Is Incurring Debts Good or Bad?

Having debts is inevitable in one's life. It has its own advantages and disadvantages; if used correctly, it will help you purchase necessary items and you can lock away the price of the item from increasing. But if used incorrectly, it will ruin your reputation and will give a long lasting bad impression from creditors and lenders.

Purchasing a house and lot today for an example will save you from price increase that may happen in the future. As we all know this kind of asset is continuously appreciating in value. So this kind of investment will definitely justify incurring debt just to acquire one even if you have to pay for it for many years.

Incurring debts is not really bad. Although the correct and advised way to buy the things that you need is to save for them. But when purchasing expensive assets like house and lot and cars, it will take you time to save for it and by the time you have saved the money to buy it, the prices of appreciable assets have gone up. Thus a mentioned previously, loaning to buy appreciable assets is one way to protect you from price increase.

Being a responsible debtor will also help establish your good reputation with creditors; you may not know it but each time you make a loan from banks, your credit history is being reported to established agencies. This history of yours will be the basis each time you make a loan in the future.

Having a good credit history has many advantages. If you have been paying your debts on time then this will show how responsible you are. It will help lower interests each time you borrow money and creditors will be happy in lending you the funds needed to purchase your needed items.

On the other hand, if you are an irresponsible debtor, this might lead you to various problems. Again it will ruin your reputation if you regularly miss payments. Soon you will be charged with high interest charges and worse no creditor will have the strength to lend you money because you have not been paying your debts on a timely manner.

So before you apply for a loan, use your judgment wisely. Do you really need to borrow money? Is the investment you are going to make will justify the interests that you will be paying? Will you be able to pay the scheduled payments on time? Is your job stable and so on. Basing your actions on these questions will help you make a wise decision if borrowing money will be good or bad.

Credit card abuse is one common pitfall that bury most people in debts. The temptation to buy things which are not really needed is great if you have a credit card in your wallet. So if you think you cannot control yourself from buying things that are not really needed then avoid applying for one. Keep in mind that prevention is much better than looking for a cure in eliminating your credit card debts.

Are you looking for a way on how to get a credit card easily? Visit this website by following the link at the end and find useful information not only to acquire a credit card but also on how to use them correctly and eliminating debts that are already troubling you - Eliminate Credit Card Debt.

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Greatly Improve Business Debt Collection Efforts With Asset Investigations

One thing that's tougher than collecting business debt from a debtor is collecting business debt from a debtor who has insufficient or no assets left to repay the debt. It makes perfect business sense to figure out whether the debtor, or the defaulter, has enough assets-that-will-repay to make the whole collection exercise worthwhile.

Through assets investigations, commercial collection agencies, with the help of private investigators, can figure the quality and value of the defaulter's assets, as well as dig up the locations and liquidity-capability information on those assets.

In order to protect assets from being tracked and possibly sold to fund repayment of delinquent debt, many defaulters will remove their assets and transfer them to another name, or they may even enter into bankruptcy proceedings. Because of this, asset investigation exercises must be conducted.

These are the common tricks of the trade, but a creditor does not have adequate expertise to figure out these malicious tricks. It may also be that the defaulter has no assets left to repay, in which case the creditor may well be wasting good money on chasing bad money.

Commercial collection agencies use asset investigations to uncover the financial status and any asset stripping actions of a debtor, making the entire exercise essential to success.

What Do Asset Investigations Cover?

A commercial collection agency will hire a private investigator from its network to find:

- Bank accounts, including Certificates of Deposit, Safety Deposit Boxes and Money Market deposits.
- Addresses and employment information.
- Real estate ownership information.
- Ownership of professional and business licenses (to zero in on current occupation).
- Court history (civil and criminal).
- Advanced investigation, if required.

How Are Asset Investigations Carried Out?

Private investigators are hired by commercial collection agencies to keep an eye on court documents in case of filing bankruptcy.

Time is put into uncovering and analyzing consumer, credit, real estate records, and commercial accounts receivable data. While these are all public record, analysis and negotiation based on findings require expertise and experience.

The private investigator takes on the task of tracking address changes, court history, and contacting anyone who may have more information.

A borrower's actions are closely monitored and checked for questionable activity, such as asset stripping.

Because the collection agencies keep up a good rapport with local authorities and lawyers, they know how to work their way through the government systems and use this relationship to get useful information.

Advantages of An Asset Investigation

Aside from getting in all the information detailed above, the process is completed surprisingly quickly. Commercial collection agencies can present all the required assets' information in a couple of days at the most, thereby allowing the creditor to move fast. A fast mover always has more chance of recovering his debt.

If the defaulter has no assets with which to make repayment, it may be in the best interest of the creditor to drop collection attempts temporarily. The creditor will pay the nominal fee for the investigation and end the process. Because the assets that can be used to repay the debt are also uncovered, the creditor has all the information available prior to embarking upon a debt collection effort.

The amount of time and effort that commercial collection agencies help save companies are enormous. Key company personnel can focus on revenue-generation rather than chasing bad debt collection.

CFOs and CEOs of an organization that is saddled with a whole lot of bad debt must naturally be keen to collect these and infuse the much-required cash in the company. They must hire a commercial collection agency to conduct an assets' investigation and then take it from there.

And also, explore more important information and resources on commercial collection agencies, in addition to collection agencies options.

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Can I Still Do an IVA If I Have No Disposable Income?

An individual voluntary arrangement is normally associated with regular monthly payments. However, if you cannot afford to make monthly payments we consider under what circumstances doing an IVA may still be possible.

An individual voluntary arrangement (IVA) is an offer to settle your unsecured debt with an amount you can afford. The settlement you offer is generally less than the full amount of debt that you owe. It is normally paid over 60 monthly installments.

The monthly payment that you make is determined by your disposable income.

You calculate your disposable income by taking your normal monthly income and deducting all of your reasonable living expenses. The amount remaining is your disposable income.

There is no minimum amount of debt that you must repay. However you will need to be able pay a reasonable amount for your creditors to accept your IVA proposal. Generally the minimum disposable income figure you will need to pay is £150 a month.

If you have no disposable income or it is simply too low to pay the amount required to make your IVA work then on the face of it you may think that you will not be able to start an IVA.

Lump sum settlement IVAs

If you have little or no disposable income, an IVA may still be possible if instead of monthly payments you can offer a single lump sum settlement.

The lump sum can come from any number of different sources.

One possibility is that it can be made available from a third party such as a partner, other family member or friend.

In effect they can lend or even give you the lump sum which you then use to settle your IVA. You can then agree to repay them under your own terms and in your own time.

Alternatively, the lump sum might come from the sale of an asset such as a property or simply the release of equity from a remortgage.

Protection from creditor action

One of the advantages of setting up an IVA is that once it is in place, none of your unsecured creditors can take further legal action against you to collect their debt.

For example if you owe money to the Inland Revenue (HMRC), unless this can be paid within a matter of months, it is likely that they could take serious action against you such as applying for your bankruptcy.

In addition, if you are a home owner, any of your unsecured creditors could take action to secure their debt against your property in the form of a charging order.

If you propose a lump sum IVA, the lump sum does not have to be paid straight away. It can be agreed that the lump sum will be paid at a later date for example when your property is sold.

Even though you are making no monthly repayments, an IVA will give you an ideal protective umbrella from your creditors until the time when your lump sum becomes available.

IVA possible without monthly payments

Based on the option of carrying out a lump sum settlement IVA, starting an IVA without the need to make monthly payments becomes possible.

In fact an IVA can be particularly useful if you are planning to sell your house or remortgage to raise a necessary lump sum but need time to do this.

Your IVA can start immediately and then will protect you legally until the lump sum is made available.

What to do next...

If you are struggling with debt, visit www.beatmydebt.com

Our experts are available to speak to you about your debt problem and offer advice and solutions.

Our vibrant debt forum gives free access to experienced industry experts and others who have suffered with debt problems.

Useful guides, calculators and information are also available designed to help you understand how to manage and resolve debt problems.

James Falla is a debt adviser from BeatMyDebt.com in the UK. For more quality and unbiased information on Debt Management Plans, visit our website at http://www.beatmydebt.com

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My DMP Is Not Working Can I Change to an IVA?

If you are currently in a debt management plan but are worried that it is not working for you, we consider the possibility of switching to an IVA.

There are a number of reasons why your debt management plan may not be working.

Very often even if you are making your DMP payments on a regular basis, not all of your creditors will agree to stop adding extra interest and charges to your accounts.

As such, despite your payments being made, some of your account balances just do not seem to go down.

In addition to the difficulties of paying off your debt, some of your creditors may still continue to harass you for money.

If you are a home owner, your DMP will not protect you from your creditors taking court action against you and applying for a charging order against your property to secure their debt.

Why change to an IVA?

If you feel that your DMP is not working for you, because it is an informal agreement, you are actually allowed to stop paying it and change to a different solution.

This means that if you feel it is a better option for you, you can stop paying your DMP at any time and change to an individual voluntary arrangement (IVA) which could offer you a number of benefits.

The key advantage of an IVA over a DMP is that you agree to repay a fixed number of payments (normally over 5 years). Once these have been paid, any debt which is still outstanding is written off for good.

In addition to the fixed repayment term, once your IVA is in place, all of your creditors must stop adding their interest and charges by law. You therefore know that your debt balances will not keep rising.

Another advantage of an IVA particularly if you are a home owner is that your creditors cannot take any further action against you. This means that your home is protected from charging orders.

Implications of swapping to IVA

Despite the advantages offered by an individual voluntary arrangement, before you decide to make the change you need to make sure you understand the implications of doing so.

Some people worry that because an IVA is a formal solution their credit rating will be worse off. If you are already in a DMP, this is actually not the case. Your credit rating is no more affect by an IVA than it is in your DMP.

In fact, you may well be better off because your know your IVA will be completed in a fixed time after which your credit rating can start to repair itself where as in a DMP this will not happen until all of your debts are repaid in full which could take many more years.

However, if you are a home owner, the implication of an IVA is that you will have to agree to release equity from your property to help repay your debt if you can do so.

The amount of equity you will have to release will generally depend on what if any re-mortgage deal you can get. Ultimately if you are unable to get a remortgage, then the equity in your property may be ignored and instead you will have to add twelve extra payments to your IVA.

If you earn bonuses or overtime, how much of these you can keep will also be restricted if you start an IVA. You will be able to keep up to 50% of the extra that you earn. However the other 50% will have to be paid to your creditors.

Changing is simple

Very often you started a debt management plan because it seemed to be the easiest way to get your debts under control quickly.

However once your DMP has been running for a few months, you can then see for yourself how it is working. With your creditors no longer screaming at you, you have more time to think and research your options.

At this stage, many people do decide that in fact a DMP is not for them and want to change to an IVA.

Making the change is then relatively simple. It is just a matter of speaking to a debt expert who can help you. Normally you continue paying your DMP until your IVA has been accepted. You then simply stop making your DMP payments and flip them into your IVA.

You should certainly not have to pay any fee for leaving your DMP or for putting paperwork together to start your IVA. If you are asked to pay such a fee, then choose a different IVA expert and this is certainly not necessary.

Related DMP articles

If you are interested in reading more expert articles about debt management plans, please click on the following link:

http://www.beatmydebt.com/forum/viewforum.php?f=49

What to do next

If you are struggling with debt, visit beatmydebt.com

Our experts are available to speak to you about your debt problem and offer advice and solutions.

Our vibrant debt forum gives free access to experienced industry experts and others who have suffered with debt problems.

Useful guides, calculators and information are also available designed to help you understand how to manage and resolve debt problems.

James Falla is a debt adviser from BeatMyDebt.com in the UK. For more quality and unbiased information on Debt Management Plans, visit our website at http://www.beatmydebt.com

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How to Get Out of Debt Easily and Relatively Quickly

Debt Management Tips

Generally speaking, it is very easy to get into debt with today's modern way of living. Regardless of the fact how much people make, there is always a chance that they will have financial problems at some point in their life and that they will need some good tips on how to get out of debt. These tips have proven to be very useful to many people all around the world, as they helped them get out of debt and start over with their life. Although it sometimes might be hard to believe, there is a solution to any problem and one of the best solutions for financial problems is getting good, professional advice on how to deal with your financial hardship.

Debt management is quickly becoming one of the most important things all over the world and good and reliable debt management tips are sometimes very hard to find. In reality, the best debt management tips boil down to being responsible about spending the money you do not really have. Although credit cards can be useful in many situations, people are advised to think more about how they will make money instead about how they will spend it. As we all know, making money is far more difficult than spending it. On the other hand, if you really need to use a credit card, you should always remember to use it responsibly and to come up with a plan on how you will pay your debt before you get into debt.

The easiest way of knowing when you need debt management tips is by determining how much money you owe and how much money you make on a monthly basis. If the amount of money owed is greater than the amount of money you are capable of earning, it is high time that you got some useful debt management tips. People often think that the financial predicament they are in is very bad and that their money problems will never be solved, but with a good debt management plan almost any financial problem can be dealt with.

People all around the world are having financial problems, and this is why you can rely on debt management companies to help you with your financial problems. When you think about it, financial experts are there not only to give you advice on how to make more money, but also to use their extensive knowledge and experience in order to help you get out of debt quickly and relatively easily.

Nemanja Boskov is an ambitious writer working on Freelancer.
If you would like anything written for you, contact Nemanja Boskov at nemanjaboskov at gmail dot com

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Debt Collectors Must Treat You With Dignity and Respect

Third-party collection agencies are hired by original collectors to recover monies owed by people who have fallen behind on their bills. Perhaps you have been contacted by a debt collection agency, and are not able to pay what they demand. Whether you just overspent, made a mistake on your budget, or you have become a victim of circumstances such as unemployment or disability, it certainly doesn't feel good to be delinquent on your debts. You may feel guilty about not being able to pay, or you may feel that you don't owe the debt due to a mistake on the part of the collector. You may be in the process of disputing a debt when it is sold to a third party or debt buyer.

But no matter what the circumstance, there are some things that debt collection agencies are simply not allowed to do. Below is a brief overview of debt collector laws, and what to do if you are ever in a situation where an agency is using these illegal debt collection tactics.

Harassing Phone Calls

Collection agencies are not allowed to call you prior to 8 a.m. or after 9 p.m., unless you have told them they are allowed to call you outside of those hours. Additionally, if you have informed a collection agency that you are not to receive personal calls at work, they are then not allowed to call you at your workplace. If they continue to ignore these rules, they are breaking the law under the Fair Debt Collection Practices Act (FDCPA). Furthermore, you may inform them, in writing, that they are not to contact you about your debt via phone, period. Of course, this does not make the debt go away, but they will not be allowed to call you about it any longer.

Making Threats

Using obscene language, hollering, telling you, "We know where you live, so you better pay us," and similar threats are not to be tolerated. They are flat-out illegal. Similar threats, such as threatening to repossess your house or car (if they are not a mortgage company or title holder to your car), are bogus and illegal under the FDCPA. They may also try to threaten to garnish your wages or have you arrested. If your state allows a lawsuit to be brought against you for the debt, and they win, they may be able to collect via wage garnishment. Otherwise, they have no power to take your items or wages. Furthermore, owing debt is a civil matter-debt collection agencies have neither the authority nor the credibility to get a warrant issued for your arrest.

These are just a few examples of illegal debt collection practices that are used by unethical collection agencies. If you are ever in a situation where you are being harassed, do not tolerate it. Contact a fair debt attorney to assist you, and file formal, written complaints with your state's Attorney General and the Federal Trade Commission.

Sergei Lemberg, Esq. is the Principal of Lemberg & Associates, a law firm specializing in fair debt collection law, lemon law, and other consumer law.

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Student Loans: When a Debt Collector Comes Calling

If you've been to college - undergraduate, or post-graduate - then it's likely you have a number of student loans in your name. It's also likely you're one of the many people who cannot find a job that will help you adequately repay those loans, or the balance you owe far exceeds the income you can earn from your chosen field.

If you have defaulted on your loans, and debt collectors have started to call, do not panic, but do act quickly on your own behalf. There are things that you can do to protect yourself.

Determine Who Holds Your Default Student Loan

Private loans are handled differently than government loans. If you have private loans, you may or may not be able to consolidate them with your government loans in order to get a lower monthly payment. If, however, you owe only government loans, you may be able to get deferment and lower monthly payments. When contacting your loan holder, be honest about your situation and ask what options are available to you in your present situation.

Consider Chapter 7 or Chapter 13 Bankruptcy

It is extremely difficult to get student loans discharged during a Chapter 7 bankruptcy, but it is not impossible. If you are able to prove that the loan amount to be repaid is an "undue hardship," the student loans can be eliminated completely. However, this is very a very difficult process and should be done with the consultation of a seasoned attorney.

With a Chapter 13 bankruptcy, the payment terms of your student loans will be set by the court, and repayment can take place over the next five years. Then, after that time has passed, collection actions can start against you again. At that point, you may want to try to have them discharged again. Still, this should be done with the help of a legal representative.

Do Not Tolerate Harassment

With student loans, there are several actions that debt collection agencies can take in order to collect on the debt. Lawsuits, wage garnishments, tax refund interceptions, and federal benefit garnishments are all tools in the arsenal of the student loan collector. But these can be challenged in court. Again, make sure you consult an attorney with experience in collections and student loans. Still, though, no collector is allowed to call you repeatedly, make threats, or otherwise harass you to try to make you pay.

If you need help, are being harassed, or need to dispute a loan, it's best to find an attorney who is experienced with student collections and can help you get the debts discharged or make payment arrangements that everyone can handle. Once you have an attorney, debt collectors are no longer allowed to contact you, and everything will be done through your legal representative. When it comes to repaying student loans, do not wait for a lawsuit to come to your door. Be proactive, and save yourself time, money, and further difficulties.

Sergei Lemberg, Esq. is the Principal of Lemberg & Associates, a law firm specializing in fair debt collection law, lemon law, and other consumer law.

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Pros and Cons of Your Consolidation Options

Who would not simply love to receive fewer bills at the end of every month and at the same time save money? Doesn't this sound very familiar to you? But simply carrying out the futile exercise of consolidating all your debts into one with the lowest possible interest rate will not essentially be the key to all your financial worries. To be more specific, you will need to intricately consider every single pro and con of various options open to you, before you reorganize all your current debts and make relevant plans to cut on your monthly spending over a time period.

After selecting the most suitable debt consolidation program, ensure to maintain your total cost at the lowest possible level. Following 3 tips may help to materialize your consolidation plan:

1. Do not be tempted to unnecessarily extend the pay off period for the new loan to its maximum limit. You should instead opt for a plan that will enable you to come out of your liabilities within a three to four year period.

2. You must carefully read every single line of the bottom or rear-side fine print, to avoid any surprises like an application processing or balance transfer fees or other charges.

3. You must strictly ignore offers that outwardly sound simply too good.

A few tips for people who may be in a truly poor financial state.

Should you be experiencing some serious financial problems and are usually overwhelmed by the consistent load of your monthly bills, prior to doing anything else, you should take the advantage educating yourself through online debt consultations. Some good ones are free of cost, respect your privacy, and help you to interact with a live person who will discuss all your options in order top offer you the best advice. He may recommend a reputable non-profit organization for your credit counseling that will be prepared to negotiate on your behalf with any creditors.

Great Options for Credit Card Holders

The easiest method for consolidating your various credit card related debts is by calling each of your current credit card lenders in turn to ask them to simply make you a better offer. Should your customer care representative appear reluctant, ask for a senior officer of the company.

Credit card lenders are well aware of the tough competition prevailing in the market, and it is relatively cheaper to keep you rather than to switch over to a new client as your replacement, particularly if count among their 'low maintenance' clients who pays his bills regularly. When you get them on the line, ask them about your following three concerns:

1. Obtaining a new special rate for any future balances which you will transfer onto their card.
2. Obtaining a lowered interest rate on future purchases on their card.
3. Obtaining a waiver of the annual fee, if any.

The pros include:

1. It only takes a call to a toll-free number.
2. You will not lose anything but may save lots of money.

The cons include:

1. It may fail to work, particularly if your payment record id spotty.
2. You may have to go through the hassle of getting a new credit card.

Our site is dedicated to providing quality content on debt relief, consolidation, and management- absolutely free! We offer many pages of researched articles in the topic of debt relief, consolidation, and elimination. Check out our other articles at http://www.NoDebtExperts.com

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High Street Spending

In the past times when the UK economy has been in trouble, the love affair between the Consumer and High Street spending has come to the rescue. Traditionally the high street has always bailed out the UK economy.

Today's economic problems mean that can't happen. No more easy credit means the UK consumer can not bail out the struggling economy by spending their way out of economic problems. A survey out today (11th Aug 2011) shows more than 60% of shoppers have switched to cheaper brands, while 32% claim that they are worrying about surging prices leaving them with no disposable income according to the British Retail Consortium's study.

BRC Director General, Stephen Robertson 'weakness in the economy and rising utility and food and fuel bills top consumers concerns for the next 6 months' he also warns that even after paying off essentials, households that do have spare cash are choosing to pay off debts rather than spend on the high street'

He also admitted that the difficult economic circumstances are forcing consumers to become more savvy.

Other factors affecting High Street spending are the worrying increases in inflation. Figures just out show the UK rate of inflation is back on an upward trend - reaching 4.4% in July, up from 4.2% in June - the latest figures show.

The real worrying thing is that in most parts of the country, many employers are struggling to keep all of their staff due to the rise in prices. This leads to many redundancies and force more and more people onto JSA and other forms of benefits, resulting in a deflation to many peoples day to day living allowance.

The ONS reported that no single component drove the increase in CPI inflation, with price increases seen in a number of different areas.

More expensive rent, particularly for those in social housing, was one such area that put pressure on Britons. Landlords are finding it increasingly harder to maintain suitable and sustainable living environments for their tenant's due to the rise in costs.

The cost of clothing, footwear, furniture and other goods usually falls in July amid summer discounting, but reductions weren't as big this year, the ONS said.

It added that higher charges for financial services - such as arranging a mortgage - had put an additional burden on consumers. The problem here is that this is a negative spiral which. Consumers spend less, prices drop and we are in a deflationary spiral.

As well as consumers watching what they spend, they are having to manage their finances better. There are so many more options available to consumers that their creditors would have them know.

Being well informed is really the key to making it through this difficult economic time. We all know that it is the creditors who are really feeling the squeeze. inflation in day to day living cost and deflation for most peoples wages making it harder for people to keep up with their repayments. Being pro-active is the key, getting in touch with the right people as soon as possible and creating an action plan is, in my opinion a sensible solution to getting out of debt.

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Three Simple Steps Towards Managing Debt

Your finances may be a cause of concern right now, but it is important to remember that there are no debt problems that are completely unsolvable. Although there is no fast-track solution to resolving your current financial situation, a solid plan of action and a change in personal spending habits should be sufficient enough to put your mind at ease.

Step One - Control Your Spending

Managing your cash effectively, and your debt problems will become easier to control. The most important aspect of regaining financial control is organising a budget. If you can balance the books by reducing unnecessary spending, there will usually be enough money left over to chip away at your debts at the end of each month.

If your annual household income is below the £66,000 threshold, you may be entitled to additional benefits and tax credits. Benefits are available for low-income families, the elderly and individuals who are returning to work.

If you are having trouble paying the mortgage, there are three different Government schemes that can help fill the shortfall. The Mortgage Rescue Scheme, in particular, has proved to be a frequent lifesaver for homeowners.

Look to reclaim money wherever possible. Bank and credit card charges are often made unfairly and you might be able to pull in some unexpected funding for other bills. It is also prudent to reassess your council tax outgoings. Somewhat surprisingly, more than 400,000 UK homes are being overcharged.

Step Two - Cutting Overall Costs

Consider consolidation loans as a means of settling emergency debts and reducing your monthly outgoings. Personal loans are a good alternative for those with strong credit ratings, but those with a less-than-perfect repayment history can consider joining a credit union.

Credit cards can often be transferred to a different provider at a preferential interest rate. In many cases, some lenders will waive interest altogether for a limited time period to secure your business. Don't be afraid to change provider regularly as long as it secures you the lowest repayment levels.

For high credit scorers, a change to a different mortgage provider can reduce outgoings dramatically. A 1% rate drop on a £200,000 mortgage can save a household up to £160 per month.

Step Three - Dealing with Debts

If you can reposition your finances sufficiently, it is important to establish good communication with your lenders. By organising a restructured payment plan, the immediate pressure of debt problems can be relinquished until you are in a stronger financial position.

Consider a Debt Management Plan or an Individual Voluntary Arrangement with a third party company to help get your finances back in shape. Remember to make the right choice between a DMP or an IVA as it can be difficult to reverse an arrangement once a proposal has been accepted.

Jeremy Gold is a freelance author who writes extensively about finance. Find out more about how to get out of debt, and advice on how to manage debt.

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Individual Voluntary Arrangements (IVAs) Information

Individual voluntary arrangements are often a debtor's last alternative before bankruptcy. (A person who has been declared bankrupt cannot hold certain jobs.) While the total fees are lower, the actual costs involved in applying for an IVA can run into several thousands of pounds and make this option appropriate if you have unsecured debts of $15,000 or more.

An IVA is a formal agreement between a person in debt and his or her creditors to pay off all or a percentage of the total money owed, usually over a 3 to 5 year period (30-60 months). Some IVAs are set up so that you can use a lump sum rather than monthly payments, of a mixture of the two, to pay creditors. Because in most cases you will be paying off only part of the total debt, the amount of the monthly payment is less than it would be on all that you owe.

A reduced payment is one of the advantages of a IVA. It takes some of the pressure off you and your money. At the end of the period when the IVA has been in effect, any unpaid debt remaining is written off by your creditors.

Because and IVA is a formal, legally binding agreement, you will need to find a licensed insolvency practitioner (typically an accountant or a solicitor) to draw up the document. (Look under 'insolvency' in your local phone directory, which will have a list for your area). All practitioners charge fees for their services in helping you to create individual voluntary arrangement. Some take their fee out of your monthly payments.

Others charge upfront fees. Regardless of how it is paid, this money will come out of you pocket. This licensed professional will help you pull together the documentation required of the IVA. These will include your bank statements, income using pay slips, assets (your property), liabilities (mortgage statements), other expenses and a statement explaining the reasons for your financial difficulty. The last item is very important. The likelihood of your creditors accepting your proposal will improve if the truthful reason for your financial problems is something the people evaluating the proposal can understand and empathise with.

The amount you will pay under the terms of you IVA will be based on your disposable income, and it should be an amount you can realistically pay each month. Once you and the insolvency practitioner determine this amount, the practitioner will draw up the IVA proposal, which you should read carefully and then sign.

If you have been trying on your own to reach an agreement with your creditors but have reached an impasse, then an IVA is probably your best option if you want to avoid the complications and costs of bankruptcy. Yes, it will cost you money, getting out of debt rarely does. However, you will have to deal with your insolvency practitioner instead of all your creditors.

For more information and detailed debt management advice visit Debt Management or try Financial Loans for general financial help and advice.

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10 Tips To Becoming Debt Clear

Being in debt can be frustrating as well as detrimental to your health. Millions of people around the world are currently trying to find ways to become debt clear.

If you are one of those millions, then these 10 tips to becoming debt clear are for you.

1. Sit down and make a list of all of your debts. Include in the list the account number, how much the current interest rate is, how much you owe, when it's due every month, what your credit limit is and how much the minimum payment it. This will paint for you a very clear picture of your debt.

2. On the highest balances, start to pay more than just the minimum payment every month. This will help bring down the interest that is accruing on the balance and help you pay off the balance owed faster.

3. Talk to your creditors to negotiate a lower interest rate. If they are not willing to lower your interest rate, ask them if they would be willing to allow you to change your monthly payment amount to one that is easier for you to pay off.

4. Create a monthly budge of all of your income, bills and other expenses. This will help you cut out extraneous spending that can be used towards bringing your overall debt down.

5. Do not apply for any new debt until you have brought your current debt under control. If you cannot pay for it with cash, check or debit card, you don't need it.

6. Make sure you pay your payments on time within the due date so that you are not charged late fees.

7. Designate some of your income every month to be put into an emergency fund until it is equal to three to six month's worth of bills. This will help you if you should lose your income, need to fix a vehicle, or get sick.

8. Transfer any high interest rate credit cards to a lower rate and consolidate as many cards as possible. Then pay off the cards and bills with the highest interest rates followed by those that have the lowest balances.

9. Change your lifestyle if you need to in order to get debt clear. Consider a part-time job, relocating, or living without amenities until you are in a better position.

10. Seek professional help if your debt is more than you can handle on your own.

To be debt clear, you need to take action today.
Debt Clear Today
Get your life back again. Get started. Today!

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How Much Debt Can Your Debtometer Handle?

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People sometimes get in too deep with debt because they don't know when to stop taking on more debt. There's no thermometer or gauge that lets you know you're reaching your limit so it's easy to just keep charging and taking out loans until the banks cut you off. However, by the time that happens, it's often too late.

Debt creeps into your life. Minimum payments give you the false sense that you can handle more than you really can. Because you're only repaying a fraction of your debt, it feels like you can actually take on more.

Debt allows you to get used to living a lifestyle that's really outside of your means. For example, with credit cards and loans, you may be able spend $4,500 per month even though you only make $3,500. However, once your credit cards are maxed out and you can't take out another loan, you'll only able to spend your income, nothing more. But because you're used to spending $4,500 per month, you run into trouble when your debt lines are cut and you have to rein in your spending. The truth is that you could never really handle all the debt you were taking on, but the debt was giving you the false impression that you could.

Most experts say that you shouldn't spend more than 10% of your income on "bad debt" like credit card balances. Anything more than that is too much. Divide your income by.40 (a number that would get an average 4% minimum payment) to get an average amount of debt you can take on. For example, if your monthly income is $3,000, you could only afford to take on around $7,500 of debt if you want to keep your minimum payment around $300 per month. If you know you can't afford a higher minimum than that, avoid taking on more debt.

If you know what amount you can afford to pay on your debt, divide that number by.05 for a 5% minimum payment or.03 for a 3% minimum payment to decide how much debt you can handle. For example, if you can only manage a $100 minimum payment, then you can't afford to take on more than $2,000 of debt.

Remember the best way to stay out of debt is to pay your balances in full every single month, no excuses. With that reasoning, you really can't afford to take on more debt than the income you have left over after all your bills are paid every month. If you only have $100 left, you can only afford a $100 credit card purchase. And if you're living paycheck to paycheck, you can't handle any debt at all.

Not many people pay their balance in full every month. The benefit of having a credit card is that it's not required. If you know you're going to pay your balance over time, be smart about the amount of debt you can take on. Avoid making new purchases when you already have a credit card balance. Instead, pay off your current balance before charging more. Avoid creating a dependency on debt because it tempts you to forget your limit and charge to your heart's content.

Steve Dowell is an expert writer on subjects related to debt settlement and debt relief strategies like counseling and consolidation. Read more on his blog debtsettlement.com.

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