SAVING MONEY

Posted on March 17, 2011 by admin

Smart Budgeting Secrets

So you want to manage your money a little more efficiently? We all work hard for our money, unfortunately most of us don’t work as hard to save it! If you want to do a better job saving your money, you’re going to have to create a budget. Once finished, a good budget will show you where your money is going, as well as help you identify places to save so you can keep some of your money for future use.

The first thing you will want to do is find out where your money is currently going. You will want to look at bills that show up once a month ( power and water etc….) as well as bills that come up several times in a month like groceries, healthcare, medication, eating out etc. If you download the Debt Workbook you can get a form to do your own budget.

Do you get a paper delivered to your door? Do you have premium cable or tv channels? Do you get coffee every day? Something as small as $2- $5 for a coffee can add up to more than $3,600 /year!!

The whole point of doing a budget is to see where your money’s going and to see if there are any areas where you can save money.

One way to see exactly where your money is going is to keep a journal for a month and write down everything you spend your money on. You may be surprised at how much some of your habits are costing you.

If you don’t want to spend a whole month writing down what you spend your money on, you could try to cut a corner by pulling up your bank card or your credit card statement online and look at your spending habits over the past month. This is a great exercise to find an extra couple hundred dollars per month. I hope you take the time to do it!

Do a budget!! It’s a crucial building block to everything you do financially!

Posted in Saving Money | Leave a comment

CREDIT REPAIR

Posted on March 17, 2011 by admin

Topic: Credit Repair

YOUR GOAL
Get above 700.
Once you have a credit score of 700+ you will be eligible for the best interest rates available for most car loans, mortgages, etc…

Important note: Credit Repair takes time!! You should expect the process to take between 2-6 months depending on what you are trying to correct on your credit report.

Who it’s for:

I recommend credit repair to anyone who wants a higher credit score and who has a score under 700.

IMPORTANT: Your credit score determines what interest rate you will receive when applying for a new debt. It is only good for getting into more debt.

THE PROCESS

You CAN do credit repair yourself, but I do not recommend it. Much in the same way I would not recommend your represent yourself in court even though you are allowed to. Credit Repair is a tedious process that needs to be done in an efficient and organized matter with careful attention to timing. It’s best to let a professional handle it.

Not all credit repair companies are created equally. If you absolutely insist on doing it yourself click here.

Credit repair is the process of contesting items you think are inaccurate on your credit report. If you believe something to be inaccurate, you may contest what you believe to be false to the 3 different credit bureaus. You can contest balances,

The bureaus then have 30 days to ask your creditors if the information being reported is correct. If your creditors do not respond with in 30 days, confirming the accuracy of your dispute, the credit bureaus MUST remove the contested information from your credit report.

Everything has been successfully taken off a credit report at some point or another, but that doesn’t mean that you will be able to get everything you want off your credit report.

WHAT SHOULD HAPPEN

1. You join a credit repair company.

2. They will ask you to send a copy of your credit reports to them
OR
They will pull a copy of your credit reports for you.

3. You will discuss what you want them to try and remove, and they may ask for more details on what you believe to be inaccurate. A simple I don’t remember that can often be enough to dispute.

A personal viewpoint:

I personally would try to contest everything that is negatively affecting my credit score. If a company says I was 30 days late, I want them to prove it whether or not it actually was. I may think it was 28 days late, and they can’t prove that I KNOW the payment was late. I do not feel bad for making them prove something I am unsure of. They certainly don’t feel bad charging people enormous interest rates on their debt. If they don’t want to or can’t prove it, it will get removed and my score will go up.

4. You will normally pay a start up fee in order to activate the process, as well as a monthly fee to monitor your account.

5. The company will begin contesting your negative accounts. Within 35 days the 3 credit bureaus will send you an updated copy of your credit report. It is then your responsibility to send the updated report into the company doing your credit repair. They will check to see if anything has been removed, and if necessary continue contesting the items that did not get removed.

6. Repeat step five until all inaccurate items are removed.

PROS AND CONS

Credit Repair Pros

Higher credit score.

You will save THOUSANDS of dollars on anything you finance because you will be receiving a better interest rate.

You will know your report is accurate.

All accounts stay open. You WANT them to stay open.

You are much more attractive to lenders.

Credit Repair Cons

There are a LOT of scam artists in credit repair. It is an unregulated industry. Be very careful who you hire to fix your credit.

It takes time. There is no immediate way to permanently increase your credit score.

Discipline. You need to send them your new reports when you get them.

Posted in Credit Repair, Getting out of Debt, Making Money | Leave a comment

DEBT CONSOLIDATION

Posted on March 17, 2011 by admin

Debt consolidation aka Consumer Credit Counseling

Topic: Debt Consolidation/Consumer Credit Counseling

A debt consolidation company attempts to lower the interest rate on your credit cards. The money you save with these programs is money you would have paid in the future because your cards had a higher interest rate before you entered into the program.

IMPORTANT: Your payments on these kind of programs are going to be almost as much as your current minimums.

Who it’s for:

I recommend debt consolidation for those who are current with their creditors but have high interest rates. (Typically above 13%)

Those who have less than eight thousand in debt should probably look at this option first.

IMPORTANT: If you are struggling with your current minimum payments, I do not recommend debt consolidation, because your payments are going to be close to what you are currently paying, and your program will be unaffordable.

These companies can sometimes help you get rid of late fees and penalties if you are behind 3 months or less, but be careful.

WHY?
If you are having trouble affording your minimum payments now, odds are you will have trouble meeting them again in the future. That means you will more than likely have trouble meeting the obligations of any debt consolidation program you join. If you do this you may be treading water until you eventually fall behind. If this is your situation, you may want to consider debt settlement.

What Happens

The first step no matter what program you end up choosing is to get a list together of all of your credit card debts along with their balances.

You should then call the consolidation company you are interested in and go over your accounts with them. They will then tell you what accounts they can help you with, and what interest rates the can achieve with each of your creditors. They should then calculate a monthly payment that you will send in every month in order to satisfy your debts.

**Your accounts will be closed.

You then begin sending payments to the consolidation company you have joined. They will contact your creditors and let them know you are in their program, and your creditors will adjust your interest rate accordingly. At this point most creditors will then report to the credit bureaus that you are in their program.

These companies often get a monthly fee, and also make money from your creditors for bringing you into the program. Keep in mind they will on average be paid 4-10% of the money your creditors collect from you while you are in the program.

WHY?
These program were started by creditors as another method to collect form you. Your creditors know that they have been charging you ridiculous interest rates, and they would rather make a reasonable interest rate off of you then none at all. They think of it as a second chance to make money off of somebody they have already overextended.

Pros and Cons

Consolidation Pros

Consolidation will help you get out of debt quicker by reducing your interest rates.

You can stay current with your creditors.

No phone calls from creditors.

No bankruptcy on your record.

Consolidation Cons

You will have to close your accounts. This will have a negative affect on your credit score.

You are not in control of when your payment is made to your creditors. Just because you send in your payment on time does not mean it will get posted to your creditor in time. I have A LOT of clients who receive phone calls and late fees from their creditors because their counseling company did not pay on time. Be careful who you choose!

Your will not be saving that much money every month on your payment. Take what you are currently paying on minimums, and you will be paying close to that amount for the entire duration of your program. In most programs your payment does not go down as your minimums go down.

Discipline. You need to consistently send in your payments. If you can not currently afford the amount of debt you have, this is not the program for you. STICK TO THE PLAN!!

Posted in Debt Consolidation, Getting out of Debt | Leave a comment

DEBT SETTLEMENT REGULATION

Posted on March 17, 2011 by admin

The debt settlement industry has recently gone under a radical change. I believe the change is good for consumers. As of October 27, 2010, the entire industry has essentially been regulated by the FTC. I see this as a good thing, as it will help keep some of the more undesirable characters out of the industry.

Prior to October 27, 2010 the settlement industry was not regulated at all which led to a lot of conmen telling people they could settle their debt, charging a huge upfront fee, and then not doing any work at all and keeping the money. Talk about kicking a guy when he’s down!!
That’s not to say everyone who was in this industry was a scam, but consumers became very leery about who they did business with, and rightfully so! So the good news is that there is finally regulation in the debt settlement industry, and a lot of the bad guys have gone away.

The new law from the FTC states that any company or persons who are attempting to negotiate a debt for an individual may not charge ANY fees until they have settled at least one account for the individual.

So the new FTC law basically prevents a settlement company from charging any fees until they settle a debt. That means a settlement company must do the work for the client first! It also means they must work for free for the client until a settlement is made. For most people joining a program the first settlement isn’t made until about the 6th month. How many people do you know who will work for free for 6 months?

So now rather that work for free for 6 months, a lot of settlement companies have joined up with law firms in order to get around the new law. How you ask? These companies charge an attorney retainer. The FTC can’t regulate attorneys fees, so now you will still wind up paying upfront, but it is for the retainer, not for the fees.

No matter what anyone tells you, you do not need to have an attorney to negotiate your debts.

However if you do hire an attorney to negotiate your debt, you need to check your contract for one thing. You need to make sure if your creditors do take you to court that the attorney you are hiring will represent you in court.

That means you should only hire an attorney to negotiate your debts if that attorney is licensed in your state!

Posted in Debt Settlement, Getting out of Debt | Leave a comment

Pros and Cons

Posted on March 17, 2011 by admin

Settlement Pros

The quickest way to get out of debt other than a Chapter 7 bankruptcy. You can expect to be out of debt in 36 months or less.

The cheapest way to get out of debt other than a Chapter 7 bankruptcy. You can expect to save 50-60% off of your current balances with your creditors.

You are in control of your money.

Start living a debt free life again.

No bankruptcy on your record.

Settlements Cons

Accounts are NOT CURRENT during a settlement program. Because of this, your credit score can take a negative hit while in a settlement program.

Phone calls. If you are current when you enroll in a settlement program, you will likely receive phone calls until your accounts transfer over to a third party collections company.(approx 180 days)

Your creditors could possibly go to court and get a judgment. Depending on the state you live in, they could place a lien on your home, or try to garnish wages. This DOES NOT always happen, but it is a possibility. If you live in TX, NC, SC, FL, or PA, you may be less likely to receive a judgment, click here to fins out why.

Discipline. You need to save up the money to settle these accounts, and you will be building up a significant amount of money. It is important that you have the discipline to save this money and not spend it. STICK TO THE PLAN!!

Posted in Getting out of Debt | Leave a comment

DEBT SETTLEMENT

Posted on March 17, 2011 by admin

Debt Settlement. Does it work? Absolutely. Is it for everyone? Absolutely not.

The best way to find out whether or not debt settlement is right for you or not is to take my free debt exam at www.FreeDebtExam.com .

Debt settlement is for those who are either behind on their bills, or foresee themselves going behind on their bills within the next 5 years. If you are making more than your minimum payments, preferably double your minimum payments, than this debt strategy is not for you. If you are paying more than minimums, than I would recommend either Credit Counseling or the snowball method.

If you’re behind on your bills or foresee yourself going behind than you may want to examine a debt settlement program. There are some things you need to understand about a debt settlement program before joining, so listen up!

Do your research!
Before joining any company to handle your finances, you should check their ranking at the Better Business Bureau. Don’t be so concerned with the grade that the BBB gives, but pay close attention to HOW LONG the business has been around.

You also want to check to see if there are any complaints, and whether or not those complaints were resolved. While it’s rare to see a company that’s been around for a long time with no complaints, if the company is responding to the complaints and addressing things with the BBB, it shows they care about their reputation, which normally translates to them caring about their customers.

A debt settlement company helps you negotiate your UNSECURED debts with your creditors. You are not current with your creditors and it is not good for your credit when you are in a program like this.

Who it’s for:

I recommend debt settlement for those who have over $7,500 in unsecured debt who:

See themselves falling behind OR Have missed more than two or three payments in the last year, and are currently behind.

Have not paid their bills in 3+ months( it may NOT be beneficial for you to settle debts with your creditors if you are passed the statute of limitations in your state)

If you live in North Carolina, Texas, Florida, or South Carolina, the laws are more in your favor. Click on your appropriate state to find out why. If you are self employed this may be a better option as well, click here to find out why.

What happens.

In a debt settlement program you are saving money so you can settle with your creditors ONE AT A TIME, with lump sum settlements. YOU SAVE THE MONEY. You are hiring a company to negotiate your debts for them. Typical fees for these programs is between 13 and 18%. Your settlement company will tell you how much money you need to save every month in order to get out in X amount of months. Most programs are for 36 months, however in some states you may be able to stretch out your program to 48 months. Depending which company you join you will save the money in your own bank account, or in an escrow account set up by the settlement company. Your accounts will be placed in order of desired settlement, and when you reach the amount needed to settle the next account, your settlement company will negotiate the deal, and get in touch with you. You then repeat the process over and over again until you have settled out all of your accounts. Settlement can be the quickest and cheapest way to get out of debt aside from bankruptcy

Posted in Debt Settlement, Getting out of Debt | Leave a comment

Free Debt Help

Posted on March 17, 2011 by admin

Welcome to Debt-Professor.com.  I’m not at my desk right now, but please take the time to look around my site and learn about everything related to money!

Whether you’re interested in learning how to save money, get out of debt, or learning how to build wealth, my goal is always the same.  I want to help you cut thru the hype and get the FACTS on whatever topic you’re researching, so please feel free to look around.

If you want to sign-up for my newsletter and get helpful tips on how to better manage your finances, than you can sign up for that here!

1 Comment