to be written off. Debt settlement is common in the US, but in the UK the equivalent plan is an IVA (Individual Voluntary Arrangement), which can write off up to 75% of your debts.
Whichever kind of plan you choose to pursue, it is of the utmost importance to be aware that there are a great many debt management companies that you can approach, but they will not all give you the same result. The problem is that for every reputable and respectable company there is another whose only aim is to take money from those people who can least afford it. You are going to be making regular payments to the debt management company you choose, so it is vital that you can trust them.
So when you come to decide who to approach for a plan to help you get rid of debt, do not search randomly; follow personal recommendations, check that companies are well established and that they have a solid record of having already helped many other people.
Read reviews and recommendations for reputable debt management companies in the UK and US.
These 'get rid of debt plans' are used when people get overwhelmed by debts. Such plans can only be used for what are known as unsecured debts, which are debts that are not secured against some asset, such as your house. A mortgage, for example, is a secured debt as it is legally tied to your home, so that cannot be included in a debt management plan. The majority of debts dealt with through these debt plans are for credit cards, but they can include personal loans, store cards, bank overdrafts, catalogue debts, etc.
To take advantage of a debt management plan you need to apply to a professional debt management company, who will put you in touch with a debt advisor to go through your finances with you. They will then be able to provide you with possible solutions to suit your particular circumstances.
A debt plan will involve the debt advisor negotiating with all the people you owe money to on your behalf. Your creditors should all stop chasing you and deal with the debt management company, which can be a huge relief in itself. The aim will be to agree new repayment terms with your creditors, so that you can repay the debts at a rate you can afford. This usually involves interest and other charges being at least frozen, and often reduced. The end result is that you just have to make one, lower monthly payment to the debt advisor, who then passes it on among your creditors.
Using this sort of plan to get rid of debt has the advantage of being an informal arrangement, so if your circumstances should alter, you can make changes to your payments, or even stop the plan and make other arrangements. Using expert negotiators to work on your behalf can be particularly useful if you are not confident about being able to negotiate good deals on your own.
There are charges involved in debt management, but provided you are using a reputable and effective company, these will be more than outweighed by the benefits. The better companies will work with you to produce a financial statement, to get a clear understanding of your precise financial situation. They may even provide assistance and guidance on how to manage your money and budgeting.
To take advantage of these 'get rid of debt plans' you need to have a considerable amount of debt, and a steady source of income, so that you can keep up with the monthly payments. If it is found when you work out your finances that you just don’t have enough money left over to make the payments required, you may be more suited to debt settlement, which involves negotiating for a proportion of your debts to be written off. Debt settlement is common in the US, but in the UK the equivalent plan is an IVA (Individual Voluntary Arrangement), which can write off up to 75% of your debts.
Whichever kind of plan you choose to pursue, it is of the utmost importance to be aware that there are a great many debt management companies that you can approach, but they will not all give you the same result. The problem is that for every reputable and respectable company there is another whose only aim is to take money from those people who can least afford it. You are going to be making regular payments to the debt management company you choose, so it is vital that you can trust them.
So when you come to decide who to approach for a plan to help you get rid of debt, do not search randomly; follow personal recommendations, check that companies are well established and that they have a solid record of having already helped many other people.
Read reviews and recommendations for reputable debt management companies in the UK and US.
Friday 6 November 2009
Free Money To Pay Off Debt - How To Get Rid Of Debt
Being in debt can be a highly stressful experience, not least because it is often impossible to see any way out of it. When your debts build to a certain point it is easy to feel that you are never going to find a way of getting enough money to pay back the amount that you owe. At times like this it is natural to look at whether there may be free money available to help pay off the debt. This idea is sometimes reinforced by adverts which appear to suggest that such funds are readily available for the asking. Unfortunately this is not the case, and suggestions that there could be are deliberately misleading. However, there are several other very real alternatives which can help people to get out of serious debt, some of which can have the same effect as being given a substantial amount of free money.
While no-one is going to literally hand out free money for you to pay off your debts, there are some schemes which have the result of wiping out large portions of your debt, thus producing the same effect as if you had a substantial gift of cash. Such schemes exist in both the US and the UK and are designed to assist people who are experiencing serious debt problems, usually meaning five figure sums. The process is known as debt settlement in the US and the equivalent scheme in the UK is called an IVA. An IVA is an individual voluntary arrangement and involves making a reduced payment for a fixed period of time, after which your remaining debts are written off.
Debt settlement in the US is when experienced negotiators strike deals with your creditors to write off up to 60% of your debt in exchange for a lump sum payment of the remainder. The debt settlement process can take some time, and will usually mean that you stop making payments to creditors and pay what you can into a separate fund, which is then used towards your newly negotiated settlements. The end result should mean that you are debt free within three to five years.
IVAs were intended to provide an alternative to filing for bankruptcy, and as such are only for serious debt problems. When you set up an IVA you agree to make fixed payments to your creditors, for an amount that you can afford, over a fixed period. This period will not normally exceed five years, and at the end of that time your remaining debts are written off. It is therefore possible to get rid of a large proportion of your debt without having to declare bankruptcy, making an IVA an immensely popular option for many people in the UK with serious debt problems. US residents get the same result with debt settlement companies, who achieve the large reductions in the debt through negotiation with creditors.
There is of course a third option available in both the US and UK, which is the debt management plan. These allow you to consolidate all your unsecured debts into a single monthly payment. Please be aware that these are not debt consolidation loans, which just involve borrowing more money to pay off the full amount that you owe on your debts. With the debt management plan, you do not borrow any more money. What you get is the advantage of having experts negotiate with your creditors to agree reduced payments, lower interest rates, waiving of penalty charges, etc, which all bring down the total of what you need to pay out each month.
The difference between a debt management plan and either debt settlement or an IVA, is that debt management does not involve writing off any of the original debt. If you are unable to afford to meet the required payments for a debt management plan, then debt settlement or an IVA is most likely the best answer.
Whichever kind of scheme you are interested in, you need to take care to approach only reputable and well established companies, as there are many who will not only offer poor advice, but leave you in a worse situation than before you started. The safest way is to start with recommended companies that are known to be ethical and which have already helped many other people to get out of debt. Approach at least two or three and then compare what they come up with before making a decision.
Read recommendations for the most reputable debt management companies.
While no-one is going to literally hand out free money for you to pay off your debts, there are some schemes which have the result of wiping out large portions of your debt, thus producing the same effect as if you had a substantial gift of cash. Such schemes exist in both the US and the UK and are designed to assist people who are experiencing serious debt problems, usually meaning five figure sums. The process is known as debt settlement in the US and the equivalent scheme in the UK is called an IVA. An IVA is an individual voluntary arrangement and involves making a reduced payment for a fixed period of time, after which your remaining debts are written off.
Debt settlement in the US is when experienced negotiators strike deals with your creditors to write off up to 60% of your debt in exchange for a lump sum payment of the remainder. The debt settlement process can take some time, and will usually mean that you stop making payments to creditors and pay what you can into a separate fund, which is then used towards your newly negotiated settlements. The end result should mean that you are debt free within three to five years.
IVAs were intended to provide an alternative to filing for bankruptcy, and as such are only for serious debt problems. When you set up an IVA you agree to make fixed payments to your creditors, for an amount that you can afford, over a fixed period. This period will not normally exceed five years, and at the end of that time your remaining debts are written off. It is therefore possible to get rid of a large proportion of your debt without having to declare bankruptcy, making an IVA an immensely popular option for many people in the UK with serious debt problems. US residents get the same result with debt settlement companies, who achieve the large reductions in the debt through negotiation with creditors.
There is of course a third option available in both the US and UK, which is the debt management plan. These allow you to consolidate all your unsecured debts into a single monthly payment. Please be aware that these are not debt consolidation loans, which just involve borrowing more money to pay off the full amount that you owe on your debts. With the debt management plan, you do not borrow any more money. What you get is the advantage of having experts negotiate with your creditors to agree reduced payments, lower interest rates, waiving of penalty charges, etc, which all bring down the total of what you need to pay out each month.
The difference between a debt management plan and either debt settlement or an IVA, is that debt management does not involve writing off any of the original debt. If you are unable to afford to meet the required payments for a debt management plan, then debt settlement or an IVA is most likely the best answer.
Whichever kind of scheme you are interested in, you need to take care to approach only reputable and well established companies, as there are many who will not only offer poor advice, but leave you in a worse situation than before you started. The safest way is to start with recommended companies that are known to be ethical and which have already helped many other people to get out of debt. Approach at least two or three and then compare what they come up with before making a decision.
Read recommendations for the most reputable debt management companies.
Thursday 5 November 2009
Where Can I Borrow Money With Bad Credit
When you need to find out where to borrow money with bad credit it can seem like a very difficult challenge if you do not know where to start looking. Fortunately there are many specialist loan companies that offer products specifically aimed at people with bad credit ratings. Not having good credit will certainly be a problem with most of the mainstream lenders who are providing long term unsecured loans. To be reasonably sure of getting their money back over an extended period of time, they will set the bar quite high in terms of the credit record of the people they are prepared to lend to.
While some companies choose to offer ordinary unsecured personal loans to people with a poor credit history too, they are able to do this by charging the people they do lend to much more in interest. For these loan companies, their chances of losing money are that much higher, so they need to recoup a lot more from each loan to compensate. The irony is that people who have had problems and may perhaps struggle to keep up with repayments end up paying more than someone who can manage the repayments relatively easily.
However, standard personal loans are not the only sort of borrowing available, and there are a couple of options for borrowing money which do not depend on having a perfect credit score. For larger amounts of money, the only way to get round a bad credit rating is to use a homeowner secured loan. What this does is secure the loan against your home, which gives the lender the security they need in order to lend you the money.
This provides the lender with the reassurance of knowing that if you do turn out to be someone who does not keep up with repayments, they have the option of having your house sold off in order to reclaim the money you owe them. This is a very real possibility, so secured loans should not be entered into lightly. In the right circumstances, however, secured loans are a way of getting access to quite substantial amounts of lending, even if your credit record shows problems.
People often borrow money to solve problems of personal debt, and this is usually in the form of a debt consolidation loan. While many consolidation loans are unsecured, there are companies that will offer secured debt consolidation as a way of enabling those who would not pass a credit check to access such a loan.
At the other end of the borrowing spectrum there are payday loans, which again are often available to people with bad credit. A payday loan, or cash advance, is always for a relatively small amount of money, and for a very short period of time. Many of the lenders do not worry about your credit rating because of the short term nature of the loan. You will need to have a steady income to get a payday loan, and the lender just wants to know that you will have enough money coming in from the next time you get paid to pay off their loan. So they are more concerned with checking your employment status than your credit history.
Payday loans are without doubt the fastest way to borrow money. Using a good online direct lender, it is now possible to have cash in your bank account on the same day as you apply. While payday loans can be an extremely useful resource in the right circumstances, it is important to remember that they are not a solution to debt or ongoing money shortages. Use them for one-off unexpected expenses only, or risk getting into more and more debt.
If a bad credit rating is stopping you doing what you would like, it is well worth checking your credit report to make sure there are no mistakes on it, and no out of date information. It is not uncommon for there to be errors, which you can have corrected and quickly improve your rating. You can get a report for free by signing up to a subscription with one of the agencies then cancelling before you have to start paying.
Whether you are looking for a payday lender, consolidation loan or a homeowner secured loan, you should always approach at least two or three companies, as rates and charges vary a lot. There are many companies to choose from in both the US and the UK, and it is important to ensure that you find established and reputable organisations to deal with. There are unfortunately lenders out there that will try to steer you into arrangements that make the most profit for them, rather than finding what is right for you or what you can really afford.
Read recommendations for reputable US and UK direct payday lenders.
While some companies choose to offer ordinary unsecured personal loans to people with a poor credit history too, they are able to do this by charging the people they do lend to much more in interest. For these loan companies, their chances of losing money are that much higher, so they need to recoup a lot more from each loan to compensate. The irony is that people who have had problems and may perhaps struggle to keep up with repayments end up paying more than someone who can manage the repayments relatively easily.
However, standard personal loans are not the only sort of borrowing available, and there are a couple of options for borrowing money which do not depend on having a perfect credit score. For larger amounts of money, the only way to get round a bad credit rating is to use a homeowner secured loan. What this does is secure the loan against your home, which gives the lender the security they need in order to lend you the money.
This provides the lender with the reassurance of knowing that if you do turn out to be someone who does not keep up with repayments, they have the option of having your house sold off in order to reclaim the money you owe them. This is a very real possibility, so secured loans should not be entered into lightly. In the right circumstances, however, secured loans are a way of getting access to quite substantial amounts of lending, even if your credit record shows problems.
People often borrow money to solve problems of personal debt, and this is usually in the form of a debt consolidation loan. While many consolidation loans are unsecured, there are companies that will offer secured debt consolidation as a way of enabling those who would not pass a credit check to access such a loan.
At the other end of the borrowing spectrum there are payday loans, which again are often available to people with bad credit. A payday loan, or cash advance, is always for a relatively small amount of money, and for a very short period of time. Many of the lenders do not worry about your credit rating because of the short term nature of the loan. You will need to have a steady income to get a payday loan, and the lender just wants to know that you will have enough money coming in from the next time you get paid to pay off their loan. So they are more concerned with checking your employment status than your credit history.
Payday loans are without doubt the fastest way to borrow money. Using a good online direct lender, it is now possible to have cash in your bank account on the same day as you apply. While payday loans can be an extremely useful resource in the right circumstances, it is important to remember that they are not a solution to debt or ongoing money shortages. Use them for one-off unexpected expenses only, or risk getting into more and more debt.
If a bad credit rating is stopping you doing what you would like, it is well worth checking your credit report to make sure there are no mistakes on it, and no out of date information. It is not uncommon for there to be errors, which you can have corrected and quickly improve your rating. You can get a report for free by signing up to a subscription with one of the agencies then cancelling before you have to start paying.
Whether you are looking for a payday lender, consolidation loan or a homeowner secured loan, you should always approach at least two or three companies, as rates and charges vary a lot. There are many companies to choose from in both the US and the UK, and it is important to ensure that you find established and reputable organisations to deal with. There are unfortunately lenders out there that will try to steer you into arrangements that make the most profit for them, rather than finding what is right for you or what you can really afford.
Read recommendations for reputable US and UK direct payday lenders.
Wednesday 4 November 2009
Borrow Money UK - Borrowing Options In The UK
There are many options available for anyone wishing to borrow money in the UK, as indeed there are in the US too. Different companies and organisations specialise in different types of lending, from short term payday loans, to consolidation loans for debt and larger loans secured against assets. The most common way to borrow money is through a personal loan, where the money may be required for any one of a whole range of reasons, such as a new car, holiday or item of furniture.
A growing number of people these days are borrowing money because of personal debt. When debts mount up and it becomes a struggle to meet all the payments, a common course of action is to seek a debt consolidation loan. The principle behind consolidating your debts is that you use the new loan to pay off all your old creditors, leaving you with just a single new payment to deal with.
Apart from the fact that it is much easier to deal with only one payment, the other main advantage of a debt consolidation loan is that the new payment should be lower than the total of your previous repayments. Care must be taken, however, to ensure that the payments are not just less because the loan is spread over a much longer period, otherwise you can end up paying back much more in the long term.
It is also important that the interest rate on the new loan is actually lower than for the old debts. The best way to ensure this is to list out all your existing debts and the interest rates you are paying, then only consolidate those debts which are at a higher rate than the proposed new loan. Do not be tempted to automatically include every existing debt you have in the consolidation loan.
Payday loans are relatively new to the UK, but well established in the US. These are a specialist form of borrowing that often does not require a credit check. Payday loans are always for small amounts of money and for very short periods of time. They are useful for dealing with small unexpected emergency expenses, but should not be seen as a way to deal with cash shortages due to ongoing debt problems. If they are used to cover ongoing shortages, the same problem will arise each month, which can lead to more and more borrowing. The other thing to be aware of with payday loans is that they should always be paid back on time, as the penalty charges are often extremely high.
An alternative type of loan which is available to people with bad credit ratings is homeowner secured loans. These are only available to people who own their own property and are a way of borrowing money which is secured against your home. What this means is that the debt is legally bound to your house, so if you do not keep up with repayments, the lender can arrange to have your house sold off to get their money back. The fact that there is the security of your house attached to the loan means that the lenders are less worried about poor credit ratings, and are often happy to lend much higher amounts of money.
Whatever type of borrowing you require, one of the most important things to remember is to always approach two or three different lenders and compare what they can offer, to ensure you are getting the best deal. When deciding which lenders to choose, you should take care to deal only with established and reputable companies, who have a track record of successful lending and happy customers.
Find recommendations for US and UK lenders for homeowner secured loans.
A growing number of people these days are borrowing money because of personal debt. When debts mount up and it becomes a struggle to meet all the payments, a common course of action is to seek a debt consolidation loan. The principle behind consolidating your debts is that you use the new loan to pay off all your old creditors, leaving you with just a single new payment to deal with.
Apart from the fact that it is much easier to deal with only one payment, the other main advantage of a debt consolidation loan is that the new payment should be lower than the total of your previous repayments. Care must be taken, however, to ensure that the payments are not just less because the loan is spread over a much longer period, otherwise you can end up paying back much more in the long term.
It is also important that the interest rate on the new loan is actually lower than for the old debts. The best way to ensure this is to list out all your existing debts and the interest rates you are paying, then only consolidate those debts which are at a higher rate than the proposed new loan. Do not be tempted to automatically include every existing debt you have in the consolidation loan.
Payday loans are relatively new to the UK, but well established in the US. These are a specialist form of borrowing that often does not require a credit check. Payday loans are always for small amounts of money and for very short periods of time. They are useful for dealing with small unexpected emergency expenses, but should not be seen as a way to deal with cash shortages due to ongoing debt problems. If they are used to cover ongoing shortages, the same problem will arise each month, which can lead to more and more borrowing. The other thing to be aware of with payday loans is that they should always be paid back on time, as the penalty charges are often extremely high.
An alternative type of loan which is available to people with bad credit ratings is homeowner secured loans. These are only available to people who own their own property and are a way of borrowing money which is secured against your home. What this means is that the debt is legally bound to your house, so if you do not keep up with repayments, the lender can arrange to have your house sold off to get their money back. The fact that there is the security of your house attached to the loan means that the lenders are less worried about poor credit ratings, and are often happy to lend much higher amounts of money.
Whatever type of borrowing you require, one of the most important things to remember is to always approach two or three different lenders and compare what they can offer, to ensure you are getting the best deal. When deciding which lenders to choose, you should take care to deal only with established and reputable companies, who have a track record of successful lending and happy customers.
Find recommendations for US and UK lenders for homeowner secured loans.
Monday 2 November 2009
I Need To Borrow Some Money To Get Out Of Debt
It is probably fair to say that for most people who experience serious debt problems, the first thing they think about is where to get some more money to pay off their creditors. Taking out one big loan to pay off old debts is known as debt consolidation, and while this can be a useful thing to do in certain circumstances, it is by no means always the most effective solution to solving many debt problems.
It partly depends on the size and nature of the debts you have, but if you have quite a serious amount of unsecured debt, then there are definitely options available which are better than borrowing more money. Unsecured debts are those which are not legally tied into one of your assets, such as a house. Things like credit card debts, personal loans, store cards, bank overdrafts, etc are all examples of unsecured debts.
In both the US and the UK there are many companies which specialise in debt settlement and debt management. These involve negotiating with your creditors on your behalf, to agree new repayment terms for the debt. This usually includes securing an agreement by the creditors to write off a substantial portion of the original amount owed, in some cases over half of your debt. The advantage of this approach over that of a consolidation loan is that it reduced the whole balance due, rather than just decreasing the amount of interest you pay. You therefore have a lot less to pay back, which allows you to be debt free that much sooner.
In the US, Debt settlement negotiation or debt management programs are frequently used as an alternative to bankruptcy. They are ways of dealing with substantial debt without incurring the serious legal consequences that come with bankruptcy. In the UK there are many companies who offer debt management plans, which involve making a single reduced payment to the company, who in turn negotiate and deal with all your creditors.
Another useful alternative to either borrowing more or declaring bankruptcy, which is only available in the UK, is an Individual Voluntary Arrangement, or IVA. This is a more formal, binding agreement, which again involves making a much reduced single payment to a company who then deal with your debts on your behalf. At the end of the agreed period, any unpaid debts are usually written off and you are free of debt.
The difference between an IVA and a debt management plan is that with a debt management plan your creditors do not have to agree to it, whereas with an IVA, if you can get 75% of your creditors to sign up, the rest are obliged to join in, whether they like it or not.
IVAs were first introduced as an alternative to bankruptcy, and they are certainly a far more attractive option. When you declare bankruptcy you lose all control of your assets, whereas an IVA gives you some involvement and choice about which debts are included and which are not. IVAs and debt management/settlement programs are all aimed at unsecured debts, so things like your mortgage or any secured loans cannot be included.
Whether you decide to look into a debt consolidation loan or a debt settlement company, it is important to talk to more than one company, and to ensure that the companies you do approach are well established and reputable. The danger is that less reputable companies may offer you solutions based on what will make them the most money, rather than what is best for you. Good companies will have a good track record of successfully helping people and will offer you the best options for your particular circumstances.
Read reviews and recommendations for reputable US debt settlement companies.
It partly depends on the size and nature of the debts you have, but if you have quite a serious amount of unsecured debt, then there are definitely options available which are better than borrowing more money. Unsecured debts are those which are not legally tied into one of your assets, such as a house. Things like credit card debts, personal loans, store cards, bank overdrafts, etc are all examples of unsecured debts.
In both the US and the UK there are many companies which specialise in debt settlement and debt management. These involve negotiating with your creditors on your behalf, to agree new repayment terms for the debt. This usually includes securing an agreement by the creditors to write off a substantial portion of the original amount owed, in some cases over half of your debt. The advantage of this approach over that of a consolidation loan is that it reduced the whole balance due, rather than just decreasing the amount of interest you pay. You therefore have a lot less to pay back, which allows you to be debt free that much sooner.
In the US, Debt settlement negotiation or debt management programs are frequently used as an alternative to bankruptcy. They are ways of dealing with substantial debt without incurring the serious legal consequences that come with bankruptcy. In the UK there are many companies who offer debt management plans, which involve making a single reduced payment to the company, who in turn negotiate and deal with all your creditors.
Another useful alternative to either borrowing more or declaring bankruptcy, which is only available in the UK, is an Individual Voluntary Arrangement, or IVA. This is a more formal, binding agreement, which again involves making a much reduced single payment to a company who then deal with your debts on your behalf. At the end of the agreed period, any unpaid debts are usually written off and you are free of debt.
The difference between an IVA and a debt management plan is that with a debt management plan your creditors do not have to agree to it, whereas with an IVA, if you can get 75% of your creditors to sign up, the rest are obliged to join in, whether they like it or not.
IVAs were first introduced as an alternative to bankruptcy, and they are certainly a far more attractive option. When you declare bankruptcy you lose all control of your assets, whereas an IVA gives you some involvement and choice about which debts are included and which are not. IVAs and debt management/settlement programs are all aimed at unsecured debts, so things like your mortgage or any secured loans cannot be included.
Whether you decide to look into a debt consolidation loan or a debt settlement company, it is important to talk to more than one company, and to ensure that the companies you do approach are well established and reputable. The danger is that less reputable companies may offer you solutions based on what will make them the most money, rather than what is best for you. Good companies will have a good track record of successfully helping people and will offer you the best options for your particular circumstances.
Read reviews and recommendations for reputable US debt settlement companies.
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