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Thursday, July 26, 2012

The 5 Dumbest Things you can do if you have too much debt

If you’re struggling with too much debt you’re not alone. It seems as if the whole nation has a borrowing hangover. For years, credit was easy and many people became overextended. But we now live in an era of austerity and it’s time to get our affairs in order.

 The 5 strategies you may want to avoid:
 The first advice of experts in the field is to be sure you don't make your situation worse by making common mistakes. In particular try to avoid: · Paying only the minimum payment on your debt as this will results in the amount you owe actually growing and your problems will only become worse. ·
 Relying on friends and family as this can damage relationships with the most important people in your life. ·
 Unscrupulous credit counselors that demand cash upfront or high fees for help they promise, but don't deliver. ·
 Using new high-interest loan to pay off lower interest rate loans – while it may be easier to just have one payment but it will actually increase the amount you have to pay back. ·
Declaring bankruptcy – this can have permanent and severe consequences on your financial future, avoid if you can, especially when debt settlement may work for you... Debt Settlement For many people, working with a Debt Settlement company can actually be a great solution. You’ve probably heard a lot of advertising for these services recently, but what exactly do they do. Debt settlement is the process of negotiating with creditors to get them to forgive a big portion of your debt. Why would a credit card company do this? Well, it’s not out of the generosity of their heart. They have made the financial calculations and determined they are better off knowing for certain that they’ll get paid something rather than not knowing at all if they will get paid anything. Settlement companies work with individual consumers to determine a reasonable monthly amount that they can afford to pay against their debt load. The individual makes the affordable payment every month into a special-purpose account, and as these funds accumulate, the settlement company reaches out to creditors to negotiate a full and final actual settlement amount that they will take. Typically, these companies have excellent relationships with creditors and are negotiating on behalf of thousands of people every day. The amount of savings they can obtain for consumers can be significant. While each situation is different, it’s not uncommon for debt settlement companies to negotiate reductions of as much as 50% of the outstanding amount and help get their customer debt free in just a few years. There are a many debt-settlement agencies, so the next question is how to find a legitimate and trustworthy company to work with?
One great way to start is by visiting your local mortgage broker .. They offer a free, no-obligation consultation to evaluate your options. Then, if you chose to proceed, they will develop a plan that meets your specific needs and negotiate it on your behalf with your credit card companies . To learn how much of your debt can be reduced, and how quickly you can be debt free Contact David Cooke, your Calgary Mortgage broker at http://davidcooke.ca