Tips to Handle a Cash Flow Crisis

Summary:
You never know when a financial shortfall can happen. So it’s better to be prepared. Debt management program helps you tackle the economic crunch.

Debt management solutions

There are no guarantees in this current economic situation. With the recession and unstable stock market, things are getting worse day by day. In such a situation, financial shortfall can happen even to the most economically secure person. One wrong move can saddle you with debt problems. But debt management programs teach how to handle cash flow so as to avoid any shortfall situation. Here are some debt management solutions helpful for managing crunch cash flow situations

Readjust your budget

The first thing you learn with a debt management program is to adjust your budget. Normally you maintain a budget, but that’s not enough, especially when you are on the threshold of financial crisis. Experts of debt management teach you to cut out unrestricted expenses – anything that’s not absolutely necessary to survive. Stop eating out, partying, buying designer clothes and everything that you can do without. Instead, use this money to pay off your credit bills.

Maintain a finance calculator
It’s very important to keep track of your expenditures. For that, debt management solutions experts suggest a finance calculator. Keep details about every expenditure you make specifying the date and amount. It’s just like any financial ledger and will help you know how much you owe.

Build an emergency fund
Counselors of debt management programs strongly recommend building an emergency fund which will take care of unexpected emergencies like an accident or job loss. This is one of the most effective ways to strengthen your financial security. It’s ideal to have a minimum of 3-6 months of living expenses in the emergency fund so if any cash related crisis arises, you can cover it.

Approach creditors
If your debt amount is very high and you are unable to make even the minimum payment at the end of month, then debt management solutions experts recommend approaching your creditors. Explain to them your financial predicament and request to lower your monthly APR. Although there is no guarantee that creditors will agree, most often this trick works as creditors just want to have their investment returned, even if slowly.

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Top Five Myths of Debt Management

Summary:
There are a wide variety of myths associated with what to do and what not to do about improving your debt structure. Debt management solutions agencies clear the myths associated with debt management.

Debt management myths
Rumors related to credit scores and debt management strategies can be confusing. It is a catch-22 situation where you have no idea whether to act based on myths or stick to your debt payoff tactics. Experts of debt management solutions have outlined the top five myths and the ways to tackle them.

Closing old accounts improves credit score
If you are dealing with debt problems, you must have encountered this suggestion from friends and family. So if the same suggestion from various sources makes you contemplate whether to close accounts or not, here is the fact. According to debt management experts, closing old accounts will not improve your credit score; rather it will have the opposite effect. If you cancel your old credit account, your credit history will appear shorter. As a result, your credit score will be lowered. You can opt to close a new account if you are set on reducing your credit levels.

Paying off debt adds 50 points to your credit score
There is no such magical formula to add up your credit score. There are several factors which are taken into account to derive the credit score. If you have a high credit score, even one non-payment or late payment of debt can cause the score to drop significantly. However, the case is not the same for low credit score holders. Debt management experts suggest paying bills on time and taking care not to have a bad credit report will automatically bring positive points for your credit score.

Negative payoff record gets removed from credit report
It’s a common misconception that once you pay off your collection accounts or declare bankruptcy, the charges will be removed from your credit report. Even if you have paid everything off, they remain in the credit report for a period of 7-10 years. The only change you notice is they will be marked as “paid.”

Soft inquiry can harm your credit
This is considered a false debt management myth. Checking your credit report doesn’t affect your credit score in any way. Rather it is your right to know your credit status. Just take care not to make multiple hard inquiries within a short time interval as it might irritate your creditors.

Co-signer is not accountable
As a co-signer of any loan, you have certain legal responsibilities towards the credit amount.  Any good or bad credit interest for this loan will show up on yours as well as the account holders’ credit reports.

Why Debt Settlement is a Bad Option

Introduction
Debt settlement is considered a good alternative to bankruptcy, but is it really that good? Find out the answer from debt management services.

How Debt Settlement Works
Debt settlement companies act as savings account for debtors. They offer to save up a lump sum of your money, and, once it attains maturity, they negotiate with creditors to pay off your unsecured debt. It is one of the debt management services agencies offer to get you out of debt.

Debt Settlement – More Misleading Than Relief
Until now, this debt management option was regarded as a substitute for bankruptcy. A bankruptcy declaration can have a negative effect on your credit report and your future prospects for bank loans, insurance and even jobs. That’s why the debt settlement scheme was devised. But some thing things are too good to be true.

There are several debt management services agencies who charge exorbitant fees in the name of the negotiation and debt settlement process. They also don’t offer you any legal protection against the lawsuits of collection agents. This can make one question the true objective of these agencies. In fact, due to their steep fee structure, these debt settlement companies are being outlawed in many states.

Success Rate of the Debt Settlement Process
You might find this surprising, but debt management experts report that the success rate for debt settlement is very low. Of all the people approaching these self-proclaimed debt settling companies, only 2% manage to settle their debt successfully. Most debtors are forced to leave the settlement process mid way through because they become involved in lawsuits or debt garnishments from creditors. 

Impact on Taxes
Debt management experts also bring attention to another important issue – the consequences of tax on forgiven debt. The government considers this forgiven debt to be income and hence deducts tax from it. So if your debt settlement company gives you the idea that you can make a good profit, then you are being misguided. The profit you will make from forgiven debt will ultimately be taxed according to government income policy. 

Debt settlement is a good option only when handled by an efficient and genuine agency. Check with a licensed attorney who can guide you with good advice.

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Get Debt Relief for Your Small Business

Introduction
Are you contemplating the idea of declaring your small business bankrupt? Well, there are other debt management solutions available to handle your debt situation.

Impact of Recession on Small Businesses
The recent economical recession has had a tough impact on small businesses. As most businesses take unsecured loans, when they aren’t able to pay the accumulating debt and the high interest rates, they opt for bankruptcy. However, bankruptcy can have its own share of repercussions and hence should be the last resort to be debt-free. Just because you are unable to pay off your debt, you can’t lose all the goodwill you have worked so hard to earn with your business. In such a scenario, debt management solutions offer many strategies to handle your small business’s debt issues.

Debt Management Plan
Under a debt management plan, debt experts usually bargain with your creditors to reduce the debt amount in a certain clause so that the payable amount will be lower than the current debt amount. It’s a legal procedure in which your creditors enter into a new agreement with you. Thanks to debt negotiation, you can eliminate up to 60% of your unsecured debt.

Debt Settlement
Debt settlement is a very good debt management plan for small business owners who have more than $10K in unsecured debt. Unsecured debt creditors are apprehensive about collecting their delinquent accounts, so debt analysts take advantage of this through negotiation and settlement.

Relief Network
Debt management analysts often suggest a liability relief network for small business debt settlement. In fact, it’s considered a better choice than settlement companies. This network only enlists effective debt management companies with a successful track record. Hence, small business owners can expect some significant developments in their quest toward being debt-free.

Here are some dos and don’ts for small business owners:

• Debt management planners strongly suggest not opting to borrow to repay your current debt. If you already feel the heat of debt, further borrowing will only add to your unsecured debt.
• Be punctual in your tax payment. Debt management planners prepare charts to help you maintain your tax details. Remember, even one tax non-payment can earn you an asset penalty from the Revenue Department.
• Maintain a separate bank account. In this way, you can save a compensatory amount from your creditors in case of a drastic situation like bankruptcy.

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How to Fix your Debt Problem

• Introduction 
  Is your debt problem strangling you? Well, you don’t have to live with it forever. Debt management programs can offer many strategies to handle various debt related issues.
   
  Reasons for Debt Problems
  Most debt problems occur because of bad management of personal finances. Credit cards offer the most convenient way to borrow money, but this often turns negative for cardholders. Credit cards also offer the easiest option for buying, not to mention the safest because you don’t have to worry about losing your money. But if not used wisely, credit card usage can lead to serious debt problems. Debt management programs offer many strategies to deal with a debt crisis.
   
  Debt Management Programs
  Debt handling agencies offer debt management programs in which they educate debt-stricken consumers. Starting with counseling, negotiation and finally settlement, experts from agencies can cover every stage to make you aware of your debt problems. They can also teach you how to get rid of debt. But the initial wake-up call has to happen on your end. How serious are you about your debt problem? Are you looking for a way to get rid of your debt? If the answer to both of these questions is yes, then approaching debt agencies can be quite useful.
   
  Below are some effective strategies for conquering your debt problem: Stop paying with credit cards all the time. Most people buy things they want, not need, which augments the debt problem. Consider credit cards as extra money, not a necessity.
• Always check the interest rate and other administrative fees before signing up for a credit card. The market is flooded with various credit card companies showcasing attractive offers, but you need to choose the offer  with the lowest interest rate.
• Debt management planners suggest checking whether reward points are available as partial payment of your credit card debt. You may be able to save some money by trading your reward points.
• If you have multiple credit cards, transfer most of your debt to the lowest annual percentage rate (APR) card. As the interest rate is low, you can save a good deal in paying off other debt.
• Make a deal with yourself. Debt management planners suggest either you increase your income from additional sources such as a part-time job, or put a stop to your unnecessary expenses to get rid of your debt problem. Ultimately, the choice is yours. 

Debt Fighting Tricks to Control Debt

Introduction
Worried about how to get rid of debt? With these debt management tricks you can give your debt problems a tough fight. 

Debt can happen in a number of ways. Unexpected medical bills, accidental expenses of a spouse, extended sick leave, mortgage loan, credit card bills – all these are circumstances that can push you towards debt one way or another. Debt is like an avalanche – if not handled in time, it can blow right over you. Debt management agencies are there to help you in your fight against debt.

Stop the blame game.
You might not realize it, but 99.9% of the time we tend to blame others for our debt situation. Be it for reasons like student loans, mortgage payments or credit card issues, nobody can force you to be in debt. These factors could have aided you, but if you are not able to control your expenses and get out of debt, you know whom to blame. Once you accept the responsibility, the next stage is to seek debt management solutions. 

Know your debt.
It might be surprising, but there are people who actually have no idea how much money they owe to creditors. Ironic, isn’t it? Well there are debt management analysts to help. They add up your credit card bills, student loans, car loans, home loans, etc., to prepare a detailed debt payoff structure. 

Make a smart move.
Don’t let irresponsible finance related decisions spoil your chance of becoming debt-free. Just because something is on sale doesn’t mean you have to buy it, especially if you don’t need it in the first place. The idea of “saving money” by buying on discount is illogical. So strictly follow the debt management plan. It will help you streamline your expenses. 

Be consistent in interest payment.
Does it matter if you miss an interest payment one month? Or if you make a late payment? It does, a lot. You might make it up in your next payment, but it will generate a bad credit rating for you anyway. And a bad credit report can have a negative impact on your credibility with creditors. That’s why debt management analysts recommend being consistent in debt payments. 

These are not hidden secrets, but tested debt management tricks which, if followed with dedication, can bring you into debt free territory. 

Understand Your Options through Debt Management

Summary:
Debt is unavoidable in our current economic scenario. But instead of panicking, it is definitely worth exploring the possibilities that could lead you to be debt-free. Debt management is your constant companion in your quest to be debt-free.

Debt Management Solutions
Debt brings with it a lot of psychological and mental stress along with the financial disturbance. Rather than hiding and not answering creditors’ calls, it’s better to approach an effective debt management solutions provider who can assiste you in dealing with your debt. Through counseling, devising a suitable debt management plan, negotiating and settling down debt, these debt solutions providers are there for you at every step.

Objectives of Debt Management Solutions

Reduce your stress. 
Debt management planners’ devise strategies to settle your debt and strengthen your dwindling finances.

Freeze interest rates and thus prevent your debt from accumulating.
Debt analysts try to reduce your interest rates by providing counseling and building a debt management plan. Be it through credit card balance transfers from high interest rates to lower ones, home equity loans, curbing extra expenses or even reprimanding you against using high interest credit cards too often, they adopt all means to reduce your interest rates. And reduction in interest rates will simply stop your debt from growing further.

Arrange one monthly payment scheme.
Very often we lose track of how many debts we need to pay off at the end of the month. Debt management offers the unique solution of debt consolidation where you will no longer miss any monthly payments. You just need to consolidate all your debts and pay them off through a single monthly payment scheme.

Make debt payoff affordable according to your income.
It’s better to make a minimum payment than non-payment or a late payment. Covering all your debt in this way will improve your credit rating. What’s more, based on your good credit rating, you may even be able to buy extra time for your debt repayment from your creditors.

Stop creditors from chasing you.
You don’t have to hide from creditors anymore. Debt management analysts are there to handle calls on your behalf. With a proper management plan and an improved credit rating, debt agencies prepare you to face your creditors with new confidence.

Restrict legal insolvency procedures. 
A Debt management plan covers many aspects of debt settlement. However, the basic objective of an effective debt plan is to stop the debtor from going bankrupt. Although there is no legal binding, creditors also prefer this as it offers them a much better return on their credit than a bankruptcy scheme.

Debt Management – A Step towards Financial Freedom

Introduction
Are you one of the many who are trapped by debt and desperately looking for financial freedom? With some easy-to-follow strategies, debt management can be the key to being debt free forever.

Debt Scenario
The debt situation is very serious in all corners of the world today. Even powerful countries like the US and UK haven’t escaped from the trap of debt. Monthly bills, credit card interest, mortgage loans, educational loans, medical expenses – the list of the various forms of debt is endless. With so many bills to pay off, it’s not unusual to lose track of debt payments. But with an effective debt management solution, you won’t have to worry about anything.

A Debt Management Secret
According to debt management analysts, a little debt is not so bad. In fact, it can turn out to be profitable for you. Sound contradictory? Well, not really. A home equity loan can be a good option for achieving income tax balance. Also you can consistently pay off your creditors if your debt amount is less, and it will build a good credit rating for you. Based on your rating, you can also obtain other loans with lower interest rates.

Debt Management Keys to Breaking the Cycle of Debt

Curb High-Cost Debt
Debt management strategists often suggest paying off your highest interest credit card balance first. But don’t stop your lower interest debt payments, rather continue with the minimum payments. Once the higher interest debts are paid off, you can work on the balances of your other debts.

Maximize the Usage of Debt Consolidation
Debt consolidation is a good option for paying off debt. Debt management experts suggest a number of ways in which to speed up your debt payment proceedings. Some prominent strategies are:Balance transfer from high interest credit card to low interest credit card. However, it is advisable to have a clear understanding about the transfer fees before choosing the option or you could end up paying more than the initial credit card payoff. Home equity loans offer low interest rates, and there is also a tax deduction provision. Hence, it’s a good debt management strategy to opt for a consolidation loan.

Avoid Sacrificing Retirement Savings
Retirement saving is a wise plan for saving for the future. Even though debt payment should be your highest priority, debt management analysts recommend it shouldn’t be at the sacrifice of your retirement savings.

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How a Credit Card Balance Transfer Can Improve Debt Management

Introduction
Did you know that a credit card balance transfer might be a good method for paying off your debt? Keep reading to learn more about what debt management strategists offer as the reasoning behind this and the benefits associated with balance transfers.

Debt Management Planners Support Credit Card Balance Transfers
Debt management planners suggest that a credit card balance transfer can be a safe option for paying off high interest debt because it amounts to essentially borrowing from low interest credit cards. However, transferring a balance is not a simple procedure. There are several aspects to consider or it could end up becoming a costly affair.

Per a new guideline issued on February 22, 2010, all credit card holders are required to maintain higher interest rate balances by making payments above the minimum level. Business analysts might consider it an additional burden on debtors but it will actually facilitate balance transfer pay off and allow card holders to pay less interest. So in a way, it is a win-win situation for credit card holders.

Choose a Good Credit Card for a Balance Transfer 
Debt management counselors advise to check for certain things when choosing a balance transfer credit card, like the introductory rate, validity of the introductory period, post-promotional interest rate and balance transfer fee, if any. Also make sure to enquire about how you can qualify for an introductory interest rate if you opt for a particular credit card.

The Goal is to Save Money
The primary objective of a debt management solution is to save money, and a credit card balance transfer is no exception. The trick is to repay the entire balance of your credit card within the promotional interest rate period. This way you will make the most of the savings from the balance transfer.

Maintain a Healthy Credit Score
A credit card balance transfer might affect your credit score. A high credit balance indicates more debt and creates a negative impression among creditors. That’s why debt management counselors recommend doing anything you can to avoid a bad credit score.

Double-Check your Credit Card Balance Transfer
After you transfer your balance to a new credit card, it is recommended that you double-check to make sure the transfer was successful. If you have opted for a debt management plan (DMP), don’t forget to ask for a billing statement showing the transfer. If there is any mistake in the balance transfer, you can find out about it easily through the billing detail. It also will help you track any missing or delayed payment that could become a problem in your debt repayment later.

Five Hot Debt Management Tips to Get out of Debt

Summary:
The psychological burden of debt can be a source of continuous mental and physical stress. If continued for a long period, this stress can paralyze our lives by making us feel depressed and feeble. But debt management offers various strategies to combat debt and become debt-free forever.

Debt Management Solutions
Debt in this tight financial period is almost unavoidable, but there are ways to fight it off. With effective debt management solutions, you can become debt free and put your life back on track again. Here are five hot debt management tips on how to be debt free forever.

First Debt Management Tip
If you are already in debt, promise yourself not to get into any new debt. No matter how enticing a new credit card offer or car loan is, refrain from filling out any new forms. It’s worth it during this period of time when you are already in debt.

Second Debt Management Tip
Get into the habit of living within your means, starting today. It’s quite easy if you keep tabs on your expenditures. Similar to the way you keep track of your salary and bonus details, try to keep detailed paper work on your bills, credit card statements and loan payment statements, if any. This debt management tip will help you know how much you have to pay and will automatically prompt you to live within your stipulated budget.

Third Debt Management Tip
It’s a good idea to negotiate for better interest rates while paying off your debt. If you pay a lump sum amount for your mortgage, then take advantage of a lower interest rate. Read the contract details clearly to understand the advantages if you pay back your debt earlier than the stipulated time period.

Fourth Debt Management Tip
Transfer your balances to credit cards that offer lower interest rates. Many credit card companies charge only a nominal amount and some even offer the balance transfer for free. However, don’t make this an excuse to add another credit card to your list.

Fifth Debt Management Tip
Remember, debt management solutions analysts can only help you, but it’s you who has to be mentally prepared if you want to be debt-free. You need to follow a detailed debt payment system in which higher priority debt (in terms of higher interest rate) is paid off first and lower interest rate accounts follow. You can then incrementally add to the amount you pay for each of your debts every month. This will help you easily keep tabs on how much you have paid and how much is remaining.

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