Debt Problem Solutions

Where To Borrow Money When The Banks Won't Loan - Borrow Money With Bad Credit

2010-02-23T13:19:00.000-08:00

Banks tend to be very rigid about their lending policies, and they are even more cautious than usual at the moment. They have set ways of assessing the risk of each potential borrower and this invariably involves checking your credit rating. If you have any problems and your credit is less than perfect, they are not interested in lending you any money. This would be a major problem if banks were the only organisations you could borrow money from, but fortunately they are not.

If the banks are not lending you money we will assume that you have bad credit, so you need to find lenders who do not use your credit rating to assess whether to lend you money or not. There are several options open to you for borrowing money with bad credit, but the easiest and quickest is to use a payday loan. The only drawback with these is that they are always for small amounts and short periods of time.

Payday loans are a type of rapid cash advance and if you apply online to a good direct lender you can normally get cash the same day. The loans usually have to be repaid in full as soon as you are next paid by your employer. For this reason, the only things a payday lender will want to check are that you are in paid employment and that you have a bank account. These loans are perfect to cover a one-off shortage caused by a big bill that you had not budgeted for, but steer clear of using them on any kind of ongoing basis. Take care to choose an established and reputable payday loan company, as there are unfortunately many operating who try to exploit people by applying incredibly high penalty charges for any late payment, making it extremely hard to ever pay the loans back.

If you need to borrow more money than you can get with a payday loan, or you want to pay it back over a longer period, then you need to look for a different type of lender. To get a bad credit loan for a substantial amount, over a reasonable time period, you need to find a lender that will look at factors other than your credit rating. They will all want some form of security instead, which leaves you two options. One possibility is lenders who will accept a personal guarantor as part of your loan application, and the other is a homeowner or mortgage loan.

By providing a guarantor for your loan, the lender is covered by having someone else with a better credit rating than you to go to if you do not keep up with payments. Provided you have someone you know who would be prepared to back you in this way, this type of lending is an extremely useful way of getting around the problem of a bad credit record.

Homeowner loans are secured against your house, so you are not able to get one unless you own your home or have a mortgage. The lender is satisfied because they know that if the worst happens and you fail to pay back the money, they can arrange for your house to be sold in order to pay them back. With such a serious possible consequence, however, you need to be very sure you can keep up with payments. Provided you are responsible about it, these loans are a good way of getting very large amounts of money for a range of uses. Sometimes such loans are used to consolidate older debts, or for major expenses such as home improvements, new items of furniture, etc.

If a bad credit rating is hindering your ability to borrow money and you are not sure why, it is probably worth checking your credit report for yourself. You can do this completely free of charge in both the UK and the US through certain credit reference agencies. All you have to do is sign up for a subscription service, get a copy of your credit report, then cancel the subscription before you have to pay anything. Many people find errors or out of date information on their reports, which can be easily corrected. It is worth checking your report, because correcting a small error can drastically improve your credit rating.

Find reviews and recommendations for the most reputable and fastest direct payday lenders in the US and UK.

Where Can I Get A Loan Quick With Bad Credit

2010-01-25T14:00:00.000-08:00

Problems with your credit rating can lead to all sorts of other difficulties when it comes to borrowing money. Any traditional lender will simply not give money to people who have had credit problems in the past. The credit check sounds an alarm bell for the way they operate and you are seen as too great a risk for them. Fortunately not all lenders operate the same way, so there are a few options for getting money quickly even if your credit is bad.

You will not be surprised to hear that there are few lenders out there who are either completely reckless or just plain stupid, so they do want to be pretty sure that you will pay back whatever they agree to lend you. Lenders that are not interested in your credit report are only ignoring it because they have some other factors that they focus on in terms of covering their risk.

The main options open to you that do not depend on good credit are either for very small amounts for a short period of time (Payday Loans), borrowing where you can get someone else to act as a guarantor, or loans that are secured against an asset that you own which is worth more than the amount you are asking for.

Payday loans are by far the fastest way to get cash into your bank, and with the best companies you can have money in your account within hours of completing a form online. These are always for small amounts of money (seldom more than $1,000 or £750) and usually have to be repaid in full on your next pay day. The reason your credit rating does not matter is that the only thing they need to know is that you have a job and that you have enough due in your next pay packet to repay the loan.

Payday loans should only be used to cover emergency expenditure such as large unexpected bills. They can lead to problems if you try to use them to cover a gap in your regular income and expenditure.

If you need to borrow more money than you could get with a payday loan, you need to look at the next type of bad credit borrowing. This type of personal loan is available through a few specialist lenders that do not need to credit check you because they ask that you provide someone to act as a guarantor for the loan. What this means is that you have to be able to name someone who does have decent credit, who will sign a form to effectively say that if you default on the loan, they will then be liable for repaying it.

This gives the lender the security of knowing they will still get paid even if you do fail to keep up with payments. These loans are not going to be quite as fast as an online payday loan, because the guarantor will normally need to sign a form, but a good company will turn it round in about three days from applying.

The final type of bad credit borrowing is an option for larger amounts of money, and is only available to homeowners. The mortgage loan or secured loan is when you borrow money and legally tie it to your house, so that if you default on payments the lender can ultimately have your house sold to get their money back. While these should not be entered into lightly, they are an effective way of using the equity in your home to access considerable amounts of money when you need it.

You can see that the door to borrowing is not completely closed when you have bad credit, but the lender always needs some sort of assurance of repayment, which inevitably dictates the nature of the loans available. When taking out any type of loan you should always ensure that you only approach reputable and well established lenders.

Find reviews and recommendations for the most reputable and fastest direct payday advance lenders in the US and UK.

Best Debt Settlement Program

2010-01-15T13:52:00.000-08:00

If you are experiencing serious debt problems you may well be considering using a debt settlement program to deal with the problem and get rid of your debts once and for all. This is a good idea, provided your situation is suitable for debt settlement, but there are a huge number of companies to choose from and it is hard to know where to start. The first thing to say is that it is true that there are a lot of companies that are to be avoided, so it is right to think carefully about how to find the best debt settlement program and a reliable company that you can work with.

There are lots of companies that will do a good job for you, but the most important thing is to avoid the ones who will not actually help you. There are quite a few companies operating who will want you to sign up for their program even if it is not the best solution for you, then take up front fees without delivering the settlements you require. Using one of these could land you in a worse position than when you started, so it is important to take some time to understand how to narrow your search to the best companies.

Your starting point should be to get a basic understanding of what a debt settlement program involves, which will equip you to make informed judgements about their proposals and other things they tell you. You first of all need to know whether you are likely to be accepted into a debt settlement program, as they are for fairly specific circumstances. You will need to have quite a lot of unsecured debt to a few different creditors. By quite a lot I mean usually at least $10,000. Unsecured debt is things like credit cards and unpaid bills, and does not include secured loans or mortgages. You will typically be struggling to repay the debts and probably not have enough spare income for a debt management or payment plan.

The process that you will go though on a debt settlement program is typically as follows. A debt advisor will go through your finances with you and then start a process of negotiation with all your creditors to try to reach agreements to settle your debts for much less than the full amounts owing. Meanwhile, you will stop paying your creditors and pay an amount each month into a separate account instead. This pot of money will gradually build up, and is used to pay off your creditors as settlements are agreed. The time it takes to reach agreements can vary enormously, and the settlement company often have to wait quite some time in order to get the maximum possible reduction on your debt.

To find the best debt settlement program you need to make sure you only approach companies that you know you can rely on to do a good job. You do this by narrowing your search down to a few recommended organisations that you know to be well established, highly reputable and with a good track record of having already solved the problems of many other people in serious debt. Your final safeguard is to always apply to at least two of these companies, so that you can compare offers and make an informed choice based on their proposals and how you feel about dealing with the individuals involved.

Read reviews and recommendations for reputable online debt settlement companies.

Direct Lenders For Payday Loans

2010-01-13T13:52:00.000-08:00

This article will explain exactly what direct lenders for payday loans are, and go through the key things you should consider in order to make sure you find the best ones. There are many variables when it comes to payday loans, and knowing how to find the top direct lenders can help ensure that you get the best value and the fastest service. The other important benefit of only considering the leading companies is the knowledge that you are not going to be exploited by the unethical practices of many of the less reputable lenders.

The reason you should look for direct lenders when you want payday loans is that it is best to deal directly with the actual company who are lending you the money, rather than a broker in the middle. The main advantage being that you will always get the best value by going to direct lenders as there is no middle man to pay. The other advantage is that speed is very often an issue when you want a payday loan and the fastest responses always come from direct lenders because the only communication is direct between you and them.

One of the attractions of a payday loan is how quick and easy the whole process can be, compared to other forms of credit or borrowing. With the advent of the internet, it is possible to have money in your bank account in a matter of hours after you complete a form on a website. This is only possible with online direct lenders and is one of the things that helps to make payday loans so popular in both the US and UK.

There are state laws governing payday loans in the US, and sometimes the charges for borrowing are set by the state. All payday lenders have to be licensed by each state they wish to lend money in, and this is something worth checking to help ensure you are dealing with a legitimate organisation. Some lenders only operate in a small number of states, so it can save you time if you start with some well established lenders that cover most states. UK lenders can lend to anyone in the UK.

Payday loans are a form of cash advance against your next salary or wage payment. They are always for relatively small amounts of cash compared to other loans, and for this reason many good direct lenders will not require a credit check. Even if a credit check is carried out, the bar tends to be set much lower for payday loans. This is because they are only for short periods of time and the direct lender knows that you will be getting enough money from your job to cover what you have borrowed within the next few weeks.

Payday loans should not be used to cover ongoing debt or a general gap between your income and expenditure. They are a useful way of dealing with unexpected emergency expenses, but can be dangerous if used in the wrong way. When people get into difficulties with payday loans it is usually because they have failed to pay it back on time. Less reputable lenders will use this as an excuse to make absurdly high penalty charges, which is a key reason to find an established and ethical direct lender when you want a payday loan.

It is very easy to go wrong by just searching the internet, as it is often hard to tell just from a website which companies are the good ones and which are on the bandwagon simply to extract money from people who cannot afford it. The safest approach to finding direct lenders for payday loans is to follow recommendations for well established organisations and apply to two or three. This will allow you to compare rates and also allow for the fact that you may not be accepted by all of them.

Read recommendations for reputable direct payday lenders in the US and UK.

Can A Credit Card Company Sue You For Debt

2010-01-12T14:48:00.000-08:00

Credit cards are an essential part of the way we all live today, but the very convenience of them can make it all too easy to overstretch ourselves. Being able to just make a minimum payment each month is very tempting, but in the long term it can lead to very substantial debts that become difficult or impossible to pay back. This is the point at which the card companies who were so eager to help us spend money now turn rather serious and start threatening to take us to court.

This is not a pleasant experience for anyone, particularly if you do not understand the legal situation and are not sure if they really can do what they threaten to. Sometimes your dealings will be with the card company themselves, and other times you may be approached by a debt collection agency. Not all collection agencies have a reputation for honesty and integrity, so it is understandable that we may wonder if they are telling us the whole truth when they threaten to sue.

The fact is that a credit card company can sue you for debt if they choose to, and it does not really matter whether you are being approached by the card company or a collection agency. The agency will either be acting on behalf of the card company, or may even have bought the debt themselves. In the latter case you will now owe the money to the collection agency and the principles around being sued are exactly the same.

The consequences of being sued successfully are that a court order will be made against you, and you will be ordered to make payments at a rate that the court decides is fair, considering your financial circumstances. You do not need to worry that you might be sent to prison as a result of this action, but it will have a lasting impact on your credit rating and is certainly best avoided. Also, the consequences do get a lot more serious if you then default on the payments ordered by the court.

Whether the card companies will sue you or not depends on many factors, but if you appear to just ignore the situation, you are making it far more likely that they will. Even if you are already being threatened with legal action, it is not too late to avoid this by using one of the options available to you to deal with your debts.

Credit card debt is what is called an unsecured debt, as it is not tied to any asset (unlike your mortgage for example). If you have a substantial amount of unsecured debt there are two main options open to you that will lead to you being debt free again, so these are at least worth considering. They are for any kind of unsecured debts, so could also include any personal loans, bank overdrafts, etc.

The first option is a debt management plan, which involves a specialist company negotiating new repayment terms with your creditors. This leads to a single affordable payment that you make each month to the debt management company. It instantly reduces what you pay, simplifies your payments and stops the card companies hassling you. To set up a plan you need to have an income and some money spare each month to meet the payments. Such plans are widely available in both the US and UK.

If your situation is more serious and you would struggle to make the payments on a debt management plan, then your best option may be debt settlement. This involves using expert negotiators to work out deals with all your creditors to settle your debts for substantially reduced amounts, in exchange for quick repayment. In the UK there is a scheme called an IVA, which fulfils the same function as debt settlement, dealing with serious debts and writing off part of them.

So if a credit card company is threatening to sue you for debt, the best thing you can do is look into debt management, settlement or an IVA, depending on your situation and where you live. This will send a clear message to the card companies that you are trying to tackle the situation. When it comes to finding a good company to work with, you need to be cautious as there are a huge number to choose from, and they are unfortunately not all effective or ethical.

The best ones are experienced experts who will do all they can to get you out of debt, whereas the worst ones are really just out to take money from you. You should therefore always look for well established companies that can demonstrate a record of success in dealing with people in debt. The safest starting point is to follow recommendations for known reputable companies and to always approach at least two, so that you can consider what each one offers and choose which you prefer.

Read reviews and recommendations for reputable online debt settlement companies and UK IVA providers.

Best Debt Management Companies

2010-01-11T15:03:00.000-08:00

Finding the best debt management companies can seem like finding a needle in a haystack if you are not sure how to go about it. There are hundreds of companies offering to solve all your problems and promising amazing results, but how do you know whether or not you can trust them? You are right to be sceptical as there are many companies out there that you would do well to avoid. Some unscrupulous organisations view desperate people as a business opportunity, and a bad debt management plan will leave you worse off, rather than better, in the long run.

So what do you need to know to make sure you can avoid the money-grabbers and find the most reputable and best debt management companies? The best place to start is with a good understanding of what debt management is, so that you know what to expect from the companies you approach and what questions to ask them.

There is a lot of different terminology around this subject, so I will clarify that to begin with. Debt management companies offer Debt Management Plans. These are also known as debt payment plans or programs. The process is also sometimes known as debt consolidation in the US, whereas in the UK debt consolidation always means taking out a loan to pay off your debts. The term consolidation is used because the process does include consolidating all your debts into one single payment. Debt management does not, however, involve any new loans or borrowing of any sort.

The process of setting up a plan for you will involve an experienced debt advisor going through your finances with you and then negotiating on behalf of you with all of your creditors. The purpose of the negotiations is to arrange new repayment terms which will bring your payments down to a level that you can afford. This will usually include having interest charges reduced or frozen, so your debt stops growing. You then just make one monthly payment to the management company and they pay your creditors for you.

The main advantages of these plans are having only one payment that you can actually afford to make and not having to deal with creditors chasing you for payments, because the debt management company will deal with all of that. You need to be aware that debt plans are only for unsecured debts, so you cannot include any secured borrowing like your mortgage. The other things that the debt management companies will look for is that you have a steady income which leaves you enough money spare to make the monthly payments, and that you have a substantial amount of debt.

If you do not think you will have enough money left over after paying your basic living expenses to meet the payments on a plan, then you may need to consider debt settlement instead (or an IVA if you are in the UK). These are for more serious debts and involve negotiating to write off a substantial part of what you owe.

Once you have a good understanding of the process involved, you then need to look for well established and reputable companies who operate in your country of residence. The dangerous ones are often the new organisations with no track record, so look for companies that can demonstrate having put into practice what they say they can do. The safest way to find the best debt management companies is to follow recommendations, and you should always apply to at least two so that you can compare what they offer you. This will also give you an opportunity to consider which company you feel more comfortable dealing with.

Read reviews and recommendations for reputable debt management companies in the UK and US.

Personal Grants To Pay Off Debts

2010-01-09T13:54:00.000-08:00

One of the most stressful aspects of being in serious debt is that you cannot see how to ever get rid of it. When the amount you owe each month becomes so much larger than your income is ever likely to be, the only way out can appear to be getting some money from elsewhere. Some people in this situation turn to consolidation loans, borrowing more money to pay off what they owe, but this is rarely the best answer to large amounts of debt.

The ideal answer would be to get a grant that you do not need to pay back. This is the perfect solution as it resolves the problem and wipes the slate clean. The idea of grants to pay off debts is one that you will come across a lot on the internet, so it is not surprising that many people think that there is easy money there for the taking. The bad news is that while there are a great many grant schemes on offer in the US, none of them are just to pay off debt. Neither are there any such grants in the UK. Imagine if there were; everyone would want them, and there would be little incentive to avoid going into debt. However, there are some legitimate alternatives available which have the same result as if you were given a lump of money.

The idea that there are personal grants to pay off debts is one perpetuated by people who, one way or another, are trying to get money out of you. Sometimes it is in exchange for a database of grants and how to apply for them. Many of these grants are in fact for starting up new businesses, often ones which fulfil a particular need in a certain area. The justification for many adverts that say there are personal grants to pay off debt is that you could get one of these grants, start a new business, make some money and then use that to pay off your debts. I personally would not trust anyone who needs use such a convoluted argument to get your attention.

I mentioned that there were alternatives available which can have the same effect as a grant would on your debt. The main one is debt settlement negotiation, which involves getting agreement from your creditors to write off a large chunk of your debts, often over half of the total. The net result is that over half your debt disappears, as if it were paid off, making it far more possible to pay back the remainder. Debt settlement is not commonly used in the UK, because there is an equivalent scheme called an IVA, or individual voluntary arrangement. This too usually involves writing off a significant part of your debt.

When you sign up for debt settlement you just have one monthly payment to find, and the debt settlement company deal with your creditors for you. While you make payments into a fund, they will negotiate settlement deals with each of your creditors in turn, which result in paying them substantially reduced amounts in exchange for a quick settlement.

One word of warning if you are interested in finding out about debt settlement; you need to take steps to avoid some debt settlement companies who are likely to ask for money up front but not achieve good settlements for you. There are plenty of excellent companies that will do a good job, but there are plenty of bad ones too, so you need to exercise some caution. With the best companies you will only pay them a proportion of what they save you, so you can not lose out.

The main thing is to be aware that not all the companies out there are trustworthy, and you can avoid them by following recommendations for reliable and well established companies. You need to find organisations who have been around for a while and can demonstrate that they have successfully helped many people out of debt. It is also useful to apply to two or three debt settlement companies and see how the offers compare before signing up.

Read reviews and recommendations for reputable online debt settlement companies in the US.

Reliable Debt Settlement Companies

2010-01-06T15:08:00.000-08:00

Debt settlement companies have a mixed reputation, and quite understandably so. While many are honest and reliable, others are less so, and these few rotten apples have caused some people a lot of problems, and tarnished the reputation of the industry in general. So if you are in a position where you are considering using a debt settlement company, you will clearly be anxious to find the most reliable ones.

This article is intended to equip you with the information you require to go out and find the best debt settlement companies and avoid the less reputable ones that cause all the problems. One of the most useful things you can do to begin with is ensure that you are familiar with the process, so that you have a good understanding of what it is you will be asking a settlement company to do for you. To begin with, we will therefore look at what this process actually involves. It is worth pointing out that debt settlement is a solution that is widely used in the US, but the equivalent to it in the UK is known as an IVA, which achieves the same result.

It is important to understand that debt settlement companies offer a very specific service, which is different to debt management or consolidation. While all of these processes result in you having just one monthly payment to worry about, it is only through the settlement approach that you will actually reduce the amount of overall debt that you owe. This is because it involves negotiating with all your creditors to agree new settlement terms, which usually means a lump sum payment in exchange for a substantial reduction in the amount of the debt. This often means writing off over half of your debts. The process is also known as debt negotiation.

It sounds easy when you say it like that, but if you have ever tried to negotiate with creditors yourself, you will know that it isn’t. A lot depends on understanding how creditors work and knowing when to strike a deal to get the maximum reduction possible. The most reliable debt settlement companies will be well established and already have relationships with hundreds of the most common creditors. This makes coming to an agreement that much easier.

When you sign up with a reliable debt negotiation company and they start the negotiation process, you will normally stop paying your creditors and start making payments instead into a separate bank account. The negotiations can take from days to years, depending on the creditors and other circumstances. While this is taking place your money is being saved up and is then used to pay off each creditor as the settlement is agreed.

That is the process that will be followed if you use one of the reliable debt settlement companies. When this way of tackling debt goes wrong, it is because less reputable companies take large fees for their services, and fail to deliver on the settlements. This is little short of a scam and just leaves you in a worse situation that you were before.

To ensure that you find a reliable debt settlement company, you should not just search randomly, as any company can make themselves sound good on a website. You need to find well established companies that can demonstrate a history of having successfully delivered results for people in your situation.

The best starting point is to follow recommendations for reputable companies, and never just approach one organisation. You need to apply to at least two so that you can compare their proposals, as these can vary considerably, even with the most reliable debt settlement companies.

Read reviews and recommendations for reputable online debt settlement companies in the US.

Top Debt Settlement Companies

2010-01-02T11:04:00.000-08:00

When you owe lots of money and you decide you want to try to settle your debts, you naturally want to find the best debt settlement companies out there. This is a perfectly sensible approach, but can be easier said than done. Part of the problem is that that there are just so many debt settlement companies operating now, many of whom are newly formed to take advantage of the increased number of people who find themselves with financial problems.

This makes selecting the right company quite a risky proposition, not least because getting the decision wrong could land you in a worse situation than you were before you sought help. The worst companies are outright scams, but many just do not care enough about actually finding the solution that is right for your particular circumstances. Their primary interest is in signing you up for a scheme that will allow them to take money from you up front, leaving them no incentive to get on and do a good job with your creditors.

The top debt settlement companies are much more ethical and more likely to take their fee as a proportion of the amount of money they manage to save you. That way it is directly performance related and you can only end up better off. They can also do this because they know they are good enough at their jobs to get substantial reductions on your debts, and so earn their own share.

It will help to have a basic knowledge of the settlement process before you start looking at companies, in order to understand what it is reasonable to expect from them, and how to spot when they say or do something that should give you cause for concern. The way most organisations will operate is that you will stop paying your creditors and start putting that money into a new holding account instead, based on a monthly amount that you can manage to pay.

Meanwhile the debt advisors will approach all of your creditors in turn to try to reach a negotiated deal to settle your outstanding balance. The aim of this is to get a large reduction in the amount of debt you owe. This is often, but not always, in return for a full prompt payment of the agreed settlement amount. The length of time that these negotiations can take will vary enormously.

Meanwhile your payments are mounting up in the account, and this money is used to settle each debt as an agreement is reached. The settlement company should deal with your creditors for you, so any hassling for payment ought to stop. After a period of usually between one and four years, settlements will have been reached for all of your debts, your payments will come to an end and you are debt free again.

You will want to concentrate on the top debt settlement companies when you are looking for one to work with, so that means identifying which are the most established and reputable organisations. New companies will be a much higher risk, so go for ones that can demonstrate that they have a lot of experience and that they have already helped lots of other people who were in your situation.

All the top debt settlement companies have websites now and the initial approach is usually a simple online form. Once you submit that, they will get back in touch to go through things in more detail. The other important precaution to take is to make sure you approach at least two different companies so that you have something to compare, because even the top companies will vary in terms of what they can offer you.

Read reviews and recommendations for reputable online debt settlement companies and UK IVA providers.

Successful Credit Card Settlement

2009-12-28T14:47:00.000-08:00

Credit card companies know exactly what they are doing when they make it so easy for us to get the things we want, even though we can not afford them. When money is tight it is all too simple to turn to our flexible friends for help. The problem creeps up slowly as the debt builds up, until the burden of paying them back becomes impossible. The credit card payments then exacerbate the problem still further, making us rely even more on credit and borrowing.

The ease with which we can spend money with credit cards is one reason why serious credit card debt has become such a problem for so many people today. At this point many people can see no way to get rid of the debt, so they start considering serious options such as filing bankruptcy. While this may be necessary in some cases, there are far more times when it can be avoided by using a negotiated settlement.

The main principle of successful credit card settlement is that new agreements are negotiated with each card company, which result in them writing off a large part of what you owe them. While that sounds simple, it is a complicated area and the negotiations can take anything from weeks to years. The basic choice you have is whether to try to do this directly on your own, or to do what the majority choose to do and use the services of a debt settlement company.

Successful credit card settlement is possible to achieve on your own, provided you have the right understanding of the processes that card companies go through when dealing with outstanding debts. A lot depends on the timescale of your approaches and when you choose to try to make a deal to settle. Knowing when to negotiate and what to say makes the difference between getting no settlement deal and writing off over half the debt.

To go into that without help is unlikely to yield great results, though there are various online resources that can teach you about the process and help to give you an understanding of how to reach successful settlement deals yourself.

The alternative is to approach a debt settlement company, who will have highly experienced negotiators, who know exactly how and when to approach creditors in order to maximise the discounts on the debt. The best companies will have relationships with many creditors already, which can make the settlement process that much more effective.

If you do decide that the best way to successful credit card settlement is to work with a professional company, you should exercise some caution with regard to selecting the company to use. Debt settlement has gained a bit of a reputation from some companies who do not operate ethically or responsibly. Unfortunately many people have fallen prey to organisations who take large advance fees from people and then fail to gain any reductions on their debts.

It is important not to let this put you off the whole settlement process, because it works very well when done by reputable companies, but you should indeed be put off from taking any chances with who you use. There are many good companies and you will be perfectly OK provided you make sure you only deal with reputable organisations who are well established and can demonstrate a history of successful credit card settlement. The other essential precaution is to approach at least two or three so that you can see who provides the best proposal, and find out who you feel most at ease with.

Read reviews and recommendations for reputable online debt settlement companies and UK IVA providers.

How Do I Consolidate My Debts

2009-12-18T13:51:00.000-08:00

Debt consolidation is a widespread method of tackling debt problems, and involves consolidating lots of different debts into one, lower monthly payment. There are two different approaches to debt consolidation, one of which involves taking out a new loan, and the other type which does not involve any borrowing at all.

The type of consolidation which involves borrowing makes use of what are called debt consolidation loans, and this is the usual interpretation of what the term debt consolidation means in the UK. When the term is used in the US it more often than not refers to consolidation through a Debt Management Plan, which is an option common in both the UK and US.

Taking out a loan to consolidate your debts can be useful, but is also risky if not used properly. Just the idea of taking on more debt when you are already in debt is one which obviously requires careful thought. It is only worthwhile if you are sure that you are paying off debts which are at a higher interest rate than the new loan you will be taking out. It is usually only suitable for relatively small amounts of debt, which are at a particularly high rate of interest.

If you are not careful about how you do this, you could end up paying more in the long run, even if your monthly payments are lower. Sometimes people are offered a new loan and all they look at is the monthly payment. This is dangerous because the amount could be lower, but you might be paying it off for much longer, meaning it costs you more in the end.

The debt management method of consolidating your debts is therefore generally preferable to a loan, and is more suitable for dealing with larger amounts of debt. The process involves using a debt management company to negotiate with your creditors in order to reach new agreements for repaying what you owe. This normally means reductions in the interest charges you pay and changing the repayment terms to bring them in line with what you can afford.

The company deal with all your creditors to end up with you only having to pay one affordable amount every month to the company, who then share it out among the creditors. The main benefits being that your monthly outgoings go down and you no longer have lots of different payments to make, and your creditors stop chasing you for money.

If you want to take part in this type of debt management plan, the debts you can include must be what are called unsecured debts. This just means that they are things like money owed to credit card companies, personal loans, bank charges etc, rather than debts secured against assets like your home. Your mortgage, for example, cannot be included in a debt management plan.

If this is something you wish to explore further, the most important thing to do is exercise caution with regard to finding a debt management company to work with. While there are plenty to choose from, unfortunately there are many who will happily offer you a plan, but it will be very much more to their financial gain than yours.

For this reason you need to ensure that you find reputable, ethical and well established companies with experienced debt advisors. You want people who will look at your situation and tell you what is best for you, whether that happens to be a debt management plan or not. Finally, always approach at least two or three, to ensure you can compare the proposals they make.

Read reviews and recommendations for reputable debt management companies in the UK and US.

Debt Payment Plans - Using Debt Management Plans To Get Rid Of Debt

2009-12-16T13:18:00.000-08:00

Debt payment plans are known by various other names too, including debt management plans, debt payment programs and debt consolidation. These terms all means the same thing, which is a process of consolidating all your debts into a plan that leaves you with one monthly payment, which is lower than the sum of your old debts. An important point about this kind of debt payment plan is that it does not involve borrowing any more money, so does not increase your burden of debt any further.

Debt payment plans are arranged by debt management companies, who offer this service in the US, UK and other countries. You will need to approach a company that operates in your own country of residence. What the plan involves is the management company talking to your creditors to agree new deals for paying back their money. This tends to mean that interest charges can be reduced and some fees are often waived. The result of the new arrangements will be that your debt stops getting bigger and you get agreement to new payment amounts that you can afford.

When agreements have been set up with all your creditors, all you have to do is make one payment to the debt management company, and they pass it on to all your creditors. The more obvious benefits of such arrangements are that you only have to worry about one easy payment, and you no longer have creditors phoning you all day long to get their money.

You normally need to have quite a large amount of debt for a debt payment plan to be suitable for you, and the type of debts must be what are known as unsecured debts. All this really means is that you cannot include debts which are legally secured to assets, such as your mortgage. Unsecured debts refer to such things as personal loans, credit card bills and other unpaid bills.

The other requirement if you are interested in arranging a debt payment plan is that you have enough spare income to meet the regular repayments. It can be a useful exercise to work out your monthly income and expenditure, to see how much you could afford to pay. Include all your regular household costs except your debts, and see what you have left each month that you could put toward the debt payment plan.

If you find that you do not have enough spare money to meet the repayments on a plan, then you may need to look at other alternatives such as debt settlement. This is suitable for people with serious debts and not much spare income, and involves negotiating settlements with your creditors that include writing off significant amounts of the debt you owe. The equivalent to debt settlement in the UK is called an individual voluntary agreement, or IVA.

Most importantly, once you understand what a debt payment plan is and decide you wish to look into it, take some time and care over which companies you contact to help you. It is important to approach at least two of three, so that you can compare them against each other, but it is more important to only approach reputable companies. Look for well established and reliable organisations with a history of helping people to get rid of debt.

Read reviews and recommendations for reputable debt management companies in the UK and US.

What Assets Can Be Taken In Bankruptcy

2009-12-12T06:50:00.000-08:00

Bankruptcy is a drastic step, and one usually taken by people who feel they have no other alternative. When you are declared bankrupt you essentially lose control of all your assets. In the US there are certain modest personal exemption levels for different types of asset, intended just to cover the essential things you need to get by. Anything above these levels will be liquidated to raise money to pay off your creditors. What these exemption levels are is governed by state law and therefore varies from state to state.

In the UK full control of your assets is transferred to your trustee, with the only exceptions usually being what are classed as essential items, which includes clothes, bedding, basic items of furniture and any equipment you need to carry out your work. This can also include one vehicle if it is essential to your income. Even if some items are essential, you could still find them being sold and replaced by cheaper alternatives if they are particularly valuable.

By filing bankruptcy you basically lose everything, and there are lasting consequences in terms of your credit, future employment and reputation. It is a very serious step to take and one that should not be taken lightly. While bankruptcy proceedings will sometimes be started by your creditors, if you are thinking of filing for bankruptcy yourself, you need to ensure that you are fully aware of, and have properly considered, the possible alternatives.

To be looking at bankruptcy we will take it as read that you have a very serious amount of debt and you do not have the means to pay if back. In this situation, some people think that means their only option is to file bankruptcy, but it isn’t. You are probably beyond the reach of a debt management plan or debt consolidation, but there are more radical solutions which involve seriously reducing the amount of debt you owe.

The alternatives to bankruptcy will partly depend on what country you live in. For US residents, the main alternative to bankruptcy is called debt settlement, or sometimes debt negotiation. This involves using a specialist negotiator to work out new settlement terms with all your creditors, which normally means agreeing to significantly reduce the amount owed in return for an up front payment. You do not have to have money available for the up front payment, you just keep paying an affordable amount each month into a separate account. This money gradually builds up and is used towards the settlement payments as each agreement is reached.

If you are a UK resident, there is an equivalent to debt settlement, which is even better is some respects. The government introduced something called IVAs, or individual voluntary arrangements, and these are specifically designed to give you an alternative to the drastic step of declaring bankruptcy. They are formal agreements, which like debt settlement, involve negotiated agreements with your creditors, and usually involve a substantial part of your debts being written off. Because they are legally binding agreements, one advantage of them is that if you can get 75% of your creditors to agree, then the rest are legally bound by the arrangement too.

If you are considering bankruptcy and have not already discussed alternatives with a debt settlement or IVA company, then you should certainly do so. Do ensure that you only deal with reputable companies though, otherwise your situation could be made worse if you are given poor advice. Always look for well established companies who already have a reputation for delivering responsible debt solutions successfully. You should also consult more than one company, as offers and proposals will vary.

Read reviews and recommendations for reputable online debt settlement companies and UK IVA providers.

Reputable Debt Management Companies And How To Find Them

2009-12-09T14:39:00.000-08:00

When you have serious debt problems and you turn to a debt management company for help, you really cannot afford to take chances. All too often people make the decision to deal with their debt problems once and for all, they sign up with a company, and a year or so down the line they find that they have handed lots of money over in fees, but that their creditors are still chasing them for all their debts. This is a consequence of getting involved in one of the less reputable organisations who are currently operating in the field of debt help.

If you are going down the debt management route you need to ensure that you choose a reputable company to work with. Before you go that far, however, you should make sure that debt management is the right option for you, and that you have an understanding of the process you will be going through. The reason you need to understand the process is so that you can make an informed decision. It is also important to make sure you are opting for this route because it is the best solution to your problems, rather than because that is the only option you are aware of.

Debt management is sometimes referred to as debt consolidation, though this should not be mixed up with the type of debt consolidation that means taking out a loan. No borrowing or loans are involved in this kind of debt consolidation. The process involves a skilled negotiator dealing with your creditors on your behalf, to come to new arrangements for paying back your debts. The person will work for you to reach agreements that result in new payment amounts, which are combined together into one affordable monthly payment. You only have one payment to be concerned with, which you pay direct to the debt management company.

A reputable organisation will deal with your creditors for you, so you should not be hassled for payment any longer. The negotiations usually involve reducing or at least freezing your interest charges, or even writing charges off, which stops your debt growing and makes it easier to fix a timescale for becoming debt free. Debt management does not involve writing off any of the actual debt, so your creditors do end up being paid back all the principle amounts that they are owed.

For a debt management plan to work, you need to have some money spare each month to put towards the payments. You will therefore be expected to have a regular income. The debts you can include in the plan will need to be what are called unsecured debts, which are things like credit cards and household bills, rather than mortgages or hire purchase agreements.

If you think you will not have any, or enough, money spare each month to set up a debt management plan, you still have options available to you apart from bankruptcy. The main alternative is known as debt settlement, and is a process that involves negotiated settlements with your creditors which include writing off large amounts of your debt. The equivalent of debt settlement for UK residents is called an IVA, or individual voluntary arrangement.

Once you are sure that debt management is your best option, you need to find some reputable debt management companies to approach. The key points to remember when looking at companies is to only approach those who are well established and have a track record of helping lots of people already, and always approach two or three in order to compare the proposals they can offer you. Following reviews and recommendations can speed up the process of coming up with a shortlist of reputable companies.

Read reviews and recommendations for reputable debt management companies in the UK and US.

Letters To Write To Creditors - Advice About Negotiating Debt Settlements

2009-12-08T14:38:00.000-08:00

When you are deep in debt and trying to find a way out of it, one option is to see if you can reach an agreement with your creditors yourself. This is a very positive step, and is certainly better than ignoring the situation and hoping that it might go away. If you are able to reach agreements with your creditors to change the repayment terms on your debts so that they become affordable for you again, this is certainly one of the most direct ways of dealing with debt problems.

Writing letters to your creditors is the best way of negotiating, as it ensures that you can state clearly what you want to say, and makes it easy to keep clear records of what you have said and done and what their responses are. You will need to write several letters, starting off with an initial one to explain what your situation is, how you got into it and to say that you are trying to address the problem. You need to ask each creditor to confirm exactly how much money they are owed, and get them to state clearly any interest charges or late payment fees included in that.

You then need to use the information you get back to make a list of all your creditors and how much you owe to each one. Before you can write letters to your creditors again, you need to split them into two groups. In one group you put all your priority creditors, and the other your secondary creditors. Priority creditors are ones where the consequences of not paying are serious, such as your mortgage. Secondary creditors are generally unsecured debts such as credit cards, store cards and unpaid household bills.

Before you can make offers to your creditors, you need to be able to demonstrate how much you can afford, otherwise they will not know if your offer is reasonable or not. You do this by preparing a personal financial statement showing all your income and expenditure. Do not include your secondary creditors in this for now. Your financial statement will show you how much money you have left over each month to go towards your debts.

This is when you write letters back to your creditors to make offers of payment. The fairest way to do it is to share out what you have spare proportionately among your creditors. This will be the easiest to justify and defend if you are challenged over the amount. Do not be persuaded to increase your offer to one at the cost of another, and start to make the payments you have offered even if they refuse your offer. That way at least you are continuing to pay off some of the debt.

This kind of personal debt settlement can be effective, but you need to know what you are doing and be very well organised too. If you do not feel confident about taking on the process yourself, you could approach a debt management or debt settlement company to help you. They will go through your finances with you and make a proposal for a way forward that best suits your needs.

If you do decide to talk to a professional debt advisor, you should be aware that some are better than others, and that some are definitely to be avoided. To make sure you get good advice, you should only approach reputable organisations who have been in business some time, and who can demonstrate a history of successfully helping people like you. You should also approach more than one, so you can make a comparison between what they offer you.

Read a full guide to debt negotiating on the author's Debt Help Website.

Are Debt Settlement Companies Safe?

2009-12-07T13:47:00.000-08:00

The current economic climate has certainly brought many bad consequences with it, but one perhaps less obvious effect is the glut of rip-off merchants getting on the debt help bandwagon. I suppose it was inevitable that some people would see the financial problems of people as an opportunity make a quick buck, but it is still disheartening.

The good news is that these people are the exception and their irresponsible practices should not be taken to mean that the process of debt settlement (or negotiation as it is often known) is inherently bad or that the good debt settlement companies do not help many thousands of people to get out of debt each year. You just need to be clear in your mind about what the process involves, so that you know what to expect and what questions to ask if you do approach a company. You also need an awareness of the things to look for when you want to find a reputable debt settlement company, so that you can easily avoid the bad ones.

Debt settlement should not be confused with debt management or debt consolidation. Unlike the other two, it involves a negotiated reduction in the actual amount of money you owe. With debt management and consolidation, you still end up paying the full debt back, just on different terms which make it more affordable for you.

Settlement companies are specialists in negotiating with creditors to get substantial discounts off the original amount owed. It is not unusual for more than half the debt to be written off. By achieving these huge reductions they are able to offer you a much lower monthly repayment amount than a debt management plan could. Debt settlement is usually for people with very serious debt problems, who may well be considering drastic alternatives such as bankruptcy.

Any debt help company needs to be paid for their services, but the ones who have caused concern and dissatisfaction are those who have charged substantial up front fees and then not delivered on the promised debt reduction. With a good debt settlement company you will not have this problem, as their fee is likely to be only a percentage of the amount they manage to reduce your debts by. On this basis you cannot lose. The best ones even offer a written guarantee of what the results of your settlement will be, so you are perfectly safe. Go to the right debt settlement company for help and you will not have a problem.

The way debt settlement works is that you stop paying your creditors and start paying a regular amount in to a separate account. The debt settlement company will deal with your creditors on your behalf, and negotiate deals to settle your debts at the best possible rates. They know exactly how to time this to maximise the discounts they can achieve. The money you pay into the account builds up and is used to settle debts as each one is agreed.

One of the main benefits of using a debt settlement company is that you only have one monthly payment to find, and this is an amount that you can afford. You are also freed from being hounded by creditors as the settlement company deals with them for you. Debt settlement provides a much less drastic alternative to bankruptcy, and leaves you debt free within a set time period.

Debt settlement is tried and tested in the US though is not widespread in the UK because there is a good alternative, called an IVA. This is an individual voluntary arrangement and also involves writing off large portions of your debt to make it affordable to pay off the remainder in a set period.

So debt settlement companies are not all bad, but if you are considering it you should take great care to choose the right company to work with. The best starting point is to look for well established and reputable settlement companies, who have a history of solving serious debt problems successfully. Always apply to more than one, so that you can compare what you are offered, as proposals do vary.

Read recommendations for reputable online debt settlement companies.

Negotiate Credit Card Settlement - How To Settle Your Credit Card Debts

2009-12-03T12:10:00.000-08:00

We all use credit cards and we probably all spend a bit more than we really ought to, but when finances are tight it is really easy to slip gradually into fairly serious debt. It gets to a point where it becomes a vicious circle as your card bills rise, leaving you less and less each month, leading to even more reliance on credit cards. The end result for a great many people is a mountain of debt to many different card companies, with no apparent way of ever getting enough money to pay it all back.

So you wonder what to do and look around at possible solutions. Too many people end up trying to solve their debt in ways that simply push the problem further down the line. Taking out new cards to pay off the old ones for example or getting a debt consolidation loan to pay off all the cards. The problem here is that you are not actually getting rid of any of your debt, just transferring it somewhere else.

When your credit card debt has built up to a really serious amount, as it does for many of us, you need to find a solution that will actually lead to the card companies being satisfied and leaving you alone. If your monthly payments are far more than you can afford, then your solution has to involve negotiating new terms to settle the debts. This can range from freezing interest charges and agreeing smaller payments, to agreeing to write off a proportion of the debt in exchange for a lump sum payment.

The solution you end up with will depend on many factors, but you essentially have three choices. You can either try to negotiate with the card companies yourself, use a debt management company to set up a payment plan (Debt Management Plan), or use a debt settlement company to reach a negotiated settlement with your credit card companies.

Anyone who has tried negotiating with a credit card company will know how tough this can be, and it is not for everyone. However, if you are able to do it well, you can maximise the benefits of any reductions you manage to achieve. The process is made harder if you do not understand the way card companies work and the systems they use when dealing with unpaid debts. An inside knowledge can mean the difference between getting agreement to write off 60% of the debt or being sued instead.

The debt management approach is to use debt negotiators to agree new terms with your creditors, which allow you to just make one affordable monthly payment instead of all your previous debts. The process does not involve writing off any of your debt, but usually does mean freezing or reducing interest charges or late payment fees.

Using a debt settlement company to negotiate credit card settlement means that experienced negotiators work on your behalf to agree new deals with the credit card companies to settle your debts. This often, but not always, means that the debt is drastically reduced in exchange for a lump sum payment. As you are unlikely to have a lump sum to settle with, you just keep paying a regular monthly amount into a separate account, which builds up and is used towards the settlement payments.

While debt settlement companies are common in the US, it is not a widespread practice in the UK, because there is a better alternative, called an IVA. This is an Individual Voluntary Arrangement, and, like debt settlement, usually involves writing off a good proportion of your debt.

If you would like to negotiate settlements on your own, there is help and advice available on how to do this. If you wish to use a debt management or debt settlement company to help you, there are a few things to bear in mind when deciding which ones to approach. You may hear stories about debt settlement being a rip-off or a scam. The fact is that debt settlement is not a scam, but some companies have used it to take advantage of people in debt, giving it a bad name.

As well as not wanting someone who is trying to rip you off, neither do you want someone who just isn’t very good at debt settlement negotiation. You therefore need to take care to use only reputable companies. Check that they are well established and have a track record of successfully negotiating credit card settlement for many other people. You should also approach two or three companies in order to compare what they can offer you. Most have a website with a very simple online form to start the ball rolling.

Read recommendations for reputable online debt settlement companies.

Can You Be Sued For Credit Card Debts?

2009-12-02T13:15:00.000-08:00

When credit card debts go unpaid, it is not at all unusual to be threatened with legal action. When this happens, it is reasonable enough to wonder if they really can sue you or whether this is just another ploy to scare you into paying back the money they are chasing. Debt collection agencies often use this threat, and we all know that some of the less reputable collectors are not afraid of some slightly underhand practices if they think it will get a result.

It is certainly possible to be sued for a debt by a credit card company, though it will cost them money to do it, so it is by no means guaranteed that they will. They will weigh up lots of factors when they are deciding whether to sue for a debt or not, because all they are really interested in is doing whatever will cost them least and get them the most money back.

Being sued for debt is certainly something you should avoid if you possibly can, not least because a court order against you has a lasting affect on your credit rating and could lead to problems getting credit for quite some time. It is most likely to happen if you just ignore calls from the credit card company or debt collector. The best thing you can do to avoid being sued is to take action to deal with the situation. Ignoring a problem never makes it go away.

What action you take will depend on your particular situation. Assuming you have quite a serious amount of debt, and cannot afford to keep up with the repayments, your best option is probably going to be debt settlement. The reason that this works in serious situations is that it involves reducing the actual amount of debt you owe, making it more possible to pay the remaining debts off at a rate you can afford.

It is possible to negotiate debt settlement yourself if you have a good understanding of how credit cards operate, but for most of us, we need the services of an expert who understands what makes the card companies tick. A good negotiator might be able to get well over half your debts written off, whereas someone without their experience and negotiating skills may get no agreement at all and you still end up in court.

So you best bet for a serious credit card debt problem is to find a good debt settlement company to work on your behalf. There are of course fees involved in debt settlement, but these are normally just a fraction of the amount that they manage to save you, so you are still much better off. The principle is that they deal with your creditors on your behalf to agree new, reduced terms for settling your debts. This will often involve writing off large sums of money in exchange for a one-off payment. It can also include freezing or reducing interest charges and re-structuring repayments.

The net result should be that your overall debt is drastically reduced, and you just have to make one monthly payment into a special account. The negotiations take varying amounts of time, and as the money in your account grows, it is used to pay the card companies the agreed settlements.

The theory is straightforward and it works, but you need to be cautious over choosing your debt settlement company, as the process is open to exploitation by less scrupulous organisations and individuals. People in debt are in a vulnerable situation and can be easy pray for companies who are great at charging expensive fees without actually delivering on the settlement.

Be very careful to choose long established companies with a good reputation. The best ones will have already settled huge amounts of debt for many people, so these are the ones to look for. It also makes sense to contact two or three and see which one gives you the best offer, and also which you feel most comfortable working with.

Read recommendations for the most reputable and best debt management companies in the UK and US.

Short Term Online Personal Loan - Advice About Online Cash Advance Lenders

2009-12-01T12:33:00.000-08:00

If you are in need of a short term online personal loan, you are in luck, because many companies in the UK and the US now specialise in exactly this type of lending. With the development of the internet, it has become extremely easy to find websites where you can apply for a short term online personal loan and have cash in your bank account within as little as an hour after you apply online.

This type of online lending is known as payday lending and is always for relatively small amounts of money and for short periods of time. One advantage of this type of loan is that a lot of these online lenders do not require a credit check before agreeing to lend you money. This is extremely useful if you happen to have problems with your credit rating.

Online payday loans are more accessible than most other personal loans because of the fact that they are for smaller amounts and for only a few weeks at a time. This makes it less risky for the lenders to give you cash, as they can be sure of getting it back once you have been paid again. This is why the main things that a payday loan company will check with you before agreeing to give you a loan are your employment status, how much you earn and your bank account details.

So provided you are in work and have a bank account, you should not have a problem getting some money, but there are some things to bear in mind about using payday loan companies. Firstly, you should think carefully about why it is that you require this cash in the first place. These short term online personal loans are really only for unusual situations such as a sudden unexpected bill or expense. You need to take care not to use them to fill a general gap in your income that is not caused by any one-off situation. This sort of loan will not help you solve a debt problem and there are other, much better ways of doing that.

Also, you need to take care about the companies you use for payday loans. The fact that they are now a widespread online service means that all sorts of people have got in on the act, and they are not all responsible or reputable. The interest rates on payday loans are extremely high, but provided you only have the loan for the few weeks you should have, this is not a problem. The difficulties can arise if you do not pay the loan back on the due date. Less reputable companies will keep adding disgracefully high penalty charges to your loan, and your debt can become impossible to get out of.

For these reasons you should ensure you use only well established short term online lenders, who have a good reputation for responsible lending and having helped many other people in your situation. The easiest way to avoid the less scrupulous companies is to follow personal recommendations and reviews. It is also sensible to approach more than one company, so that you can compare rates and charges.

Find reviews and recommendations for the best direct payday lenders in the US and UK.

How Do I Eliminate My Consumer Debt - Advice On The Best Ways To Pay Off Debt

2009-11-30T12:14:00.000-08:00

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.

Can A Collection Agency Sue For Debt - Strategies To Help Avoid Being Sued For Debt

2009-11-28T01:29:00.000-08:00

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.

Best Debt Management Companies

2009-11-24T14:52:00.000-08:00

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.

Where To Borrow Money When The Banks Won't Loan It To You

2009-11-23T14:58:00.000-08:00

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.

Get Rid Of Debt Plans - Information and Advice On Debt Payment Plans

2009-11-17T14:06:00.000-08:00

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.

Free Money To Pay Off Debt - How To Get Rid Of Debt

2009-11-06T14:35:00.000-08:00

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.

Where Can I Borrow Money With Bad Credit

2009-11-05T12:56:00.000-08:00

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.

Borrow Money UK - Borrowing Options In The UK

2009-11-04T12:01:00.000-08:00

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.

I Need To Borrow Some Money To Get Out Of Debt

2009-11-02T15:17:00.000-08:00

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.

Where to borrow money when the banks won’t loan

2009-10-31T16:49:00.000-07:00

Fortunately banks are by no means the only institutions which lend money to people. If a bank will not let you borrow money, the chances are that you have a credit rating which is less than perfect. While this can be a problem for a lot of lenders, there are plenty of others who specialise in people with bad credit.

A poor credit rating does send a signal to lenders that you are going to be a higher risk than someone without your credit problems, so the terms of bad credit borrowing can often be adjusted to compensate for this. What that means is that if a lender thinks they are less likely to get all their money back by lending to people with a history of credit problems, they are probably going to charge a higher interest rate to make up for their increased losses.

However, there are other types of borrowing where a bad credit rating is far less of an issue anyway. The main one being secured loans, where the money you borrow is secured against something you own, usually your house, but sometimes a car. What this means is that the loan is legally tied into the ownership of your home, so if you were to default on the loan and not pay it back, the lender could have your house sold to get their money. Because they have this ultimate safety net to fall back on, they are much more willing to overlook bad credit ratings and lend much higher amounts of money.

The other type of lending which often does not rely on a credit report is for very short term loans for small amounts of cash. These are referred to as payday or cash advance loans. These are always for relatively small amounts and usually only for a period of weeks, or months at the most. The reason credit reports matter less is that the lender is unlikely to be lending you any more money than you will be getting in your next pay packet. So provided you prove that you have a job and will be getting paid at the end of the month, they do not usually worry about your credit rating.

You need to be careful if you are considering either of these types of borrowing. Secured loans put your home at risk, so for fairly obvious reasons you need to consider these carefully and be sure that you are going to be able to keep up with repayments. Knowing that they have your home to cover the debt, some less scrupulous companies may not be that careful about assessing your ability to repay the loan, and not very understanding if you do get into difficulties. You should therefore be very careful when you are selecting a company to use for such a serious undertaking.

Payday loans are for small amounts of money, but the interest charges are very high if you use the loans for longer periods than are intended. Like secured loans, this form of borrowing is a little open to abuse by less responsible lenders, who will be only to happy to slap outrageous penalty charges on you if you do not pay the loan back on time. Take care to seek recommendations on well established and reputable companies, and always get quotes from more than one.

Read recommendations for the most reputable direct payday lenders in the US and UK.

Why Is Budgeting Important - How Budgeting Can Turn Your Finances Around

2009-10-30T17:01:00.000-07:00

A budget is an extremely useful tool which can help you control your financial situation. Many people who get into problems with debt or overspending do so at least partly through not fully understanding where their money is going. By using budgeting techniques you can get a clear picture of exactly what you spend your money on, and take action to adjust that balance if it is not what you want to be doing. In other words, it is not about stopping all expenditure, but rather choosing what you spend your money on and making sure you have money free for the things you really want.

Working to a budget really should not mean permanent thrift and misery; it is about understanding and control, and the end result should be that you have more money to spend. The difference an effective budget can make is enormous, and it really is largely about getting a clear understanding of where all your money goes to, so that you can make sure that matches up with the amount you have coming in.

If you buy a coffee once or twice a day, it costs very little each day, so you don’t even think about it. However, if you add that up and work out how much that is every month and every year, it becomes a substantial amount of money, which you may well decide you would rather do something else with. If you buy lunch every day at work, would you really rather do that than bring something from home and have an extra holiday each year? It really does make that much difference and most people are making these sort of choices on a daily basis without knowing it.

So understanding that a budget can be a useful thing is a bit of a no-brainer, but then comes the part where many people fall down - doing something about it. Understandably, a lot of people do not get started down the budgeting route simply through a lack of understanding of how to go about it. There are various options you can consider, but in essence what you need to find is a system you can follow that gives you an easy way to keep track of where your money is going. If you are reasonably comfortable with figures and spreadsheets, you can do this completely from scratch. You can download free budget sheets online to get you started.

The problem is that unless you are very determined, it does not take much to be put off following the whole process through and putting in the work that is required to prepare your own budget manually. The alternative is to use some sort of budgeting tool, of which there are many on the market. The reason these are so popular is that they take all the hard work out of budgeting and mean that you only need spend a small amount of time keeping track of your finances. Keeping the process as simple as possible is actually quite an important factor in determining whether people put the budget into action and stick to it or not.

Even with a budgeting tool, you will need to spend some time initially inputting all your financial information so that you can come up with your monthly budget. Once that work is done, however, the all important monitoring and updating is so much easier with a budgeting software tool. Some packages will even pull your online bank statements into the system so that all your financial information is integrated in one place. One of the most useful aspects of a good budget tool should be the reporting function. This is where you are able to really analyse your spending, to show you in a clear and simple way where exactly your money goes, where spending is out of control and which areas require your attention.

Read reviews and recommendations on home budgeting software.

Why Is Budgeting Important - How Budgeting Can Turn Your Finances Around

2009-10-28T15:14:00.000-07:00

Small Loans With Bad Credit - Advice On How To Get Small Loans When Your Credit Is Bad

2009-10-26T14:26:00.000-07:00

Having problems on your credit rating can wipe out access to borrowing money from a huge range of lenders. Most companies that lend larger amounts of money need to be sure that the people they lend it to are likely to pay it back, often over a considerable period of time. This is why your credit rating matters and your overall credit needs to be pretty good. However, if you only require a smaller amount of money, and you can pay it back relatively quickly, there are certainly loans that you can access, no matter how bad your credit is.

The main type of loan where your credit report is often of little interest is a payday loan. These are always for small amounts of money and always for a very short period of time. The loans are usually just until your next payday, hence the name. The reason that bad credit does not stop you getting one of these loans is that the loan is for a very short period of time, so the lender is only really interested in knowing that you will have enough money going into your bank account at the end of the loan period to cover what you have borrowed.

For this reason, the main criteria for being accepted for a payday loan are that you have a job and a bank account. While some companies still want to do a credit check, there are plenty who either will not check your rating, or who will be very flexible about any problems with your rating. Payday loan companies often used to require you to fax through various proofs of employment, etc, but with certain online companies you can now go through an extremely fast, entirely online application process, and have the money in your account the same day as you apply.

Payday loan companies will often require that you have a debit card or that you set up a direct debit with them to pay back the money borrowed. If you do take out one of these short term cash advance loans, it is very important to pay the full amount back exactly on time. The fees charged are reasonable when you look at them as a flat fee for a service, but when you compare them in terms of annual percentage rate with other types of borrowing, the interest rates are extremely high. So if you didn't pay the loan back on time and continued that debt for a longer period, the interest charges would soon mount up. Some people who have failed to repay a payday loan have ended up owing much more in interest than the amount they borrowed in the first place.

It is therefore important to understand what payday loans are and when you should use them. They are not designed to tackle ongoing debt problems, and if they are used in this way, it is almost inevitable that you will end up with bigger problems. They are for dealing with one-off, unforeseen bills or expenses, and tiding you over until your next payday. If you need to borrow money for longer, or require it to pay off other existing debts, then payday loans are not the answer.

The fact that such loans can lead to high interest charges if not used properly, does attract some lenders who are less than scrupulous and who add ridiculous penalty charges onto any late payments, making it very difficult to ever pay the loans off. For this reason you need to take great care when choosing a company to borrow from. Check that they are reputable and make sure you know what the terms and conditions are for any late payment interest. It is also worth getting quotes from more than one to compare rates.

Read recommendations for direct payday loan lenders.

Should I File Bankruptcy Or Not - How Else Do I Get Rid Of Debt

2009-10-24T14:44:00.000-07:00

Serious debt problems can be very stressful and are often seen as insurmountable. When the amount owed becomes more than you could ever hope to repay, it is easy to think there is no way to begin to tackle the debt, which is when many people turn to bankruptcy as the only way out. In some cases bankruptcy is indeed the best long term solution, but it is a drastic step to take and should never be the only option considered.

In the UK the government introduced a scheme called Individual Voluntary Arrangements, or IVAs, which were originally designed as an alternative to bankruptcy for small businesses. They are now very widely used for problems of personal debt, as the consequences are less serious than with bankruptcy. They provide a full and final settlement of unsecured debts, without having the lasting legal restrictions or the stigma that filing for bankruptcy brings with it.

In the US, the most common and most effective alternative to bankruptcy is debt settlement negotiation. This has the same effect as an IVA, in that you end up with one affordable monthly payment, and a large portion of your debts are written off.

There are many similarities between the positive aspects of an IVA and those of declaring bankruptcy. With both courses of action your debts immediately stop mounting up and all the dealings with your creditors are taken over by someone else. This puts an end to the constant hounding by creditors that some people suffer. Unlike in bankruptcy, IVAs only cover unsecured debts, so things like mortgages cannot be included. This does mean that you are far less likely to lose your home with an IVA.

There are costs involved in either declaring bankruptcy or setting up an IVA. The companies who do this need to be paid, either in fees as with bankruptcy, or usually through your monthly payments with an IVA. However, the costs involved in setting up an Individual Voluntary Agreement should generally be less than those for filing bankruptcy.

Debt Management Plans are often put forward as alternatives to bankruptcy, and while these also result in a single monthly payment, they do not actually write off any of the debt you owe. They are generally for people whose situation is not quite as serious as someone who might need an IVA or debt settlement. Unlike IVAs, debt management plans are not legally binding agreements, so if any of your creditors do not want to play ball, they don’t work. With an IVA, you just need the creditors for 75% of your debt to agree to the arrangement and the rest are legally bound by it too.

To qualify for an IVA you normally need to have at least £10,000 worth of debt to more than one unsecured creditor. You will also need to be a UK resident with some regular income to pay towards your debts. Because IVA providers get fees from setting up these arrangements, some less scrupulous companies may recommend them even if they are not the best option. For this reason you need to ensure that you find reputable companies and check with more than one in order to compare offers.

Read recommendations for the most reputable IVA UK Companies.

Can You Be Sued For Credit Card Debts - What To Do If You Are Being Sued For Debt

2009-10-23T02:27:00.000-07:00

Being sued for debt is a frightening thought, but is an increasingly likely scenario for many consumers struggling through the credit crunch. One of the most common forms of consumer debt is money owed to credit card companies. The reason for this is not least because it is often very easy to get credit in the first place and much harder to keep track of plastic spending compared to hard cash coming out of your bank account. When times get tough, it is often credit cards we turn to in order to pay the bills or buy the things we need.

If you do find yourself in a serious debt crisis where you are unable to meet your commitments to pay back what you have spent, you may well be threatened with legal action by the credit card companies. They are well within their rights to sue you for their money, but they are only likely to do this if they think that is the course of action which is most likely to get back what you owe them.

Ideally, you should not be letting things go as far as being taken to court, but if you are already at that stage, it may not be as bad as you think. You cannot be sent to prison for an unpaid credit card bill if you have not been to court before. If the court judgement goes against you, the judge will order you to pay back the money you owe at a rate which the court thinks you are able to pay. They will examine your finances in order to make this judgement about what you can afford each month.

The best option is of course not to let your debts mount up in the first place, but this is easier said than done. If you already have substantial credit card bills that you are unable to pay, your best option is to try to negotiate a settlement with the card companies. This too is easier said than done, particularly if you do not understand how card companies operate.

Many people in this situation turn to debt settlement agencies, but you will need to pay them for this service, so ultimately it ends up costing you a lot more than if you do it yourself. If you understand how credit card settlement works, and can time your negotiations properly, you should be able to come to an agreement that will result in a large proportion of your debt being written off.

It is important to know what to say to the card companies and you need to understand the procedures they go through in order to time your negotiations to achieve the best results. Getting this right can make the difference between not reaching any agreement to settle, and achieving a settlement that writes off a huge chunk of what you owe, getting you out of debt in one stroke.

With the right guidance and information, you can negotiate directly will all the credit card companies you owe money to, and achieve the best possible settlement deals without paying substantial fees to a debt settlement company for their services.

Find out how you can learn how to settle debt.

Can A Credit Card Company Sue You - Being Sued For Debt How To Avoid It

2009-10-21T14:46:00.000-07:00

Credit card companies and collection agencies are quite within their rights to take legal action against you if you have failed to pay a debt that you legitimately owe. Taking out credit is a legal agreement, so if you fail to keep up with your end of the bargain by not paying the money back when it is due, you can be sued.

This does not mean that it is a foregone conclusion that you will be sued, as it can depend on many other factors. Taking someone to court will obviously cost the card company money, so they will want to weigh up the cost in legal fees and staff time, compared to what they are realistically likely to get back at the end of the process.

The fact that you are sued does not magically bring money out of the air for the card company, so if you genuinely cannot afford to pay back what you owe, being sued will not change that. If they successfully sue you, you will be ordered to pay back the money at a rate which the court decides you can afford, after looking at your finances.

You do not want a court judgement against you if you can help it, of course, so it is much better to deal with the problem before it gets to the stage of going to court. By far the best way to deal with credit card debt is to agree a settlement with the company. This may sound easier said than done, because it is, but it is perfectly possible to agree settlements for much less that you owe, if you understand how the card companies work.

My usual advice to anyone in debt would be to never ignore the issue and to talk to your creditors and try to establish a relationship. However, credit card debt is quite a distinct area of debt and requires some specialist advice. For instance, at certain times, it may actually help to ignore approaches from the card company, because timing, in settlement terms, is everything. Judging when to negotiate and when not to, can make the difference between not achieving a settlement and wiping out most of your debt.

The main choice you have to make if you are in serious debt to credit card companies is whether to try to reach settlements with your creditors by undertaking negotiations with them yourself, or whether to use a professional company to do this on your behalf. If you wish to do it yourself, it is difficult if you do not have any experience or understanding of how card companies operate, but is still perfectly possible if you get the right help and advice.

A debt settlement company will know what to do and the good ones are likely to get reductions on your debts of up to 60%, but you will need to pay them a proportion of what they save you as their fees. The advantage of doing it yourself is that you maximise the reductions you achieve by not having to pay a settlement company.

Read a detailed guide on how to negotiate debt.

IVA UK - Information and Advice On How To Find The Right IVA Company

2009-10-19T15:07:00.000-07:00

An IVA is a debt solution which is only available in the UK. It stands for an Individual Voluntary Arrangement and is a formal agreement between you and your creditors, which is negotiated by an Insolvency Practitioner. The basis of the agreement is that you make payments of an agreed amount over a specified period of time (usually five years) after which your debts are considered to be fully settled. This usually involves writing off a significant portion of the debt.

From the date of the IVA, the amount of your debt is usually frozen and you should not be charged any further interest or penalty charges. It is often seen as a better option than bankruptcy for people who are faced with the need to get rid of debts which they can’t afford to repay. Even though an IVA lasts longer then bankruptcy, it does not have the stigma or some of the legal consequences that bankruptcy brings with it.

For example, you can carry on using your bank account without declaring that you have an IVA, and there are no jobs that you will be prohibited from working in, as there are for anyone who has been made bankrupt. Also, your house may be excluded from the IVA if the Insolvency Practitioner agrees, so the risk of losing your home is less with an IVA.

An important point about an IVA is that, unlike a Debt Management Plan, which is a completely informal arrangement, the IVA is legally binding. If at least 75% of your creditors agree to the IVA, then the remaining ones are bound to it whether they like it or not. The 75% agreement relates to the proportion of the debt in monetary terms, not the number or creditors. So if 75% of your total debt was owed to two companies, you would only need the agreement of those two companies for the IVA to also bind the other people who are owed money. So if you have already looked at a Debt Management Plan or other informal agreement, and some of your creditors will not agree to it, an IVA could be a better alternative.

IVAs do of course cost money, because the companies who negotiate and administer the schemes need to be paid for their work. Generally you do not need to find this money up front and it will be included as a proportion of the monthly repayment amount that you agree. The cost is still less than the cost for declaring bankruptcy, and provided a good proportion of your debt is written off, it can seem like money well spent.

Care should be taken when selecting an IVA company, however, as rates can vary enormously. You must also bear in mind that when discussing the options for dealing with your debts, these companies stand to gain financially from the decision you make. You should therefore take care to select a reputable company in the first place, who will properly consider your particular situation, offer you advice then allow you to choose the best option, rather than pressurise you to go for the scheme that will generate the biggest income for them.

Read more about IVAs, including recommendations for the top IVA UK Companies.

IVA Specialists - Advice And Information To Help You Select The Best IVA Company

2009-10-18T13:15:00.000-07:00

An IVA or individual voluntary arrangement is an increasingly popular option for people in the UK who are faced with serious debt problems. It was originally an initiative of the UK government, intended to provide an alternative to bankruptcy for small businesses, but is now widely used for personal debt. In the US, the nearest equivalent is debt settlement, which is also a radical alternative to bankruptcy. An IVA has several advantages over bankruptcy, which is a more serious course of action, but it is still a legally binding agreement so should not be entered into without proper consideration.

All IVAs must be handled by properly licensed Insolvency Practitioners, but the initial arrangement is normally dealt with through one of the many IVA specialists now providing this service in the UK. As in any area of work, some are better than others, and given the serious and lasting implications for the person seeking an IVA, it is important to take care to select the right IVA company to deal with your situation. I think it is helpful before applying for an IVA to have a good understanding of what it involves, so I am going to summarise the main points first. Then we can look at what to consider when looking for a company to handle your IVA.

An IVA is designed for UK residents, usually with at least £15,000 of unsecured debt to at least 3 different creditors, though some companies will do it for less than this. Unsecured debt means debt which is not secured against your home, such as a mortgage or secured loan. Unlike a Debt Management Plan, which is an informal agreement with creditors, an IVA is a legally binding arrangement. Provided at least 75% of your creditors agree to it, then any creditor who objects is also bound by it. Therefore if you have tried to set up an informal agreement and it has failed because some creditors will not agree, an IVA can be a way around that situation.

The agreement is normally for five years, and involves a fixed monthly payment to your practitioner over that period. Professional fees for the Insolvency Practitioner are normally built into the monthly payments.

Once you set up an IVA, your creditors can't take any further action against you, and can’t hassle you for payment. Any contact has to be through your Insolvency Practitioner. As they cannot take action during the arrangement, you cannot be made bankrupt during the course of the IVA. However, if you default on payments and therefore break the agreement, you can still be made bankrupt.

There will be no newspaper adverts or other notices that can lead to the stigma sometimes associated with bankruptcy. Neither will you be prevented from working in certain jobs as you would be with bankruptcy.

When looking around for the best IVA specialist, the most important thing to say is that they vary a lot, so do not just go for the first one you come across. Follow reviews and recommendations, and bear in mind some of the following:

It is helpful if the application process is as simple as possible, but remember that one way or another they need to get quite a lot of detail from you, otherwise they cannot give you proper advice. They need to know the facts in order to offer the best alternatives for you. One of the most convenient ways to apply is to submit an online form with some basic details, then they can call you back to get any other information they require.

Apply to more than one and compare not just the repayments offered, but how you feel about the people you are dealing with. Do they treat you as an individual and cater for your particular needs, or are you being squeezed into a box that is more to do with their needs than yours? You will need to discuss all sorts of personal information with these people, so you need to feel comfortable with the individuals concerned.

Be very wary of ridiculous boasts of writing off 90% of your debts. This just does not happen and is misleading. Look for companies that are well established, not newly set up, and which specialise in IVAs and debt management, rather than ones who do a bit of it as an add-on to their other business.

Read recommendations for the most reputable UK IVA specialists.

Money To Borrow With Bad Credit - Advice On How To Get Cash When Your Credit Is Poor

2009-10-17T13:36:00.000-07:00

A bad credit rating can prevent you getting credit with the vast majority of lending companies. Personal loans and credit cards are likely to be completely out of the question, which can be a real problem when you find that you need extra cash for something.

However, there are certain types of lending that either do not require a credit check at all, or which will still lend money even when there are problems with your credit. There are really two options open to you, depending what your requirements are. If you need a small amount of cash for a very short period, then a payday loan could be the answer. If you need a larger, longer term loan, then your only option is likely to be a secured loan.

Payday loans are never for large amounts of money and are usually just to cover a shortfall until your next salary or wage payment arrives. In other words they are not the solution if you need to borrow money for anything longer than a few weeks. This is important because if you were to go for a payday loan and then find that you could not repay it on the due date, you are likely to be penalised quite strongly by excess charges.

The reason you can get payday loans even with bad credit, are that the lender does not need to care what your credit record is like, as long as you have enough money coming in your next pay check to cover the loan. So the main thing a payday lender will look for in order for you to qualify for a loan is that you have a steady job. Payday loans are for unexpected emergencies and one-off expenses, and should never be seen as a way to tackle ongoing debt problems.

Secured loans, sometimes known as homeowner loans, are an entirely different ballgame. When you borrow money in this way, the loan is secured against a substantial asset that you own, usually your house. This means that your home is legally tied into the loan, so that if you were to default on payments, the lender could sell your house to get their money back.

Because the loan is secured against such a valuable asset, the lender is far more willing to take a chance on people with bad credit, because they know that ultimately they can always recover their loan through that last resort of selling your house. For the same reason, you are usually able to take out a much larger secured loan that you could an unsecured one. Needless to say, with the possible consequence of losing your home, secured loans are not something to be entered into without very careful thought.

If your bad credit report is stopping you borrowing money and you are not sure why your rating is not good, it would be well worth checking your credit report for yourself. You need to do this so that you can ensure there are no mistakes on it, such as records which are simply wrong, bad debts which have been settled, or things which should have been removed by now. US citizens can get one free credit report each year, and UK citizens can sign up for a free trial and see their report free of charge that way.

Find recommendations for direct payday lenders in the US and UK.

Online Payday Cash Advance Lenders - Advice And Information On Using Payday Loans

2009-10-15T13:09:00.000-07:00

Payday loan companies, or cash advance lenders, are specialist lending organisations, who lend money to people who need relatively small amounts of cash very quickly and for short periods of time. The term payday loan comes from the fact that such loans are normally given on the condition that they are paid back immediately on the borrower's next payday.

These cash advance lenders specialise in helping people out when they find themselves unexpectedly short of cash, usually in unforeseen emergencies or when facing unexpected bills. The loan is literally just to tide them over until they next get paid. For this reason, the criteria for getting a payday loan are slightly different to most other longer term types of borrowing.

The most important thing the cash advance lender wants to know is that you have a job and a steady income. If you can prove that, then it usually does not matter if you have a bad credit record or even court judgements against you. Apart from this, most lenders will require you to be over 18 years of age and a citizen or resident of the country you are applying from. There are many online payday loan companies now, which have fast application processes that mean you do not need to fax through any documents or evidence.

Payday loans should not be seen as a solution to ongoing debt problems. The last thing you want is to get into a situation where you have to extend the lending term on a cash advance loan because you can’t pay it back. Because payday loans are designed to be very short term, the charges and interest rates that apply if they are taken out for longer can be very heavy indeed. If you take out a payday loan and default on it, you will quickly see the charges building up and could soon find that the interest due is more than you originally borrowed. You should not take out a loan unless you are really sure you can pay it back on time.

When looking for a payday loan you should always look for recommendations and compare the charges that will be applied. In the US the charges are often dictated by the state in which you reside, so will vary depending where you live. Some states prohibit payday loans and all states that do permit them issue licenses, so always check that a payday lender is properly licensed for your state. A surprising number of companies operate illegitimately without licenses.

As payday loans or cash advances are usually only for a few days, the cost of borrowing is normally a fixed fee. It does not look like much money because the amounts being borrowed are quite small, but if you look at it as an annual Interest rate, you will see that it is huge compared to other loans or credit cards. Late payment penalties can be even worse. Payday loans are extremely useful and serve a real purpose, but only if you use them for what they were designed for - one-off emergencies, and always, always pay them back on the due date.

If you do have debt problems, then do not be tempted to take out a cash advance. It will not solve your problem and may well make it worse. The only long term solution to dealing with debt is to negotiate settlements with your creditors. The purpose of this is to agree to wipe out as much of the debt as possible, and set new repayment terms for the remainder. You can find free advice online telling you exactly how to do this.

Read recommendations for reputable payday loan companies in the US and UK.

Negotiate Credit Card Settlement - Find Out How To Wipe Out Your Credit Card Debts

2009-10-14T12:30:00.000-07:00

The fact that credit cards are so easily available to most of us when we need to spend a bit more than we actually have, is one of the reasons why so many people get into credit card debt. Such debts often mount up gradually and before we know it they have suddenly grown so large that it is beyond our ability to pay them off.

This is when people sometimes jump at the first solution they can think of, which in some cases can often make things worse. Debt consolidation loans, for example, are often used by people to pay off credit cards, but all that happens is that the problem is transferred to another lender, often leading to greater interest payments in the long run. Others consider bankruptcy, which is indeed a serious step and should not be entered into lightly. Bankruptcy will rarely be an appropriate response to credit card debt.

Negotiating a settlement with the card companies or collection agencies is always the best answer to credit card debt. The idea being, to get an agreement to write off as much of the debt as possible to begin with, leaving only a fraction of the debt to pay. It doesn’t matter if you don’t have money to pay off a lump sum, there are ways around that. The main thing is to get your negotiation right and get rid of the vast majority of your debt in one go.

Of course, doing this is easier said than done. Card companies and collection agencies are not always the easiest people to negotiate with, and you will often be met with an unwillingness to co-operate. In this situation many people turn to lawyers and professional debt settlement companies to help, but these people all charge significant fees for their help. There are other sources of advice, and with the right guidance you can manage perfectly well the debt settlement professionals and save an awful lot of money.

What you need is a good understanding of the processes that the card companies go through, which will allow you to know exactly when it is best to approach them and what you need to say. By understanding how they treat bad debts and when they are likely to charge it off from their balance sheets, you can take maximum advantage and get the biggest possible discount on your debt. If you get this process right, you will typically be able to write off between half and 80% of your credit card debts. Without this understanding you are unlikely to ever achieve this level of saving.

You can get detailed help and guidance without paying expensive lawyers of debt settlement companies, and if you get the process right, you can even end up getting a better deal than most of the professionals would. Debt settlement fees tend to be about 20% of the debt, so by doing your own negotiation on a credit card debt of $20,000 will save you about $4,000 in fees.

Read advice on how to negotiate debt.

What Happens If You Don't Pay A Payday Loan - Consequences of Defaulting On A Payday Loan

2009-10-13T13:26:00.000-07:00

Payday Loans are very short term loans intended to give you a quick cash injection in an emergency. They are literally a loan that you have to pay back on your next payday. For that reason, they are always for relatively small amounts of cash and for very short periods of time.

The cost of a payday loan is normally a fixed fee, which looks fairly reasonable on the face of it, but if you do not pay the loan back on time as agreed, additional charges can soon mount up and you can find yourself owing more in interest than you originally borrowed. Payday Loans are designed for very short term needs, and if there is any chance that may need the money for longer, you should consider alternative means of borrowing.

The charges may not be large amounts of money, but as a proportion of the amount being borrowed they are substantial. If you look at the charges in interest rate terms they are extremely high, often over 1,000%. In the US the charges are sometimes governed by local state laws, so cannot be above a certain amount.

Failure to pay back a payday loan on time can lead to hefty penalty charges, which for some people can mean getting into a cycle of increasing debt that is hard to break out of. What will typically happen is that if you take out a payday loan and then find that can’t pay it off on the due date, you must inform the loan company in advance and arrange new repayment terms. This is known as refinancing or extending the loan and will lead to a new repayment plan which will include additional fees.

Different payday loan companies will have different arrangements and charges for extending loans, so it is worth checking all this out before you take out a loan. Some companies have truly extortionate fees, so you do need to be clear about what all the charges are before agreeing to a loan. If you do find that you are not going to be able to keep to the agreed repayment date, the main thing is to be sure to let the loan company know at least a full day before your loan due date, and preferably longer.

If you fail to notify the loan company in advance that you are not going to be able to meet the payment, your loan will be in default, which means the loan is immediately due for repayment and the consequences and penalty charges can be much more serious.

Payday loans can be useful in the right circumstances, but the key is not to use them to deal with serious debt, and not to use them regularly. They should be for unexpected emergencies only, and even then only if you are sure you can pay them off in full when you get paid. If you do have serious debt problems, you should approach a debt management company in the first instance, to see whether a payment plan may work for you. Alternatively, you could try negotiating with your creditors to reduce your debts. Help with doing this and with finding reputable debt management companies is available online.

Find recommendations for the best value direct payday loan lenders now.

Can Collection Agency Sue For Debt - Advice About Being Sued For Debt

2009-10-12T11:57:00.000-07:00

Being chased by a collection agency is at best annoying and at worst extremely upsetting. There is much confusion about the legal powers of debt collection agencies and in particular the question of whether they are able to sue you to get back the money which is owed. Assuming that the debt is genuine, whoever is owed the money has the right to take you to court to get an order for repayment. If you dispute the amount owed, or that you owe money at all, the most important thing is to communicate with the collection agency to explain your situation and, if possible, provide evidence to back your case.

Debt collection agencies are normally separate organisations acting on behalf of the company who is owed the money. In this case, it is unlikely that it will be the agency who will sue you, but they may instigate proceedings on behalf of their client. Most smaller businesses will not deal with debt collection directly, and will pay a collection agency to do it for them, often on a commission basis (hence the enthusiasm with which some agents operate!).

In some cases your debt will have been sold to the collection agency at a fraction of its value, in which case you now owe the money to the agency, not the original creditor. In these circumstances the debt belongs to the collection agency so the decision will be theirs whether to sue or not, and they are quite entitled to do so.

Collection agencies buy debts at knock down prices and make their income by collecting as much as they can of the original debt. It is always worth trying to negotiate a settlement with a collector rather than going to court. This will be their preferred option too, as they do not want to incur unnecessary costs. If the debt is substantial and they think you can afford to pay, it is more likely they will choose to sue you. If you are able to prove that you genuinely cannot pay what is owed, then show them the evidence and they are more likely to settle for a lower amount, if they believe that is the most they can get.

No-one wants to be sued, but it may help to have an understanding of what it actually involves, and what the possible outcomes may be if action is taken against you. It is easy to associate being sued with serious repercussions such as going to prison or being made bankrupt, but this is usually far more dramatic than the reality of the situation.

Procedures for the UK and the US are very similar. If you are sued successfully for a debt that you owe in the UK, the outcome will normally be a County Court Judgement being made against you, which will require you to pay back the debt. The important thing to bear in mind here is that the court will look at your financial situation and the terms of the repayment should be based on what you can actually afford. So you should not be ordered to pay back a lump sum that you simply do not have. If you are in this situation and have a judgement made against you, the most important thing to do is ensure you stick to the repayment plan set by the court. The reason for this is that if you fail to keep up with payments, the consequences of further legal action against you can be much more serious.

Clearly it is preferable to try to deal with any debts before they get to the stage of legal action, as the only real winners in court cases are lawyers. If you find yourself being pursued by a collection agency, you should first try to talk to them. See if you can establish a relationship and be up front about your situation. If they know you are being honest and taking a professional approach, they are more likely to be open to making a settlement.

No matter how large or complicated your debts are, your first approach should be to try to negotiate new terms for a settlement with your creditors. This is a tried and tested approach and help and advice is available free online. It is the only system that does not involve borrowing more money or paying a debt management company for their services.

Read reviews and recommendations for reputable debt management companies in the UK and US.

Erase Bad Credit Reports - Is It Possible To Wipe Out A Poor Credit Record?

2009-10-11T14:14:00.000-07:00

Would you like to erase your bad credit report? Yes of course you would - who wouldn’t. Unfortunately that does not mean that it is possible to do so. You can take steps to improve and help build up your credit rating, but there is nothing you can do to just erase a bad credit report. So why do you keep seeing things on the internet promising to do just that? Well you can be sure that the people responsible for such claims are making them in order to try to get money out of you one way or another; so do not be taken in.

In both the UK and the US there are three main credit reference agencies that hold your credit records, and no-one has the power to get anything on these reports changed unless there has been an error. It is true that sometimes mistakes are made which can result in your credit rating being worse than it should be, but if that is the case you can check it and have it put right yourself.

All American citizens can obtain one credit report each year without having to pay for it, and in the UK it is possible to check your credit report free of charge by signing up for a free trial of a service that is normally paid for. If you do find any errors on your report you need to write a letter to point out the mistake, explain the true situation and any other relevant facts and ask them to change it.

If you are experiencing problems with your credit report, check it yourself to begin with, in case there are problems which are causing it to be worse than it need be. Then consider a few things you can do to begin to work towards a better credit rating. First of all look at your current situation and see if you are doing anything that is likely to be contributing to your poor credit rating. Have you any debts that you are behind with, or unpaid bills? If so, you need to settle anything like this first, or your other efforts will be wasted.

If you have real debt problems then that obviously has to be your first focus of attention. Don't even think about consolidation loans or anything like that, it will only make things worse. By far the best way to deal with debt is to negotiate with your creditors for new repayment terms. Detailed help and advice with this process is available free online.

Debts in themselves are not bad things as far as credit reports go, they only become bad things when you do not keep to the agreement with regard to how and when you will pay the money back. So the main thing is to ensure that you do not have any debts that you are not keeping up with. Using a credit card can actually be beneficial in terms of building up a good credit record again. The trick is to use them responsibly. If you are being rejected for credit card applications you should stop applying, as each application hits your credit record. You may have to take a card that is at a high rate of interest because of your credit rating, but if you pay it off in full each month this will not matter. It is worth doing as just using a card responsibly will help restore your credit rating.

Check your credit score rating free of charge now.

Free Money To Pay Off Debt - The Truth About promises Of Government Money For Debt

2009-10-10T09:05:00.000-07:00

Free money to pay off debt. It almost sounds too good to be true doesn’t it? And in fact it is. Think about it - if the government offered free money to get rid of debt problems, everyone would want it. There would be no incentive to control our finances at all and it would cost the government (and therefore us) immense amounts of money. It is a myth perpetuated by companies trying to make money from your debt problems.

Given that there is no free money to pay off our debts, there are a surprising amount of adverts around which seem to suggest that there are mountains of money there just waiting for us to ask for it. These adverts and websites tend to be ways of getting the attention of people with debt problems in order to sell them whatever it is that they offer - usually bankruptcy services, debt management plans or lists of available grants. There are lots of government grants available, particularly in the US, but you will not qualify for any of these just by being in debt.

Such grants tend to be for things like getting new businesses off the ground and kick-starting new initiatives that the government or state think are beneficial to the economy. The adverts that say you can get free money to pay off debt will probably be worded in an ambiguous way, and when you get into the detail you find that the free money is actually to start a new business which will make you money. If you make money from a new business, you can then pay off your debts, and that is the only connection between debt and these grants.

Free money will always be a tempting idea, but it does not exist. If you have serious debt problems, the bad news is that there are no magical ways of getting rid of them. But the good news is that there is almost no debt problem that cannot be solved without borrowing more money or paying someone to help you.

If you find yourself in debt and start looking around for ways to get out of the situation, the first things you will come across are the commercial solutions being advertised by companies keen to make money by helping you out. These include debt consolidation loans and debt management plans. What no-one is paying to advertise is the solution that no-one stands to gain by except you. The best solution to debt problems is to negotiate new repayment terms with your creditors. While there are debt settlement companies more than happy to take a slice of your money to do this for you, there is no reason why you can’t do it yourself.

This system involves communicating with your creditors and going through a process aimed at proving to them why you can't just pay back what you owe, then making a fair offer of new repayment terms. This will normally include writing off a part of the loan. If you can make a lump sum payment that can help to get you a better deal.

Read recommendations for reputable Debt Management companies in the UK and US.

Successful Credit Card Settlement - Negotiate Credit Card Debt Settlement

2009-10-09T11:58:00.000-07:00

Credit Card debts are so very easy to accumulate, yet can seem impossible to get rid of. The first step towards dealing with this situation is to acknowledge it and face up to the fact that your debt problem will only get worse unless you tackle it. The best way to put credit card debt behind you is to reach a settlement agreement with the card company yourself. You certainly should not consider taking out loans, or bankruptcy or anything else until you have tried to negotiate a settlement.

You do not need to use a company to do this for you. If you do, you will be paying them generously for their trouble, whether they make this clear to you or not. You could generally expect a settlement company to take about 15% of what you owe as their fee. When you already owe more money than you have got, that is potentially a lot of money to spend on something you could do for yourself at no cost.

With a little advice, you can approach your creditors yourself and negotiate a settlement that will allow you to pay back a reduced amount in settlement of the full debt. The credit card company naturally want their money back, but if they know you are not able to pay it all, they will settle for the most they can get. They will not agree to being ripped off, so you will need to prove to them exactly how much money you have and what you are in a position to pay.

To do this you need to prepare a personal financial statement, which will show clearly, your income, expenditure and what you have available each month. Your offer to them must be based on a fair proportion of your disposable income, considering any other debts and commitments you have. If you can prove that what you are offering is reasonable, you are in a much stronger position.

The process of negotiating with creditors is a well tested method and it does work if you follow it. Free guidance is available online for how to write letters, what you should say, etc. The process includes an initial letter to the credit card company to explain your position and that you wish to make arrangements to settle the debt. Once you have all the information you need and have prepared your financial statement, you can work out a fair offer and write to them again with this. It is important in any settlement process to put everything in writing and keep copies of all letters you send and receive.

You should start by asking them to waive any penalty charges, late payment fees and extra interest charges. For an overdue debt this alone can amount to about 30-40% of the debt. If you are in a position to offer a lump sum payment you may be able to agree a better deal than if you need to pay it off over a period of time.

If your credit card debt is fairly modest and you are not yet falling behind with payments, you may wish to consider just using balance transfers to improve your situation. By transferring to a new card with a special 0% offer on balance transfers, you can immediately save on interest charges and buy yourself time in which to pay off as much of the debt as you can. One of the key things with credit card debt is never to settle for just the minimum payment amount, or your debt will just mount up and up. Aim to pay the most you possibly can each month. The best way to do this is to set up a direct debt for the most you can afford, which will help ensure you do not miss any payments.

Read a detailed guide to negotiating debt settlement.

Sample Household Budget Forms - How A Home Budgeting Form Can Help Your Finances

2009-10-07T15:22:00.000-07:00

People experiencing problems with personal debt are not the only ones who could benefit from proper budgeting when it comes to household finances. Finding a long term solution to debt does involve learning to control spending, but budgeting is a process from which anyone can get real benefits. Budgeting is not so much about scrimping and saving and saying no to everything, as about a comprehensive reorganisation of your finances. Done properly, budgeting will help you actually do more with the money you have.

The easiest way to begin budgeting is to use a household budget form. This will allow you to find out exactly where all your money goes, and then use that information to plan how much you really want to spend on everything. It is a two stage process – finding out where you are now, and working out where you are going to go from here.

A good household budget form will list out all your possible sources of income and expenditure, to help ensure that you do not forget about anything or miscalculate. If you use one that automatically calculates totals for you, this will reduce the likelihood of errors. It is very important to complete household budget forms carefully, as a very small slip on a number can have a significant impact on your totals. Imagine the difference an extra 0 would make to your salary figure!

Once you have completed all your income and expenditure, the totals should show you clearly your ‘bottom line’. You will see instantly whether you are spending more than you earn or not. If your spending is within your income, then you have no big problem, but you could still use budgeting to re-balance your spending to where you want it to go. If you spend more than you earn, however, then you need to take action and a budget can help you.

Your next step has to be to start from your actual figures for monthly spending, and put new budget figures in for what you can afford to spend on each of these areas in future. Clearly some areas you will have no choice about, such as mortgages, etc, but others you will have a lot more leeway. You need to work out your new budget so that your total expenditure is less than your income.

The next, and possibly most difficult part, is sticking to the new budget that you have worked out from your household budget form. This involves careful monitoring of everything you spend, and being able to keep track of your spending in each of the different areas. It also involves the same thing for anyone else in your household who will be involved in the process with you. This is where you may find it useful to look at home budgeting software to help make this more manageable.

Whether you use a household budget form or a budgeting software package is of less importance than that you manage to stick to your budget. Use whatever system works best for you.

Read recommendations on home budgeting software now.

How Do I Consolidate My Debts - Advice and Information About Debt Consolidation

2009-10-06T13:16:00.000-07:00

In many ways a better question might be 'should I consolidate my debts', rather than 'how do I consolidate by debts'. Debt consolidation is a relatively straightforward process in itself, made as simple as possible by the loan companies who are eager to offer you a loan. However, before you concern yourself with the process you may wish to take a moment to make sure that debt consolidation is actually the best solution to your problem.

Debt consolidation is about taking out one big loan to pay off all your existing debts, leaving you with one single, easy to manage monthly payment to worry about. The clear advantages are the practical one of making life easier (you no longer have to keep track of all your different debts and creditors) and the apparent saving on monthly payment which are probably lower than your old combined debts.

You just need to look a little deeper though, to be sure you really are going to be better off. There is no arguing about the simplicity offered by consolidation and that this is definitely a benefit in terms of time and effort. But that relatively modest benefit is only worth it if you are also improving your overall financial situation. The thing to look out for is how much you will be paying back in total through your new loan, compared to how much you would have paid back in total through your old debts.

The reason I say ‘in total’ is because your debt consolidation loan is likely to be spread over a much longer period than most of your old debts were. Despite paying slightly less each month under the loan, the fact that you are still going to be making those payments well past the time when your old debts would have been settled means that by the end of the loan you may have actually paid far more than you would have if you hadn’t consolidated your debts.

So the question of how do I consolidate my debts has a pretty straightforward answer - you work out the total of all the debts you want to pay off, and you apply to one of the thousands of lenders who offer consolidation loans. Actually you should get quotes from several, as interest rates will vary a lot. When you know what interest rate lenders are going to charge you for a consolidation loan, you should then look again at your debts and select only those for which you are paying a higher rate of interest than the loan company is offering.

Better than that, though, is to give serious consideration to an alternative way of getting rid of your debt, which does not involve borrowing more money or paying anyone else for their help. The most effective long term solution to debt problems is to re-negotiate repayment terms with your creditors yourself. That may sound easier said than done, but it is a tried and tested solution and you can find free detailed guidance online.

Be careful not to jump straight into debt consolidation just because it is convenient. Work out whether you will actually be any better off in the long run, and don’t be tempted to automatically consolidate all your debts. Check the interest rates on your existing debts and choose carefully which debts you include, and always shop around.

Read reviews and recommendations for reputable debt management companies in the US and UK.

Home Budgeting Software - Advice On Tools To Help with Personal Budgeting Strategies

2009-10-05T14:44:00.000-07:00

There can be little doubt that budgeting is a really useful way to plan and control your expenditure, but the reality of actually putting it into practice is often so daunting that we just never even start. There is a tendency to think of budgeting as a painful kind of rationing, making yourself go short of things you want and not being able to spend any money. In fact this is not the case at all. Good budgeting is just a way of reorganising your finances, so that you can get the most out of the income you do have. If you get it right, proper budgeting means you can actually identify where you are spending money that you don't really want to, and you can then save money and divert it to the things you thought you couldn’t afford.

In the absence of some guidelines on how to prepare a budget, not being quite sure where to start can be enough to prevent people from getting to grips with household budgeting. There are two distinct elements to budgeting. The first is the preparation of an initial financial statement detailing all your income and expenditure, which will give you a clear picture of your current situation. You then use this to identify the areas where your spending is not how you want it to be, and set a budget for your future spending. That can sound bad enough to many people, but the tricky part is then actually sticking to that budget by monitoring what you spend every day.

How to prepare a budget

If you want to prepare a personal budget manually, there are household budget forms online that you can download free of charge. These will help to guide you through the process and ensure that you do not miss out any areas of income or expenditure. While you can then use such forms to set a monthly budget for yourself, it is up to you to work out how you monitor and record your daily spending and measure it against your budget.

How Home Budgeting Software Can Help

The reason home budgeting software tools are so popular is that they make the difficult job of budgeting so much easier. The basic principles are exactly the same as for a manual budget, but a good budgeting tool will guide you through the process of entering your initial information, then make it very easy to identify the areas where savings can be made and where you need to change your spending pattern. The big advantage, though, is in the ongoing monitoring and measuring of your spending, which can be a real challenge to do properly without a budgeting software tool.

When selecting home budgeting software, it is a good idea to go for something that has either a free trial period or a policy where you can get your money back if you don’t like it. That way you have no risk and can make sure it really is the best option for your circumstances. There are lots of home budgeting software packages out there, but you may find that some of them are actually more sophisticated (and expensive) than you require. Some have the facility to deal with lots of different accounts, stocks and shares and all sorts of things, which for many of us are not really what we need the tool for. You don’t want to pay for lots of functions that you are never going to use, so go for a modestly priced, straightforward product. You also want a home budgeting tool that you will be happy to use regularly, so make sure you find one that is user friendly and not over-complicated.

Read recommendations on home budgeting software now.

How To Pay Down Debt - Find Out About One Of The Best Ways To Pay Off Debt

2009-10-04T13:41:00.000-07:00

Serious debt problems are unfortunately on the increase in this time of economic difficulty, leaving many people facing a problem they have never had before. Most of us have thankfully not had to face the problem of a debt crisis in our lives, so the fact that most people are unsure about the best way to get rid of debt is hardly surprising. It is wise to seek advice on how to pay down debt before launching on any course of action, because the best way is not always the most obvious.

Being short of money has a habit of making people want to borrow more money to solve the problem. This would almost certainly be a mistake, as borrowing more money can only add to your overall burden of debt and ensure that you take much longer to become debt free. Another route that people have heard of is bankruptcy, but this would be an extremely serious step with long lasting consequences, so it should not be entered into without very careful thought and an understanding of what is involved.

Go to any independent debt counselling service that has no interest in making money from your plight, and the advice they give you will almost always revolve around negotiating new terms with your creditors. There is no magic way to make debts disappear, but you may be able to come to arrangements with the companies you owe money to about changing the terms of repayment and even wiping out a certain amount of debt.

All the other debt solutions that people will be tripping over themselves to offer you involve taking more money from you. Consolidating your debts in a new loan will cost you more money in interest, and debt management plans, IVAs and bankruptcy all make money for the companies who offer to administer them, because part of what you pay out goes to them.

There is a tried and tested process of negotiation that is well worth attempting before considering any of the costly alternatives. You will of course need some help with the details of the procedure, but this is all freely available online. The process first of all involves communicating with your creditors about your situation and getting them to confirm your outstanding debt. You then put all your debts into a priority order and create a personal financial statement to demonstrate the exact state of your finances. Then begins the process of making offers to creditors, based on what you can show them is both fair and the most you can actually afford.

This is the only way to pay down debt that you can manage for yourself and which does not involve borrowing or spending more money, and therefore making your situation worse. It is the process which is most likely to lead to a situation where you are debt free and can stay that way.

Read a detailed guide on how to negotiate debt.

Collection Agency Procedure To Collect Unpaid Debt - Basic Debt Collection Techniques

2009-10-03T09:16:00.000-07:00

People are often very frightened or intimidated by Debt Collection Agencies, often because they are not sure about the powers these companies have. It is fair to say that some of the less scrupulous debt collection agencies lead people to believe that they have greater powers than they actually do, which does not help the situation.

Debt Collection Agencies are organisations that are used by other companies to collect unpaid debts. Some larger companies actually have their own debt collection departments as part of their businesses, but most will farm such work out to specialist collection agencies. Using collection agents for this kind of work is usually done on a basis of either a fixed fee or a percentage of the outstanding debt. Some of these debt collectors will specialise in actually buying the unpaid debts outright. This means that if you owe money to a company and they sell your debt to a collection agency, you then legally owe that money to the collection agency instead.

When companies sell debts to debt collection agents they only get a small proportion of the amount owed. Whatever the agency can get above what they pay is their profit, and how they make their money. The company selling such debts will then write off the difference between what you owed and what they get from the agency. The fact that the only source of income for some collection agencies is what they can collect on debts leads to them being highly motivated to get that money, which has been known to result in some unfair practices.

Debt collectors cannot enter your home or take away your possessions. Essentially all a debt collector can do is ask you for the money. The problem is that they can do this over and over and over again, and some of the more dodgy ones have been known to sound threatening or intimidating. A good debt collector will actually try to establish a positive relationship with the debtor in order to begin discussing how the debt might be repaid. Such an agreement can even involve agreeing to write off a proportion of the debt.

Debt collection agents should not contact you at inconvenient times such as very early in the morning or late at night. They can call you at work, but must stop if you tell them that your employer does not permit you to take calls while at work. No debt collector is allowed to threaten you with violence or harm in any way, or to use obscene language. Neither are they allowed to make false claims about the amount you owe, lie about their official status or legal rights, threaten to take your property or have you arrested or have your wages garnished (known as attachment of earnings in UK).

In the US the Fair Debt Collection Practices Act regulates how debt collection agencies can operate. Many states also have their own laws relating to debt collection, and in general if the state law is considered to be more restrictive than the FDCPA regulations, then the state law is what counts.

In the UK, debt collection agencies are covered by the Office of Fair Trading, who set out guidelines on how they should operate, and list examples of unfair practices, such as harassment or pretending they have more powers and rights than they do.

Read reviews and recommendations for reputable debt management companies in the UK and US.

Erasing Bad Credit Reports - Find Out The Truth About Promises To Erase Poor Credit History

2009-10-02T14:38:00.000-07:00

I am forever surprised at the volume of sites and adverts on the internet claiming to wipe out bad credit reports. These appeal to the same desire in all of us as those adverts promising to give us the secret of getting rich quickly without having to work at it. Sadly, both such claims are scams and the only people likely to get rich are those taking money from you for something which cannot be done.

The only thing approaching legitimate credit repair are those handful of companies that will advise you on the things that anyone can do themselves to help improve their credit rating. If you have a bad credit rating because you have unpaid debts, or something similar, there is no-one on earth who has the power to remove that history. Steer well clear of anyone who claims to be able to do that.

There are things all of us can do to improve our credit rating, and you do not need to pay anyone else to do these for you. The first step is to check your own credit report for yourself. In the US, everyone is entitled to one free report per year, and in the UK, you can check it by taking a free trial with one of the credit agencies. The reason for doing this is so that you can examine your report for any errors. This can include things which are just plain wrong or things which were true, but should have by now been removed from your report. You need to challenge any such findings by writing to the credit agency concerned.

You must accept the fact that you cannot just erase a bad credit history, but there are things you can do to gradually improve your credit score. As well as the most important starting point of actually checking it for yourself, the other crucial thing to do is also the most obvious; make sure you keep up with any repayments you have on any loans, mortgage, etc. If you default or fall behind, you are never going to get a good credit score. You can start to build your rating back up by using credit cards sensibly. This is actually better than avoiding credit cards completely (and a lot better than using them badly!).

Cut up and cancel any cards you do not use (not using them is not enough, you must cancel them or the credit limit will remain on your credit rating). Use a card and make sure you set up a direct debt to pay off the balance in full every month. Don’t apply for lots of cards or other credit as every application affects your rating, so only apply for things for which are likely to be approved.

Check your credit score rating free of charge now.

Where Can I Get A Loan Quick With Bad Credit - Borrowing Money When Your Credit Is Bad

2009-10-01T12:23:00.000-07:00

The first thing I would advise anyone who wants a loan quickly is to make sure you are aware of the alternatives to borrowing money and think about whether getting a quick loan really is the best solution for your problem. It may be that your circumstances are such that a fast loan is in fact the thing that will best meet your needs, but many people experiencing debt problems turn to quick loans when there are other options that would be more beneficial in the long term.

I would first like to consider the practical difficulties in getting a loan when your credit rating is not so good. You will see lots of lenders marketing loans that say you can get them even if you have bad credit. Many of these, or similar adverts, may also say that loans are available to home owners. Chances are that the loans being offered here are secured loans.

Secured loans, or homeowner loans, are for money which is secured against your house. This is why you can only get them if you have your own house. You will still be eligible for such a loan if you have money left to pay on your mortgage, but not if you are renting. The main thing to remember about secured loans is that if you don’t keep up the repayments, the lender can have your house sold to get their money back. With such serious potential consequences, you should think very carefully before entering into an arrangement for a secured loan.

Anyone with bad credit is not a good bet for a lender, but if they are prepared to secure the loan against their house, they suddenly become a much safer option. This is why it is much easier to get a secured loan than an unsecured one if your credit rating is poor. So that is one option open to you, but I would advise caution before going down this route. You need to be very sure that this really is your only option, and even more certain that you can keep up with repayments.

Another alternative to a loan is of course a credit card, provided that what you want the money for is to purchase something (never use credit cards to get cash). The reason you should consider this option is that usually it is easier to get approval for a credit card application than for a personal loan application. Using credit cards responsibly can also be a good way to gradually build up your credit rating again.

In general, a poor credit rating will result in you paying more to borrow money than someone with good credit. This is because you are a higher risk to the lender (ie more likely to default on payments), so they need to charge you more. Loans designed for people with bad credit will therefore be at very high interest rates. The other thing you should always do if you know your credit rating is bad is to check your credit rating for yourself, to ensure there are no mistakes on it. You can do this free online.

The bigger question of course, is whether getting a loan is really the best option for you at all. If the loan is to help you with debt problems, then you may be better off finding out how to negotiate with your creditors instead. Detailed help with this is available free online. Borrowing to deal with debt can often just make matters worse because it just adds to the amount you owe.

Find reviews and recommendations for the best direct payday lenders in the US and UK here.

Settlement Letters To Creditors - Advice on Writing To Your Creditors To Settle Debts

2009-09-30T11:22:00.000-07:00

When you are in debt, knowing how to deal with your creditors properly can make the difference between being able to find your way out of debt and sinking deeper into it. It really is a vital skill and something that is far too frequently overlooked. Many people with money problems turn to consolidation loans or debt management plans, but these are rarely a better solution than negotiating with your creditors. Unlike the other two, negotiating with creditors costs you nothing.

There is a well established system for dealing with all types of debt problems, no matter how serious. Go to any unbiased debt counsellor who has nothing to gain personally from advising you, and they will in most cases guide you through a process of negotiation with your creditors to reach an agreement for settling your debts on terms you can afford. Any other solution will almost certainly involve borrowing more money (consolidation loans) or spending money on fees for someone else’s help (debt management plans, IVAs, etc).

The tried and tested system for dealing with your debts properly is to communicate honestly with your creditors to explain your situation, put your debts in priority order, work out your exact financial situation and then make offers to your creditors to agree repayment terms. So the first step is to write to all your creditors to tell them why you are in the predicament you are in and why you are not in a position to pay them back on the terms you originally agreed. Being upfront like this is crucial. Whatever your relationship with creditors has been up to this point, now is the time for you to take the lead in being honest and professional in all your dealings with your them.

In your letter, tell each of your creditors that you are seeking help to address your situation and that you will be writing to them again with offers of payment and a personal financial statement. Ask each creditor to confirm exactly how much you owe and get them to list any penalties or arrears that have also been applied. It is sensible to also ask them whether any insurance policy is in place with regard to the debt.

When you get your replies back from creditors, make sure you have an organised system for keeping track of all correspondence. The paperwork could become quite substantial over a period of time, and you need to keep absolutely everything and know where to find it quickly and easily. Check the letters to receive back and see if there are any penalty charges or extra interest listed. If there are, it is worth contacting the creditor to see if they will at least waive these extra charges and stop accruing any further ones while you try to reach a settlement. You may be surprised how often this works, and there is nothing to be lost by trying.

The next stages in negotiating your settlement involves separating your debts into priority creditors and secondary creditors, creating a financial statement, then writing to your creditors again with offers of settlement. It is a process that is proven to work, and all that is required is some guidance on the process.

Read advice on how to negotiate debt.

I Need To Borrow Some Money To Get Out Of Debt - Advice On Borrowing To Pay Off Debts

2009-09-29T12:08:00.000-07:00

It is fair to say that for many people, the automatic reaction to getting into debt is to want to borrow more money to pay if off. This is perfectly logical in many ways - because your problems are to do with having no money, you look at how you can get some more. Unfortunately, this can often lead to a temporary feeling of relief, followed by the gradual realisation that the situation has actually just been made worse.

The reason the long term situation becomes worse is that debt problems are caused by not having enough money to pay back money you have borrowed or goods you have taken on credit, and borrowing more money simply increases your burden of debt. While you may get a temporary injection of cash, you have no less to pay back than you did before (probably more), and your real income is no greater.

Debt consolidation loans are the commercial lenders answer to the widespread desire to borrow money to pay off debt. The principle behind debt consolidation is that you take out one big loan, pay off all your other debts, leaving you with only one monthly repayment to worry about. One of the main selling points of such loans is that your new monthly repayment will be lower than the cost of all your combined debts.

It is important to understand that there is nothing magical happening here - your debts do not diminish or go away. The reason your new payments are less is that they are spread over a much longer period than your other debts. The fact that you are still making payments long after your original debts would have been paid off means that you end up paying back a total amount that is often much more than you would have paid without the loan.

I don't want to say that consolidation loans are always a bad thing, but it is useful to know that in the majority of cases the borrower ends up paying out more money than if they had not taken out the loan. The main time when a debt consolidation loan may actually benefit you is if you already have debts which are at a very high rate of interest. If interest rates have dropped since you acquired your original debts it is possible that taking out a loan at a lower rate of interest could save you money. In order to check whether this is the case, you will need to know the interest rate you are paying on each existing debt, as well as that of the new consolidation loan.

A lender offering you a debt consolidation loan will be keen for you to take out a loan that is large enough to repay all of your outstanding debts. Given what I have said about interest rates, it is important that you only take a loan out for enough to cover the debts that are at a higher rate of interest. An easy way to work this out is to make a list of all your debts and put them in order of their interest rates, with the highest at the top. Draw a line through your list at the interest rate of your consolidation loan, and only borrow enough to pay off the debts that are above that line.

Get advice on different ways to borrow money.

I need a personal loan quick but I have bad credit - How To Get A Loan With Bad Credit

2009-09-28T13:59:00.000-07:00

Many people have problems have poor credit ratings but still need to borrow money. This is an increasingly common occurrence and is a problem which is not insurmountable. However, people who have problems with their credit rating do have more limited options compared to those with a better credit record.

Before going any further, the first thing you should consider is whether you really do need a loan, or whether there is a better alternative. If you want the loan to purchase something, and you could use a credit card to do that, then you would almost certainly be better off applying for a credit card and using that instead of a loan. Getting approved for a credit card will generally be much easier than getting approved for a personal loan.

The other benefit of using credit cards is that for someone with a poor credit record, they can be a good way of beginning to build up a good credit rating again and improve your score. If you know you have a bad credit rating, the first thing you should do is check your credit report to make sure there are no errors on it. It is not unusual for mistakes on credit reports to be the cause of an unnecessarily poor rating.

Having a bad credit rating sends a signal to potential lenders that you are not a good risk. It tells them that there is a greater chance of you not being able to keep up repayments after they lend you money. This will be based on your past credit activity, and is why it is harder to get a loan if your rating is not good. The result of this is that because you are statistically a greater risk to the lender, they are likely to charge you much more in interest. They need to do this because a higher proportion of people they lend money to who have a bad credit rating will default on their loan, so they need to get more back from the rest in order to still make a profit.

There are companies that specialise in lending to people with credit problems. Loans in these circumstances will typically involve either paying a higher rate of interest (in some cases an enormous amount more) or having the loan secured against some asset you own, such as your home. Such loans are know as secured loans, unlike normal personal loans and credit card debts, which are unsecured.

Secured loans are much easier to get, because the lender knows that if you default on your payments, they can have your house sold to repay the debt. Because of that security against your asset, you can often borrow quite large amounts of money relatively easily. However, you should think very carefully indeed before taking out a secured loan, because if your circumstances change and you can't keep up with payments, you could lose your home. When taking out any loan being offered to people with bad credit you should check very carefully that it is not a secured loan, unless that is what you want. If you see adverts for bad credit loans for homeowners, these will be for loans secured against your house.

The other type of loan that can be easier to obtain for people with bad credit are very short term or 'payday' loans. These are normally for small amounts of money, advanced for a few weeks at most, to tide you over until you are next paid. Interest rates for such loans are high, and the penalties can be astronomical if you do not pay them back fully and on time.

The best way to find a lender when you have bad credit is to use a website that allows you to search for lenders that specialise in loans for people with credit problems. If you want a loan because of debt problems, think very carefully before taking out a consolidation loan, as these are rarely the best solution to debt problems. Always shop around as rates vary enormously.

Check your credit score rating now free of charge.

Personal Grants To Pay Off Debts - Can I Get Free Money To Pay Off Debt?

2009-09-28T13:57:00.000-07:00

If you search the internet for government grants to pay off your debts, you may well get the idea that there are many such gifts awaiting you, if you could just find out how to actually get your hands on them. Sadly this is not really the case. While there are many government grants available to people in the US, none of these are for you to directly pay off your debts. The grants are for a range of initiatives, including business start-up ideas. Such grants for new businesses are usually to support ideas which meet particular criteria, such as benefiting the local community or fulfilling some obvious need in the area.

The reason there is so much confusion about this area is that many websites advertise the availability of government grants in such a way as to give the distinct impression that the grants are for paying off your debts. In actual fact such adverts are usually carefully worded, and the real meaning is that you could get a grant to start a business which you would develop to make some money, which in turn would then enable you to pay off your debts. Clearly this is a very different thing to receiving free money to pay off your debts directly.

The truth is that in the US and the UK there are just no such things as government debt relief grants. Grants for debt should not be confused with Debt Relief Orders in the UK, which are not grants, but a form of bankruptcy, with very similar consequences. Advertisements offering government grants for debt relief are bound to be trying to sell you something – probably either bankruptcy services or a directory of grants which will be for everything except debt relief.

Bankruptcy is a way of ending your serious debt problems, but is a huge step to take and not one which should be entered into lightly. Most debt problems can be dealt with by dealing with your creditors directly to negotiate new terms for repayment of your debts. There are few debt problems that cannot be resolved this way, and it is the only way which avoids either borrowing even more money or paying someone for their professional services. Choosing a route that involves further spending or borrowing ultimately only results in you paying out even more money at a time when you can least afford it.

The best way of dealing with your debt will depend on your exact circumstances, but debt management plans are effective for most people with a fairly large amount of unsecured debt. For this to be suitable you need to have an income and a certain amount spare each month to pay towards your debts. These are available in both the UK and US. If your situation is more serious and you have less money spare, you may be better looking at debt settlement, which will actually reduce the amount you owe considerably. The equivalent of debt settlement in the UK is an IVA.

Read recommendations for reputable online debt settlement companies.

How Does Debt Consolidation Work – What Happens When You Consolidate Your Debts

2009-08-07T15:08:00.000-07:00

Debt Consolidation is often the first thing that people consider when they experience debt problems. Consolidating debts as it is understood in the UK is basically the process of taking out one large loan to pay off all your other debts, leaving you with only one payment to think about, which is usually a smaller amount that your combined debts were. Debt consolidation is also frequently used in the US in particular to refer to the use of debt management plans. This article is about consolidation loans and debt management will be dealt with in separate posts.

Bear in mind that when you are in debt and you can’t afford to pay back money that you have borrowed or goods you have bought on credit, it is not necessarily the most sensible thing in the world to be thinking about borrowing even more money. If borrowing or spending more than you have is what got you into debt in the first place, it is frankly unlikely that doing more of the same will get you out of it.

There are circumstances in which a debt consolidation loan may improve your situation, but these are far less common than most people suppose. The danger is that people are attracted by the simplicity of a single payment, and the lower monthly payment. It is important to look beyond that to the total amount you will be paying back, compared to your existing debts. The reason the monthly payment is less is usually because the new loan is spread over a much longer period. When you add up how much you are paying back in total over the longer period, you will often find that the consolidation loan is actually costing you far more than your old debts.

The circumstances in which a debt consolidation loan might be a useful thing to do are if your old debts are at a particularly high rate of interest and the interest rates on the new loan will be much lower. If you do take out a new consolidation loan, don’t be tempted to automatically cover all your debts with it. You should list all your debts in order of the rate of interest you are paying on them, and only use the loan to cover the ones that are at a higher rate than you will be paying for the consolidation loan.

Just as there are certain circumstances when a consolidation loan may be useful there are also circumstances when alarm bells should ring and you should avoid them. The times when you should definitely avoid taking out a debt consolidation loan are if you have taken one out previously and it has not solved your problems, or if you plan to use it to pay off credit card debts so that you can carry on using the cards again. In these circumstances the debt consolidation loan is almost certain to simply add to your problems.

The only truly effective way to deal with debt problems is to negotiate with your creditors to agree repayment terms that you can afford. Help and advice with this is available, but not from companies with an interest in selling you a consolidation loan or other commercial debt solution.

Find out about recommended Debt Consolidation companies here.

Hardship Letter To Creditors – All You Need To Know About letters To Write To Creditors

2009-07-26T12:29:00.000-07:00

Everyone is in debt to a certain extent, but problems arise when the amount of money you owe is more than you can pay back out of your regular income. When debts begin to mount up and get out of control, it is easy to panic and think about borrowing more money or taking on additional credit in order to deal with the immediate problem of creditors demanding their money. This is rarely the best option, and your first action should be to discuss your situation with your creditors.

The long term solution to all debt problems is to negotiate with your creditors to reach agreements for paying back what you owe (or perhaps only a proportion of it) at a rate that you can actually afford. The first step in this process is to write to your creditors to explain your situation and why you are not able to pay them what you owe right now. Millions of people are in debt and there are all sorts of reasons for this. It is nothing to be ashamed of, and it is far better to be open and honest with your creditors about the reasons for your situation. If they feel you are not being straight, they may assume you just don’t want to pay, and may not be inclined to want to reach an agreement with you. Whatever has happened in the past, and whatever tactics they have tried to get money out of you, all your dealings with your creditors now need to be rational, professional and honest.

This initial letter from you should explain your circumstances, detailing why you are now in a situation where you are unable to keep up with payments. Tell them that you seeking help to deal with the situation and that when you have made progress you will be writing to them again with a full financial statement and an offer of payment.

In this first letter you should also ask them to confirm the details of the debt, so that there is no misunderstanding about what you owe them. Ask for details of the amount you owe, any arrears, outstanding penalties or extra interest charges, whether the debt is secured or unsecured and whether there is any insurance policy attached to the debt.

Make sure you include all your creditors and check the replies you get to ensure that you agree with the information they provide about the debts. If there are additional penalties or extra interest for late payment, it is well worth contacting them to see if they will at least waive these charges and stop them building up while you try to negotiate a settlement.

The next stages in the negotiation process involve creating a Personal Financial Statement, prioritising your creditors and negotiating repayment terms. These will be dealt with in detail in separate articles.

Read a detailed step by step guide to getting out of debt on the Debt UK website.

Can A Creditor Sue Me For Unsecured Debt – Advice On Being Sued For Unsecured Debt

2009-07-19T13:43:00.000-07:00

First of all we need to be clear about what is meant by unsecured debt. Most loans and debts will fall into one of two categories, secured or unsecured. A secured loan is secured against some asset you own, usually your home. What it means is that if you default on the loan, you can lose the asset. A mortgage is a loan secured against your house, and if you fail to keep up payments, your home can be sold to repay the debt. If you own your own home, It is generally much easier to get a secured loan, because the lender knows that even if you default on payment they can get their money back by selling your home. Loans can also be secured against other property, such as your car.

Unsecured loans or debts are basically every other type of loan or credit. Normal personal loans, credit card debts, bank overdrafts, catalogue debts, etc are all forms of unsecured debt. You will generally need to have a reasonable credit rating to get this kind of loan in the first place. This is because the lender does not have the valuable asset to fall back on, so they wants to be sure you have a good track record and the means to repay what you have borrowed.

Can A Creditor Sue Me For Unsecured Debt – The Likelihood of Legal Action

If you legitimately owe money to a company then the bottom line is that they are entitled to sue you to get it back. This would normally involve court action that could result in a court order against you ordering you to repay the money. The court would decide what you could afford and how much the repayments would need to be. Whether the company does decide to sue you is another matter, and will depend on many things. Legal advice and court action cost money, so it is unlikely that a company will want to spend a lot to recover a very small debt (though they will probably threaten it in an attempt to get you to pay up).

They will probably try to assess your situation and how likely and capable you are of repaying what you owe. If you have a steady job, own your own home and have lived in the same place for a while, they may well decide you should be able to pay and that it would be worth suing you. Alternatively, they may cut their losses and sell your debt to a collection agency for a small proportion of what you owe. Your debt will then be with the collection agency, who will do all they can to get the money from you, and may in turn take legal action themselves.

Can A Creditor Sue Me For Unsecured Debt – The Process of Being Sued

If you are about to be sued for an unsecured debt it is important to take proper legal advice. The processes of being sued for debt are very similar in the UK and the US. In the UK the creditor will make what is called a Money Only Claim through the county court. You will know this has happened if you receive notification from the court, and this will include a form which you must complete and return.

If the court finds in favour of the creditor, a County Court Judgement will be made against you. This is clearly not a good thing, but may not be as bad as you think. In practice what it means is that you will be ordered by the court to repay what you owe. The court ought to look at your circumstances in detail and come up with a repayment schedule that is based on what you can actually afford. The county court judgement will obviously show up on your credit record.

Can A Creditor Sue Me For Unsecured Debt – After Being Sued

If you are sued and a judgement is made against you, it is then particularly important to stick to the terms of what the court has ordered you to do. It really is vital that you do all you can to keep up with the repayment schedule that has been set, otherwise the possible penalties can go to a whole new level. If your circumstances change or you are not able to keep up with payments, you must tell the court straight away and see if the terms can be renegotiated. Never ignore the issue or just stop paying.

The possible consequences for not complying with the court order include having your assets taken by bailiffs or having money deducted directly from your wages (known as an Attachment of Earnings in the UK or Wage Garnishment in the US). Not complying with such an order could then lead to imprisonment.

Can A Creditor Sue Me For Unsecured Debt – Conclusions

Clearly it is preferable to take steps to deal with your debt before getting to the stage of being sued. The best starting point is always to speak to your creditors and make them aware of exactly why you are unable to keep up with repayments, and try to negotiate new terms for paying back the debt. It will never help to just stop paying and not communicate with them. Most debt problems can be dealt with in this way, and free help is available to guide you through that process.

Read more detailed advice on the author's Debt UK and US website here.

How Do I Get Rid Of Debt – Follow This Guide & Find Out How To Get Rid Of Debt Permanently

2009-06-09T13:10:00.000-07:00

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.

Online Gambling Debts – How To Deal With The Causes and Effects of Online Gambling Debts

2009-06-08T13:43:00.000-07:00

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.

Can a Credit Card Company Sue You? - Discover What Happens If You Are Taken to Court

2009-06-02T12:54:00.000-07:00

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.

Can I File Bankruptcy For Free - What Are the Costs of Filing For Bankruptcy?

2009-05-19T12:28:00.000-07:00

The legal processes involved in filing bankruptcy will vary depending what country you are in, so the following information relates only to filing for bankruptcy in the UK. There are two main fees involved in filing bankruptcy and at least one of these cannot be waived, therefore filing bankruptcy will never be completely free.

Can I File Bankruptcy For Free - Court Fees

The Court Fee is currently £150, but is due to increase any time now. It is possible for the court to waive this fee for people who are on low income or claiming benefits such as Income Support. To apply for exemption from the court fee you need to use form EX160A. If you think you may be entitled to have this fee waived but are not sure, you should get in touch with the staff at the court, who will be able to give you the appropriate advice for your situation.

If you are suffering financial hardship, most of the main utility companies have trust funds which you may be eligible for. Get in touch with your electricity, gas and water suppliers to find out if they have such a scheme.

Can I File Bankruptcy For Free - Official Receiver's Fees

The biggest fee involved in filing for bankruptcy is the Official Receiver's fee, which is £360 from April 2009. This goes towards the costs of administering your bankruptcy and can never be waived. The fee is payable when you take your petition to court. The Official Receiver is the person appointed to dispose of your assets in order to raise money to pay off your creditors, and acts as your Trustee. What a treat, having to pay someone to sell everything you own!

Your trustee will deal with your creditors on your behalf, so after filing bankruptcy you will not normally deal directly with your creditors yourself any longer. The only exceptions to this are in connection with secured loans, student loan debt, overpayments of benefits, court fines and debts to utility suppliers. Any remaining debt will usually be written off at the end of your bankruptcy.

Can I File Bankruptcy For Free - Other Costs

If you swear your affidavit in a County Court you should have no other charges apart from the court fees and Official Receiver's fee. If you swear your affidavit in the High Court of before a solicitor, then there will be another small charge.

If you are filing bankruptcy as a married couple then you both need to pay the fees separately, as you cannot file bankruptcy for two people and only pay one set of fees. Similarly, if you are filing bankruptcy as partners in a business, each partner has to pay the fees separately. The exception to this is if all parties jointly apply to file bankruptcy under the Insolvent Partnerships Order.

All such fees can be paid in cash, or postal order, but not an ordinary personal cheque. The only acceptable cheques are a bank or building society cheque or a solicitor's cheque.

Can I File Bankruptcy For Free - The Bankruptcy Process

If you do need to file bankruptcy, the first thing you need is to get the appropriate forms from your local County Court. These are the Debtor's Petition and the Statement Of Affairs. Your creditors can of course petition for your bankruptcy themselves even if you do not want to file for it. Anyone to whom you owe more than £750 can do this, and would need to issue you with a Statutory Demand first.

If you file for bankruptcy it could result in you losing your home if you own it or have a mortgage on it. This can happen even if you own it jointly with someone else. Your home may even be at risk if you are in rented accommodation as some tenancy agreements do not allow for the property being occupied by an un-discharged bankrupt.

There are therefore costs involved in filing for bankruptcy and it is not possible in the UK to file bankruptcy for free. If you situation is so serious that bankruptcy is your only option, then saving up for these bankruptcy fees is probably well worth the effort.

Debt Consolidation Loan Consequences - Discover the Consequences of Debt Consolidation Loans

2009-05-05T12:15:00.000-07:00

Debt consolidation is a very widely known idea and is therefore one of the first things that come to mind when people experience problems with personal debt. It is so widespread compared to other ways of tackling debt that it is often the only solution that people are even aware of. Anyone searching on the internet will find no shortage of ideas for dealing with debt, the vast majority of them designed to make money for someone else.

Borrowing more money is almost never the way to solve a debt problem. It is borrowing money that gets people into this position in the first place, so borrowing even more is usually the last thing they need. As well as understanding something about what is required to really solve personal debt problems long term, this article is designed to highlight some of the consequences of debt consolidation loans.

Debt Consolidation Loan Consequences: What Are The Attractions of Debt Consolidation?

I realise that one of the attractions to people of debt consolidation loans is just the sheer practicality of having only one main payment to think about instead of lots of smaller ones. This is clearly a benefit if you struggle to keep a track of all your debts and creditors. However, compared to whether the loan will actually solve your debt problem or not, this is a very minor consideration. It is surely better to find a few practical systems for getting yourself more organised than to take on a loan that will make your whole situation worse.

The other main attraction with debt consolidation loans is of course the promise of lower monthly payments. It may seem a bit obvious, but the length of time your repayments last is just as important as how much you pay each month. Reducing your debt repayments from £300 per month to £150 certainly looks attractive, but not if you are going to be making the payments for five years when your previous repayments would end after two years. This move would reduce your monthly repayments, but mean you spend £1,800 more to clear your debts.

I do not want to say that debt consolidation is never a good option, but it is the best option an awful lot less frequently than people think. For this reason, it is something that requires some understanding above and beyond the positive spin of the loan companies before going down that route.

Debt Consolidation Loan Consequences: When Debt Consolidation May Be A Good Option

When you have debts that are at particularly high rates of interest.

When the interest rates have dropped considerably in the period since you took on the debts.

When you have properly considered your financial position and know for sure that you can manage to keep up the repayments.

To properly understand what you can and cannot afford in terms of repayments, you should prepare a Personal Financial Statement. Help and templates are available online to assist you in this process.

Debt Consolidation Loan Consequences When Debt Consolidation Is Best Avoided:

When you have tried debt consolidation loans before and you have not managed to keep up the repayments.

When you need a loan to pay off a previous debt consolidation loan.

When you want to pay off credit cards in order to carry on using them.

When you have not worked out your exact financial position and what you can afford to pay each month.

When you have not worked out the total cost of paying back your existing debts and compared this to the total cost of paying off the debt consolidation loan.

When the loan is to be secured against your home.

Debt Consolidation Loan Consequences: Beware of Secured Loans

Many offers of debt consolidation loans are only available to homeowners and may also be advertised as suitable for people with poor credit ratings. This is because the loan will be secured against your home, so they do not have to be so picky about your credit rating as they will simply sell your home to get their money if you default.

Possible Debt Consolidation Loan Consequences:

Your overall debt will probably be increased, meaning you are in debt for much longer and have to pay back much more than you otherwise would have.

You do not tackle the root causes of your debt or learn how to deal with it long term.

If you do not keep up repayments on the new loan your situation could become even worse than before.

If you take out a loan that is secured against your home, you could lose your home if you do not keep up repayments.

Debt Consolidation Loan Consequences: Conclusions

While the right debt consolidation loan at the right time could be the answer, it is far more likely that they will make things worse, and the possible consequences can be quite serious. If you do wish to go for debt consolidation, always shop around and compare rates, and always compare how much you will pay back under the loan with what you will pay in your current situation.

There is only one real way to tackle your debt problems long term, and that is to understand exactly what your financial situation is and negotiate with your creditors to repay your debts on the basis of what you can actually afford. This must be coupled with tackling any issues around irresponsible spending or borrowing.

For further information on dealing with debt without borrowing more money visit this Debt Assistance website

Being Sued For Debt – Advice on What To Do If You Are Being Sued For Debt

2009-04-06T12:21:00.000-07:00

If you genuinely owe money to a company and you do not pay it back in accordance with the terms you agreed, then the hard fact is that lender is perfectly entitled to sue you in order to get their money back. In borrowing the money, or buying things on credit, you will have signed an agreement that legally binds you to paying the money back under strict terms. If you break this contract they may choose to sue you.

Finding yourself in the increasingly common situation of not being able to keep up with the repayments on a loan or credit card will almost certainly result in the lender taking some sort of action to get their money back, but this does not necessarily mean they will take legal action. What they want is to get their money back, or as much of it as they think possible. They will only decide to sue you if they believe that taking such action is the route most likely to result in them getting the most money back from you.

They will rarely proceed quickly to suing you, the typical system being to hand the debt over to either their internal debt collection people to chase you, or else an external debt collection agency. It is usually only if this fails that legal action will be considered. Even then, a lender will consider various factors when considering whether to sue you or not.

If they think that it will cost them more in legal fees than is worthwhile, or they believe that you really do not have the money to pay them anyway, they may opt to try to negotiate an agreement with you instead. Taking court action will involve legal advice, which carries a cost, so you are less likely to be sued for a fairly small debt.

It is important to understand the type of debt you have if you are in danger of being sued. If you have defaulted on payments for a mortgage or secured loan, you could very easily lose your house. Any form of secondary or unsecured debt, however, can not result in the loss of your home through the initial court action. Neither can you expect to have bailiffs coming to take your possessions away (UK only). The initial result of court action (assuming you do owe money and you admit this) will be that the court makes a judgement against you and sets out a schedule for paying back what you owe.

The legal details involved in being sued for debt will vary depending what country or state you live in, but the overall processes are very similar whether you are in the US or the UK. In the UK, the claim will be dealt with through the County Court system, and in the US through the small claims court or higher court. Wherever you live, your first move if you are being sued for debt should be to seek proper legal advice.

If someone decides to sue you, they must first make a claim through the court. You will then receive paperwork informing you about the details of the claim. You must always respond to such claims within the timeframe given and attend court at the specified time in order to answer the claim. If you do not respond or do not attend court, the claim will automatically be awarded against you. In the UK you need to complete and return a form giving your own details and view of the claim.

You may wish to consider contacting the company you owe money to in order to see whether you can come to an arrangement to pay back what you owe, or as much of it as you can afford. You could also consider whether you wish to make a counter claim against the lender, if you think there is a legitimate reason for off-setting some or all of the money you owe. Reasons for a counter-claim could be because the lender has behaved unfairly towards you or not followed consumer protection laws. Making counter-claims can make it more likely that the lender will drop the case or choose to settle out of court, if they think it could be a long and costly legal process.

If a judgement is made against you in the UK this is known as a County Court Judgement. This will involve the judge looking at your financial situation and setting out a repayment schedule for you to pay back what you owe at a rate you can afford. A County Court Judgement will show up on your credit file, and therefore have an impact on any future applications for credit.

If you do get sued and a judgement is made against you, it is very important to stick to the terms of the judgement. If you do not, then the way is open for far more serious legal consequences, which could include the loss of your home and even imprisonment.

Being sued for debt can be a stressful experience, but if you understand the nature and limitations of the immediate court judgement this can help to make the process slightly less daunting. The main thing to remember if you are being sued for debt, is that if a judgement is made against you, it is extremely important to do everything you need to in order to stick to the terms of the judgement.

It is best if you can avoid court action in the first place, and one way to do this is to seek the help of a debt management company to pay off your debts. You can find recommendations for some of the most reputable debt management companies here.

Can A Collection Agency Sue For Debt – Advice On the Legal Powers of Debt Collection Agencies

2009-03-25T13:12:00.000-07:00

If you owe money to a company and you are behind with your repayments, they may well use a debt collection agency to try to collect the money from you. A collection agency is not the same as a Bailiff (UK only), as debt collection agencies have no rights to enter your home or take your possessions. All a debt collection agency can do is chase you by telephone, write to you and call at your home in an attempt to get payments from you.

This is an important distinction to make for UK residents. What Bailiffs do is to enforce legal orders from the Courts or government departments. By law they can enter your home and take your property to auction off to repay your debt. Unsurprisingly, Americans would have no truck with the idea of someone coming into your home to take your goods – the powers of Bailiffs in the UK is a hangover from medieval times. Debt collection agencies, on the other hand, are private organisations that charge for the service of collecting debts, and the principles of collection are largely the same in both the UK and US.

Can A Collection Agency Sue For Debt:

That Depends Whether They Own The Debt Or Not

If you genuinely owe money, then the person or organisation you owe money to has the right to sue you by taking legal action against you through the Courts. Typically a company will try a debt collection agency first, and then consider legal action if that does not work. Any subsequent legal action will be on the part of the original creditor, but they may still use the collection agency to progress the matter on their behalf.

A debt collection agency can only sue you if your debt is with them, not a third party creditor. Some debt collection companies buy bad debts for a fraction of their value and make their money by trying to recover the full amount of the debt. If the company you originally owed money to sold the debt to such a collection agency, then that agency could indeed sue you to recover that debt, because the debt now legally belongs to them.

Can A Collection Agency Sue For Debt:

Just Because They Can, Does Not Mean They Will

Even if you are chased by a debt collection agency and are threatened with legal action by the agency or the original creditor, it is by no means certain that they will go ahead and sue you. Whether they take legal action will depend on many things, the overall governing factor being whether they think they are going to end up better off by suing you or not.

There are costs involved in legal action and the process can be slow, so if the debt is relatively small, or if they think you really haven’t got the money to pay, they may decide to cut their losses. Bear in mind that only a small proportion of debts end up being settled through the court, and that even if the court finds in their favour, there is still no guarantee they will get the money.

Can A Collection Agency Sue For Debt:

The Legal Process of Being Sued

The exact process of going to court will vary depending which country or state you live in, but essentially you will be required to appear in either a small claims or higher court (US) or a County Court (UK). The first thing you should always do if you are being sued is to take legal advice. The principles in the US and UK are very similar, but I will outline them separately in the interests of clarity.

The Process In The UK

Suing for debts in the UK is done through the County Courts, where the claimant makes a ‘Money Only Claim’. On receipt of this the court will send you a claim form to complete and return. If such a claim is upheld by the judge, a County Court Judgement is made against you, setting out a repayment plan that you have to stick to.

Your finances ought to be taken into consideration, and repayments based on what you can actually afford. Once the County Court Judgement has been made, it is very important to stick to the repayments specified, otherwise there are much more serious legal actions that can then be taken to recover the debt.

The Process In The US

You will receive a court Summons and a Complaint (stating how much they say you owe). It is important that you take notice of these and that you attend court on the specified day. Failure to do so will result in the court judging in favour of the company suing you. Prior to this you are free to contact the company you owe money to and see whether a settlement can be agreed.

If you can’t reach a settlement, then you will need to attend court. If you do not agree with the amount being claimed (or that you owe the money at all), you must attend court to fight your case. When you inform the judge that you are contesting the case there will need to be a ‘trial’ which may well be on another date.

You should also consider whether you wish to enter any defences or counterclaims. A defence should be based on legal reasons why the claimant is not entitled to any or part of the money claimed. Counterclaims might be for something like a violation of consumer protection laws by the creditor. The lodging of a valid defence or counterclaim can increase the likelihood of the claimant dropping or settling the claim if they think the case is going to be lengthy and costly to fight.

Can A Collection Agency Sue For Debt - Conclusions

Anyone who you owe money to can sue you to recover it. This will only be a collection agency if they have bought the debt from the original company that you owed it to. It is obviously preferable to avoid letting things get this far in the first place. No debt is impossible to deal with. It may take time and be painful for a while but you can deal with any debt crisis yourself if you take the proper step by step approach.

For detailed guidance on debt cures see the step by step guide on ways to pay off debt at DebtAssistanceSite.com

Can Bankruptcy Stop Foreclosure and Repossession – Advice On How Bankruptcy Affects Foreclosure

2009-03-18T15:06:00.000-07:00

Bankruptcy law in the US obviously differs in some respects from bankruptcy law in the UK, so I will cover both in order to provide useful information for residents in both countries. The UK legislation is slightly more straightforward, so I will look at this first.

Bankruptcy and Foreclosure - The UK Situation

If you are a UK resident and you file for bankruptcy, a Bankruptcy Trustee is appointed, who immediately takes over responsibility for all your assets. Any of these assets can then be sold off to pay back your creditors, and this includes your house, even if it is mortgaged or owned jointly with someone else. Whether your house gets sold or not will depend on various factors, including the size of your debts and what other assets you have.

The good news is that if you are the subject of repossession proceedings, your filing for bankruptcy will immediately stop the process of repossession. The process of repossession is not allowed to carry on until either the end of your bankruptcy or if the court gives your creditor clearance to continue the process. Filing Bankruptcy does not ssecure your home in the long term, but it does at least provide a breathing space.

In the UK there is an alternative to bankruptcy called an IVA (Individual Voluntary Arrangement) which has slightly less drastic consequences. However, an IVA does not legally stop repossession proceedings like bankruptcy. It may be possible to halt proceedings by getting an Interim Order to prevent further action until the IVA is in place, but this is not automatic.

The US Situation

The first thing to say is that there are different types of bankruptcy in the US. It is particularly relevant to this situation to understand the difference between Chapter 13 bankruptcy and Chapter 7 bankruptcy.

With Chapter 7 bankruptcy the responsibility for paying off your debts is taken on by the court, but in exchange for this, full control of your assets transfers to them, and as with UK bankruptcy, your property can be sold off to repay your creditors.

The alternative to this, however, is Chapter 13 bankruptcy, which is essentially an agreement you make through the court to gradually pay off your debts over an appropriate length of time. This is much more appropriate for the purposes of stopping foreclosure. How much of your debts you manage to pay off, and the size of the repayments you have to make, will depend on many factors. The more obvious of these include how much income you get and how much you owe.

If foreclosure proceedings have started against you, a very important point with regard to Chapter 13 bankruptcy is that the sale of your home will be stopped provided you can file for bankruptcy before the foreclosure sale date. Herein lies a problem, because changes to US bankruptcy law introduced in 2005 can sometimes make it impossible to file bankruptcy in time.

The change in legislation introduces the requirement that you cannot file for bankruptcy until after you have had credit counselling, and the counselling must be for not less than 180 days. The principle of undergoing counselling is not a bad idea, but if the foreclosure process results in a foreclosure sale of your home in less than 180 days, you will simply not have time to file for bankruptcy to stop it.

When foreclosure proceedings have begun, your options are fairly limited. The main choice you have is to either pay off what you owe in full (which seems unlikely) or file for Chapter 13 bankruptcy to halt the process. However, you must be aware that filing bankruptcy does not mean your home is then safe. It should be regarded more as a stay of execution! The problem will not go away and one way or another you will need to pay off your debts.

Declaring any type of bankruptcy should not be seen as any sort of easy option. It has serious and lasting consequences and should always be regarded as a last resort. Having your home about to be taken from you may very well be one of the few times that bankruptcy is a preferable option. So bankruptcy can indeed stop foreclosure, but only if you can do it in time, and only on a temporary basis. It is not a cure for mortgage arrears and is most definitely not a soft option.

For further information on a range of Debt Cures visit www.DebtAssistanceSite.com

Can You Be Sued For Credit Card Debts – Advice About Being Sued For Debt

2009-02-11T13:53:00.000-08:00

The answer to whether you can be sued for credit card debts of not has to be that you can, but the decision to sue or not depends on many things. Bear in mind that what the card company want is to get their money, so they will only sue if they think that is the course of action that is most likely to achieve this end.

Whether they decide to sue you for the credit card debts will depend on things like how much you owe and how far you have fallen behind with your repayments. The fact that any legal advice and action will cost them money means that they are not likely to go down this path unless the gain is going to outweigh the cost.

Other factors that the card company will consider are how long you have been at your current address, whether you have a steady job and how old you are. These are the sort of things that will affect how likely they think you are to disappear to avoid the debt. If you look fairly settled and young enough to work for some time to come, you are a better bet for paying them back in the long term, so they might do a deal.

If you have your credit card in a joint name the company are probably going to try chasing the other cardholder as their first option, because if this works it is a lot easier and cheaper than suing you.

Can You Be Sued For Credit Card Debts:

Yes You Can – But That Is Not Necessarily The End Of The World

Leaving aside the legal action for a moment, most debt problems should be tackled in the same sort of way, by working out your exact financial situation and negotiating an affordable deal with your creditors. This is too big a subject to go into in this article, but is always the best solution as it does not involve borrowing more money or paying a company for a commercial debt solution which primarily benefits them. See this Debt Management Guide for further information.

Credit cards are a form of Secondary Debt, meaning that the immediate consequences of non-payment are less serious than those which could result in losing your home, imprisonment or having your possessions seized. A credit card company that you owe money to are perfectly entitled to take legal action against you, which is likely to result in the court ordering you to pay off the debt at a rate they decide, which ought to be within your means.

Can You Be Sued For Credit Card Debts:

The Legal Process

If you receive a Default Notice from the company you owe money to, then you need to seek legal

advice because they can then take you to court. You may well be advised to apply for a Time Order from the court, which can have the benefit of limiting the interest and penalties on your debt and setting a lower repayment amount.

To get a Time Order you need to send a letter to the company you owe money to and make an offer to pay them an amount you can afford. You case will be made stronger if you can include a Personal Financial Statement to show your exact financial situation. If the company turn down your offer of payment you need to approach the County Court to apply for the Time Order. The court will then decide whether your offer of payment was for an appropriate amount or not.

If the company refuse your offer of payment you can go ahead and make the payments you have offered anyway, then it is up to them to decide whether to take you to court of not. If they decide to take action then you will need to apply for a Time Order at that point, but in this situation the court fee will be paid by the card company, not you.

If no application for a Time Order is made, the credit card company make what is known as a Money Only Claim through the County Court. If their claim goes through, this will result in a County Court Judgement against your name.

If the card company lodge a claim against you, you will be sent a form to complete by the Court. Make sure you seek legal advice if this happens. What the County Court Judgement will do is set in place a plan for the repayment of the debt, and it is very important that you stick to this. The court should take into account your financial situation, so the repayment amounts ought to be affordable.

Can You Be Sued For Credit Card Debts:

When Things Can Get More Serious

Once there is a County Court Judgement against you, your situation changes to one with potentially more serious consequences. The payments set by the court must be maintained, otherwise the court can allow the card company to send bailiffs to take possession of your possessions.

Another possible consequence of court action could be the decision to implement an Attachment of Earnings, which allows the deduction of money direct from your wages. The consequences of not co-operating with such a requirement include imprisonment.

The other possible consequence that you really want to avoid is the setting up of a Charging Order. This secures what you owe against your home, so if you then default on your payments your home could be sold off to get the money you owe.

Can You Be Sued For Credit Card Debts:

Conclusions

As you have seen, you can be sued for credit card debts and other types of credit debt, but if you make an effort to tackle it the situation does not need to be too serious. Even if you are taken to court, the result will almost certainly be a payment plan which should be affordable, and you MUST stick to this. When it does start getting more serious is if you go to court and then do not adhere to what the court orders you to do.

Having court action against you is of course stressful and undesirable, and best avoided. If you have serious credit card debt problems there are definitely ways to tackle it. One of the best starting points is to talk to a debt management company about a payment plan. You can find recommendations for some of the best debt management companies here.

Credit Card Debt Help – The Golden Rules For Using Credit Cards and How To Get Rid of Credit Card Debt

2009-01-28T14:27:00.000-08:00

Credit cards make spending money so easy. The process is one step removed and makes us far less careful about it than if we were handing over our hard earned currency. The combination of this with the fact that they are so easy to obtain for most people can be a recipe for disaster.

The use of credit cards has increased enormously over the last decade or so. Lenders are not always responsible about who they offer cards to - often people who clearly have no chance of paying them back if they use them to their full credit limit. Spending money on credit cards is one reason for many of the personal debt problems that people have today.

If you are one of those people with credit card debt, there are certain ground rules that you need to be aware of if you want to put the debt behind you. First and foremost being that you should not consider borrowing more money to pay off your debt, or taking out more credit cards for spending. Debt is rarely improved by borrowing more money and your situation is much more likely to be made worse than it was before. With credit card debt the best solution is to try to move your debt to another card with the lowest interest rate you can find, preferably 0%.

Balance Transfer Your Way Out Of Debt

You need to look for cards with the best interest rates for ‘balance transfers’. It doesn’t matter what the rate is for purchases, because you aren’t going to be making any. This is a very important rule – when you do a balance transfer, you must forget that card as far as spending goes. You will rarely find a card that has a special deal on both balance transfers and purchases, so chances are you will soon lose anything you gain on the balance transfer deal if you start spending on the same card.

You need to have some idea about how long it is going to take you to pay off the total debt on your credit cards. If you know you can do it in about a year, then you can look at doing one balance transfer with a good 0% deal and that should be all you need. Once you have transferred, you can just concentrate on paying back what you owe, without being charged any more interest. Just make sure you focus on when the 0% deal runs out and that you can pay if all off by then.

If you need longer than that to pay it off, then you can either find the lowest rate you can for the ‘life of the balance’ (you are guaranteed that rate until the debt is all paid off) or if you are organised and disciplined you can keep transferring your balance to the next special offer 0% deal and avoid paying any interest at all. I stress that if you are not organised this will not work and you will end up paying interest and other charges. Be honest and decide whether this is for you or not.

Understanding Credit Cards

The way you deal with credit cards will be improved by facing up to some basic truths about them first. The first thing to remember is that the every single credit card is designed to make money for the card company - they would not exist otherwise. This does not mean that there are not ways to take advantage of the benefits of credit cards without paying the card companies, but you need to understand where the traps are and how to avoid them.

They turn a profit by making it very easy for you to spend money you don’t have, and charging you on what you have borrowed until you pay it back. The big difference between cards and loans is that with a loan your repayments are fixed, so you definitely pay interest, whereas with a credit card you can avoid paying any interest at all if you pay off everything you spend every month.

The card companies have a vested interest in you not clearing your balance each month. They hope that you will not repay everything you owe so that they can charge you interest on the money you have borrowed. Credit card companies are also good at building in additional charges for things like late payments or going over your credit limit, so there are lots of ways of getting more money out of you if you do not understand and follow the rules carefully.

In the UK you will see the term APR used in all credit card advertisements. APR stands for Annual Percentage Rate and is the rate of interest that you would need to pay on any debt using the card over the course of a year. Putting the APR on information about credit cards is a requirement of the Consumer Credit Act 1974, and is intended to allow people to understand the longer term impact of the interest rates, and to enable fair comparisons between different cards. You can imagine how difficult it would be to compare the deals offered by several cards if one used monthly interest rates, one annual, etc.

The Minimum Payments Trap

All credit cards have a minimum payment amount which is the least you must pay each month and this is generally about 2 – 5% of the balance. As this is such a small proportion of the debt, you will take an awful long time to pay it off if all you do is make the minimum payments. Remember, the longer you take to pay back the debt, the more the card company will get from you in interest charges.

What the credit card companies dream of are customers who promptly pay the minimum payment each month. This gives the companies the reliability of someone who pays them regularly, but allows them to charge a great deal of interest because they take forever to pay it back. You should aim to pay off the full balance every month if you can, but even if you can not manage that, you ought to arrange a fixed payment for the most you can afford. Always avoid the trap of just paying the minimum payment.

The Cash Advance Rule

Credit cards have their uses, but getting cash advances is not one of them. You will almost always be charged a lot of money for doing this, so the best approach is to act as if it is not possible, and use other means for getting cash. If you do use a credit card for a cash advance there are likely to be additional problems such as any repayments you then make not going towards paying off any of the very expensive interest on the cash advance until you have cleared all the other debt.

Follow these guidelines and you can use credit cards for cheap borrowing and free credit, without paying for the privilege.

For further Debt Assistance and advice on a range of debt related problems, visit DebtAssistanceSite.com

IVA Advice – The Pros And Cons of Individual Voluntary Arrangements

2009-01-11T12:06:00.000-08:00

This article is intended to explain the basics of what an IVA is and to offer some guidance on when it may be appropriate to consider one. Most references to IVAs on the web are from companies with a vested interest in offering you one, so there is a danger that the advice may be a little one-sided. The information in this article is unbiased and intended to provide the information you need to make an objective judgement about whether an IVA is right for you or not.

What Is An IVA?

An IVA is an Individual Voluntary Arrangement and is a legal agreement between you and the people you owe money to. It is a way of consolidating your debts into one payment, and will usually result in some of your debt being written off at the end of the process.

The usual requirement for being able to set up an IVA are that you have at least £15,000 in unsecured debts (ie debts which are not secured against your home, such as your mortgage) which you are unable to pay. Your debts must be to three or more creditors and you must have a regular income.

To set up an IVA you will need to have the agreement of at least 75% of your creditors (by value of the debts). If 75% or more agree to the IVA, then the remaining creditors have to go along with it. The majority of IVAs will last for a period up to five years, though the period varies depending on the circumstances.

Advantages of IVAs

Your monthly repayments may well be less than they were before

A proportion of your debts may be written off

You should be debt free at the end of the process

As the IVA is a private agreement, there are no public notices about it as there would be for bankruptcy

You will not normally be required to sell your home (as you may be with bankruptcy)

You will have only one monthly payment to think about

Creditors will no longer be allowed to hassle you for money owed

IVA Advice - Conclusions

So one of the key things to remember is that IVAs are not free. There is a cost in setting them up, but this is a lot less than bankruptcy and could be considered well worth it when the result is becoming debt free again.

You can find a list of some of the most reputable and reliable UK IVA providers here.

Secured Loans – Why Lenders Are Only Too Happy To Offer You A Secured Loan

2009-01-01T13:52:00.000-08:00

There are many different types of loans on offer, but the majority of standard or personal loans are classed as unsecured. To obtain an unsecured loan you need to be able to demonstrate your ability to pay it back in full, otherwise the lender will be unwilling to lend you the money. A secured loan on the other hand, has a very particular meaning. A secured loan is generally only available to people who own their own houses. This is because a secured loan is secured against your property. In other words, if you default on the repayments, the lender can have your house sold off to pay back the debt.

The reason secured loans should not be entered into lightly is because when you take out a secured loan you are risking your home. That is surely a sobering thought for anyone.

What Are The Attractions of Secured Loans

The fact that a secured loan is secured against your property makes the lender far more likely to make you a loan in the first place, because they know that if the worst comes to the worst, they can definitely get their money back by selling your house. For this reason, lenders are more likely to offer secured loans even to people with poor credit ratings. In fact lenders often present them as the ideal solution for people with credit problems who can’t borrow money by other means.

The other perceived advantage is that because of the link to your property value, lenders will usually be happy to lend larger amounts.

Secured loans are usually over longer periods than unsecured loans, so the monthly payment amounts look smaller. Well, they are smaller, but when you consider how much longer you are paying them for, you do of course end up paying much more. The longer your loan period, the more interest you pay.

Other Considerations With Secured Loans

Most personal or unsecured loans will have a fixed interest rate for the full term of the loan, so you know exactly what your monthly payments are going to be. Secured Loans are usually different in that they tend to have variable interest rates, like a mortgage. For this reason, you need to be very sure that you can still afford to keep up repayments if there is a rise in interest rates. Remember, you house is at stake, so you need to be very sure about this. Read the lender’s terms very carefully when it comes to interest rates that they will be charging.

If you are thinking of using a secured loan to consolidate your debts, you may be encouraged by the lender to use it to pay off every one of your existing debts. Apart from the fact that I wouldn’t advise consolidating your debts with a secured loan anyway, you should at least make sure you only use it to pay off debts that are at a higher interest rate than the secured loan that you take out. A single repayment may seem convenient, but it is not worth it if you are going to end up paying more interest in the long run.

If you are seriously considering taking out a secured loan, the first thing to do is prepare a Financial Statement. This will help you understand exactly what position you are in now, and show you how much you can afford to spend on monthly loan repayments each month. Online guides are available to take you through this process.

I hope you will understand how serious the possible consequences of taking out a secured loan can be, and that you will treat the soothing sales pitch of lenders with the caution they deserve. Just remember that you can lose your home, so do NOT rush into anything, be VERY SURE that you can afford the repayments, and DON’T DO IT, if you have any other option.

You can find more information about secured loans and a list of recommended secured loan lenders here.

Best Ways To Save Money – Reduce Your Debt With These Money Saving Ideas

2008-12-28T14:54:00.000-08:00

There are lots of things you can do to reduce the amount you spend, and the following suggestions are some of the best ways to save money, because they can have the biggest impact on your spending. The more you can save on what you spend, the more you have available to pay off your debts.

Save Money - Examine Your Mortgage Deal

This is likely to be your single biggest cost, and therefore has the potential for the biggest saving. The large amounts involved mean that even a small difference in interest rates can have a significant impact on what you pay. The fact that you are going to be paying it for so long is another reason to examine it closely and regularly. A relatively modest change per month could save you thousands over the term of your mortgage.

Start by asking your existing lender for a better deal – that would be less hassle than changing to a new lender, so it is well worth a try. Some lenders are less desperate to keep your business than they used to be before the credit crunch, but many would still be happy to improve your deal rather than lose your business.

If you do consider changing to a new lender, you will need to know if there are any penalty charges for leaving your current mortgage early, as this will need to be allowed for when you are calculating what you might save. Ask your lender to confirm the total costs involved in closing the mortgage. You must also consider legal costs and any fees for setting up the new mortgage.

Save Money – Pay Off Debts First Instead of Saving

This feels counter-intuitive when we are always told we need to save more money, but it does not make financial sense to put money in the bank if you have debts that are costing you money in interest. Pay off your debts first.

The rationale behind this is very simple – the interest you pay for borrowing money is ALWAYS more than the interest you will get from having money in the bank (with the odd exception such as special short term offers on some credit cards). This has to be the case – it is the basic operating system for banking. They give you a bit of interest for the money you deposit with them, so that they can lend it out to someone else and charge more money. The difference between the two rates is their profit.

When you are planning to pay off your debts, always tackle the most expensive ones first. Look at the interest you are paying and use this to work out a priority order for paying them off.

Save Money - Review Your Energy Suppliers

You really do have to keep a close eye on your gas and electricity supplier these days. This is a constantly shifting field and you need to compare the rates about every six months or so. Try to leave it until just after there has been a big price change. Once one supplier changes their prices, the others usually follow in a few weeks, then it should be fairly stable for a while and that is the time to change.

The easiest way to compare prices is on one of the comparison websites. They make it very easy to swap now, and you can often get incentives for changing through them, such as cash back or vouchers.

It is usually cheaper to pay by direct debit, but you should always check your actual meter reading every month rather than rely on the company’s estimates. They seem to go for ages without bothering to read meters at the moment, and their estimates can be wildly out, so to avoid being lumbered with an unexpected bill a year down the line, check what you are actually using, give them your meter readings, and pay the correct amount.

Save Money - Credit Cards

This is a huge area and I could write many articles on credit cards alone, but for our purposes here, the main point is that you should not sit back and just make the minimum payment each month. Ideally, you need to try to pay your cards off in full each month. If you can’t do that, you are storing up problems for the future.

Assuming you do have some debts on credit cards and can’t afford to pay it all off in one go, you should at least set up a direct debit to make a fixed payment each month, based on the very most that you can afford. The credit card companies want you to just make the minimum payments, because then you pay them interest for a very long time, which is how they make their money.

The extra cost to you in just making the minimum payments is huge – the less you pay each month, the longer you take to pay them off and the more interest you pay. The other advantage of setting up a direct debit to pay your cards is that you make sure you don’t miss any payments by accident and incur any needless penalty charges.

Save Money - Shopping for food

The fact that you go shopping so regularly means that it is a very substantial cost when you look at it over the course of a year. We all have our favourite brands and reasons for choosing one make over another, but with the advent of supermarket own brands and now economy brands, there is a huge price difference available on what are often very similar (if not identical) products.

Research shows that if you can drop one brand level on all your shopping, you will save about one third on your shopping bill! I think that is a stunning statistic, which will have a massive impact on your pocket. You don’t have to change to the economy version of everything, just experiment with dropping one level. If you normally get luxury, get standard, if you normally get own brand, try economy.

In my experience, the difference between products will vary from quite noticeable to non-existent. Just make sure you are judging objectively, and not making your mind up before you taste it because of your expectation. Blind tasting is preferable if you want to do it properly.

Depending on your current situation, following the above advice could potentially save you a very sizeable amount of money over the course of a year. For people who are getting into some debt, this sort of expenditure management is well worth the effort as it can be enough to put a hold on the level of debt and help you climb back out. Debt has a habit of increasing and spiralling to crisis level if not tackled early.

For more detailed information on debt assistance visit DebtAssistanceSite.com

Debt Consolidation Loans – Advice on When To Use Them and When To Avoid Them

2008-12-06T10:16:00.000-08:00

There are several options available to you when you feel your personal debts spiralling out of control, though debt consolidation loans tend to be one of the first things people consider. When you are deep in debt with a long list of separate creditors to deal with, the idea of having only one payment to think about can seem very attractive. Indeed, the simplification that debt consolidation brings is one of the main benefits of such loans.

It is important to look beyond this basic benefit and consider carefully whether taking on another loan is really going to help you to manage your debts. Generally speaking, the best solutions to debt problems should not involve spending more money or getting deeper into debt.

The reason your monthly payments can be lower with a debt consolidation loan is usually that you are spreading your debt over a longer period of time. When you add up what you are paying over that period, you will often find that it is more than you would have spent with all your separate debts.

There are certain circumstances in which debt consolidation loans can be a good thing, and others when there are better options. You need to consider these carefully before committing yourself.

When Debt Consolidation Loans May Be The Best Option:

When the debts you currently have are at very high interest rates

When interest rates have dropped and you may get better terms now than when you took on your other debts

When you have properly considered your financial situation and know that you can afford to make the new payments

When Debt Consolidation Loans Should Be Avoided:

When you have taken out a debt consolidation loan before and you have not kept up with payments

When you want to use the loan to pay off another debt consolidation loan

When you plan to use the loan to pay off credit cards or store cards so that you can use them again

If you have consolidated your debts before and it has not worked, do not do it again. You need to break the cycle of borrowing more money and deepening your debt. There are other ways of tackling your debt without involving loan companies or anyone else with an interest in selling you something.

Preparing a financial statement will help you to identify what you can actually afford to pay each month. It is vital that you have an accurate picture of your finances, so that you do not agree to anything that is beyond what you can afford.

If you are going to take out a debt consolidation loan, make sure you shop around because interest rates vary enormously.

Find out more about how to negotiate debt here.

Debt Assistance And Advice – A Step by Step Guide to Getting Out of Debt

2008-12-06T10:04:00.000-08:00

When you find yourself in serious debt, it is not unusual to feel like you are the only person in this situation. You may look around and think that no-one else appears to be having your problems, but you are not alone! Over 2 million others are in exactly the same situation, and usually through no fault of their own. People get into debt for all sorts of reasons, including marriage break-ups, job loss or illness.

Once you get into the situation where you owe more than you can afford to pay back, it can seem impossible to find a way out, but there are ways to get your head above water once more and take back control of your life. There are various sources of debt assistance open to you, and the best route to take will depend on your particular circumstances.

Do NOT borrow more money to pay debts off unless you have seriously considered the alternatives available and decided that is the best course of action. With some assistance and advice you can assess your situation for yourself and perhaps put a plan in place that will not involve increasing your costs above what you already owe. Make sure any debt advice you get is unbiased and comes from someone who is not trying to sell you something!

Before you consider bankruptcy, Individual Voluntary Arrangements, Consolidation Loans or Debt Management Plans (all of which will cost you money), you should go through the following process yourself, which will help you get to grips with exactly the position you are in and what you may be able to do about it.

Step One – Contact Your Creditors

You can’t expect sympathy or understanding from the people you owe money to if they don’t know you are having difficulties. Write to all your creditors, explain why you are having problems and get them to confirm the details of exactly what you owe them. Template letters are available online for guidance.

Step Two – Prioritise Your Creditors

This is VERY important. When you receive replies from your creditors, you must place them into one of two categories, Priority Creditors, or Secondary Creditors. The priority you give to them is about the consequences of not paying them. It is nothing to do with how snotty their letters are or how loud they shout, it is about what will happen to you if you don’t pay them first. These will include mortgages, secured loans and anything where not paying could result in the loss of your home, essential services or goods.

Step Three – Create a Financial Statement

In order to work out what you can afford to pay your creditors, you need to create a Financial Statement. This will not only tell you what you have left to pay people, but it will help to show your creditors, why you are not in a position to pay them at the usual rate. It is very important that you do NOT include your Secondary Creditors in this calculation, only your Priority ones. You must list all your income and all your expenditure for each month, which will show you what you have left to make repayments with.

Step Four – Make Offers To Your Creditors

Now that you know how much you have left after making payments to your Priority Creditors, you need to work out what you are going to offer to your Secondary Creditors. The only way to be fair and consistent about this is to divide up your surplus income in proportion to the debts you owe. For example, imagine that your total debt is £10,000 and you owe Creditor A £5,000. This is 50% of your total debt, so Creditor A should be offered 50% of your available income each month. Write to each of your creditors and explain how much you can offer them. Ask them to accept this and waive any penalty charges.

Follow this step by step Debt Assistance Guide and you should be well on the way to understanding the extent to which you are able to manage your debt without looking at alternative, more costly methods.