Christian debt settlement-does this really exist? I guess that depends on how you define it. There are many companies that promote themselves as "Christian" debt relief organizations, but I have my doubts. Usually, using the word Christian is as close as they get to offering spiritual guidance. But there are places that do offer this guidance.
If you want the best spiritual guidance and the best debt help advice, you are probably going to have to get them in 2 difference places. There really is nothing wrong with that, because no one is an expert at everything. Get your spiritual guidance from an expert in that field and your financial direction from an expert in that sector.
Your spiritual guidance can be found at your church. Many churches offer workshops on things that we have to deal with in our lives, such as; relationships, debt and other things that challenge us. Debtors Anonymous is another great resource. This is a twelve-step program that is spiritual based and helps people that have compulsive spending problems, but they can get you through any debt situation. They can be found online and in the community.
Nonprofit credit counseling is your best resource for getting debt help. They will consolidate your debt without a loan, credit check or home ownership. You will get a quote on a monthly payment and will setup an automatic withdrawal for the payment. Your payment will be around 2% and will include a small fee each month for the service. Your interest rates will be reduced (usually below 10%) and your fees eliminated. All of this will make it possible for you to be out of debt in about five years.
Even if it is not possible to find Christian debt settlement that does not mean that you cannot get both the spiritual and the financial guidance that you need. You just may have to get them at two different places. You can get started with both of these as soon as today. Fore more info click here!
Friday, August 28, 2009
Debt Negotiation Advice - How to Use Debt Negotiation to Become Financially Free
Debt negotiation is an approach that is used every day to help people deal with serious debt problems. The main principle involves negotiating settlement agreements with your creditors to get them to significantly reduce the size of your debt in exchange for a prompt repayment, usually a lump sum. When your debts are way beyond what you can afford to pay back, the only practical way to deal with them is to use this technique, which can reduce the amount you owe by over half, if done successfully.
The main choice you have to make is whether to try to carry out these negotiations yourself, or use a debt settlement company to help you. The route you choose will very much depend on your situation and how you feel in terms of your experience and knowledge of debt negotiation. If you have already tried to approach creditors about reaching a negotiated settlement, you may have discovered how difficult it can be.
Part of the key to success is to understand how credit card companies in particular operate, as this will inform how you play the negotiating game. Knowing when to wait and when to make offers can have a huge impact on the success of your settlement. There are various guides offering debt negotiation advice, which take you through the whole process. Some even include scripts of what to say, templates for letters to write and details of how to time your actions to achieve the best results.
The alternative to doing it yourself is to use the services of a debt settlement company, who will appoint an experienced debt negotiator to deal with your creditors. When you opt for this kind of debt settlement you are immediately freed from dealing with your creditors and being chased for payment. One of the other benefits that comes with the better companies is that they already have established relationships with hundreds of the most common creditors, which makes successful settlement much more likely.
The process that you will follow with a settlement company is that you immediately stop paying money to your creditors and make payments into a holding account instead. This money builds up each month while your debt advisor works away at reaching agreements with your creditors. As settlements are agreed, the money that is saving up is used to settle the debts. As timing is a key factor in reaching the best reductions on your debts, the negotiation periods can vary considerably, depending on the creditors and other circumstances.
The main advantages of using professional companies like this are that you no longer have to worry about being chased by creditors, you only have one monthly payment to find, and the expertise of the negotiators usually guarantees a good settlement. While the debt settlement company will want to be paid for their services, the best ones will only take a fraction of what they manage to save you as their fee, so you are still much better off than you would have been.
Debt settlement or negotiation is the established approach to serious debt in the US, but for UK residents it is not widespread because of the similar alternative which is an IVA, or individual voluntary arrangement. This involves regular monthly payments for a fixed period, after which outstanding debts are written off.
The process I have outlined does assume you are using a good debt negotiation company, and you need to be aware that the same results are not guaranteed if you happen to select one of the less reputable organisations currently operating. You should take care to choose your company carefully as the worst ones could well leave you worse off by asking for up front fees and not achieving good settlements.
You can protect yourself by using recommendations to find a short list of only well established and reputable debt settlement companies who can show that they have already achieved great results for many other people. As a final safeguard you should always apply to two or more companies in order to make a comparison between what they can offer you.
The main choice you have to make is whether to try to carry out these negotiations yourself, or use a debt settlement company to help you. The route you choose will very much depend on your situation and how you feel in terms of your experience and knowledge of debt negotiation. If you have already tried to approach creditors about reaching a negotiated settlement, you may have discovered how difficult it can be.
Part of the key to success is to understand how credit card companies in particular operate, as this will inform how you play the negotiating game. Knowing when to wait and when to make offers can have a huge impact on the success of your settlement. There are various guides offering debt negotiation advice, which take you through the whole process. Some even include scripts of what to say, templates for letters to write and details of how to time your actions to achieve the best results.
The alternative to doing it yourself is to use the services of a debt settlement company, who will appoint an experienced debt negotiator to deal with your creditors. When you opt for this kind of debt settlement you are immediately freed from dealing with your creditors and being chased for payment. One of the other benefits that comes with the better companies is that they already have established relationships with hundreds of the most common creditors, which makes successful settlement much more likely.
The process that you will follow with a settlement company is that you immediately stop paying money to your creditors and make payments into a holding account instead. This money builds up each month while your debt advisor works away at reaching agreements with your creditors. As settlements are agreed, the money that is saving up is used to settle the debts. As timing is a key factor in reaching the best reductions on your debts, the negotiation periods can vary considerably, depending on the creditors and other circumstances.
The main advantages of using professional companies like this are that you no longer have to worry about being chased by creditors, you only have one monthly payment to find, and the expertise of the negotiators usually guarantees a good settlement. While the debt settlement company will want to be paid for their services, the best ones will only take a fraction of what they manage to save you as their fee, so you are still much better off than you would have been.
Debt settlement or negotiation is the established approach to serious debt in the US, but for UK residents it is not widespread because of the similar alternative which is an IVA, or individual voluntary arrangement. This involves regular monthly payments for a fixed period, after which outstanding debts are written off.
The process I have outlined does assume you are using a good debt negotiation company, and you need to be aware that the same results are not guaranteed if you happen to select one of the less reputable organisations currently operating. You should take care to choose your company carefully as the worst ones could well leave you worse off by asking for up front fees and not achieving good settlements.
You can protect yourself by using recommendations to find a short list of only well established and reputable debt settlement companies who can show that they have already achieved great results for many other people. As a final safeguard you should always apply to two or more companies in order to make a comparison between what they can offer you.
Christian Debt Solutions - Getting Spiritual Help and Help For Your Debt
Are you looking for Christian debt solutions? You can get the spiritual help that you need and the financial help that you need, but I don't recommend that you get them both at the same place. There are organization that are experts in giving spiritual guidance and there are places that are good at giving financial help and you should want to have the best of both sectors.
I have seen a lot of websites that advertise Christian debt help, but they do not look any different than any other debt help site. The term is used because that is what people are looking for. Your church or Debtors Anonymous offers the best spiritual guidance for your debt problems.
The best financial assistance can be found through a nonprofit consumer credit counseling company. They will do everything they can to get you set up on a debt management program that will have you debt free within five years. This program is not free, but the cost is very low and because part of the program is a substantial interest rate reduction, you will be paying a lot less in the long run than you would if you were repaying your debt on your own.
One of the biggest advantages is only having to make one payment each month. Your unsecured debts are consolidated in this program, but it is done without a loan. Another advantage is what it will do for your credit score. Your score will not suffer by using this program and it will probably increase as you make your payments on time and your debt decreases.
There are places you can get spiritual help, but it probably will not be with a financial organization. Getting started with a credit counseling agency can go a long way in reducing the stress that comes along with debt. You can get a free, no obligation quote today for becoming debt free.
I have seen a lot of websites that advertise Christian debt help, but they do not look any different than any other debt help site. The term is used because that is what people are looking for. Your church or Debtors Anonymous offers the best spiritual guidance for your debt problems.
The best financial assistance can be found through a nonprofit consumer credit counseling company. They will do everything they can to get you set up on a debt management program that will have you debt free within five years. This program is not free, but the cost is very low and because part of the program is a substantial interest rate reduction, you will be paying a lot less in the long run than you would if you were repaying your debt on your own.
One of the biggest advantages is only having to make one payment each month. Your unsecured debts are consolidated in this program, but it is done without a loan. Another advantage is what it will do for your credit score. Your score will not suffer by using this program and it will probably increase as you make your payments on time and your debt decreases.
There are places you can get spiritual help, but it probably will not be with a financial organization. Getting started with a credit counseling agency can go a long way in reducing the stress that comes along with debt. You can get a free, no obligation quote today for becoming debt free.
Government Debt Help - Find Help For Credit Card Debt
There is a lot of hype in the media right now about government debt help, but are they the help for credit card debt that you need? Most of the ads say that the government gives people free money to pay off their debt. But if some gives you money they are going to want something in return. There are a lot of unscrupulous companies passing themselves off as government grant agencies that give away money. You should beware of these companies. They usually get a hold of your credit card number and charge it once a month for something useless.
At the end of the day, if you charged it you are going to have to pay for it and you would be better off spending your time looking for debt help that is really going to help you get out of debt. A nonprofit credit counseling agency is a good place to start looking for help. The counselors are trained and certified and they can advise you on what best to do for your debt. If there is a legitimate debt help program that can help you, they will know about it.
A standard debt management program consolidates your unsecured debts without the use of a loan. You will have interest rates of 10% or less and can be out of debt in about five years without ruining your credit. You can get in contact with a credit counseling company by filling out a simple online form.
Many people look for miracle cures when it comes to getting out of debt, but in most cases there is no miracle. The sooner you look for a legitimate debt relief option, the sooner you will be on your way to debt freedom.
At the end of the day, if you charged it you are going to have to pay for it and you would be better off spending your time looking for debt help that is really going to help you get out of debt. A nonprofit credit counseling agency is a good place to start looking for help. The counselors are trained and certified and they can advise you on what best to do for your debt. If there is a legitimate debt help program that can help you, they will know about it.
A standard debt management program consolidates your unsecured debts without the use of a loan. You will have interest rates of 10% or less and can be out of debt in about five years without ruining your credit. You can get in contact with a credit counseling company by filling out a simple online form.
Many people look for miracle cures when it comes to getting out of debt, but in most cases there is no miracle. The sooner you look for a legitimate debt relief option, the sooner you will be on your way to debt freedom.
Getting the Debt Collector Off Your Case
Some time ago I received a letter from a debt collector who said I owed a huge debt to their client. This really blew my mind because I don't have a debt with their client except my usual monthly bill. Nevertheless, they persisted in sending harassing letters.
I have found out that as a U.S. citizen, I have the right to tell them to take a hike and leave me alone. Below is the letter I sent that stops the harassment once and for all and gets the debt collector out of the picture so that you can deal with the one who you originally have a problem with.
To:
The Debt Collectors Name, Inc.
P.O. Box 00000
Somewhere, Ga 00000
From:
Herman Munster
66 Mocking Bird Lane
Out There, NY 00000
Ref:
Account #BR549
Debt Collectors,
When exactly did I enter into a contract that allowed your company to meddle in my personal affairs? I don't remember signing such a document, much less even agreeing to such an action. Please produce this document if it exists and send me a copy of it.
Nevertheless, I dispute this alleged debt even exists and cannot remember ever making such a debt of the outlandish amount claimed by you or the one you claim to represent. Therefore, please stay out of my personal affairs. If I have a problem with the Telephone Company, then let the Telephone Company handle it.
If you or an agent for your company have made any negative report using my name and personal information to a credit reporting agency, I demand you immediately remove it and return any and all documentation referring to me back to the Telephone Company.
Furthermore, you are not to contact me in any way in the future except by mail to let me know you are complying with my demand.
Thank You,
Herman Munster
I am no way offering legal advice here but it never hurts to share something that helped me get rid of a headache. Once the collector turns the debt back over to the one who originally started the trouble in the first place, you have the ability to clear it up without having to deal with Debt Collector harassment.
I have found out that as a U.S. citizen, I have the right to tell them to take a hike and leave me alone. Below is the letter I sent that stops the harassment once and for all and gets the debt collector out of the picture so that you can deal with the one who you originally have a problem with.
To:
The Debt Collectors Name, Inc.
P.O. Box 00000
Somewhere, Ga 00000
From:
Herman Munster
66 Mocking Bird Lane
Out There, NY 00000
Ref:
Account #BR549
Debt Collectors,
When exactly did I enter into a contract that allowed your company to meddle in my personal affairs? I don't remember signing such a document, much less even agreeing to such an action. Please produce this document if it exists and send me a copy of it.
Nevertheless, I dispute this alleged debt even exists and cannot remember ever making such a debt of the outlandish amount claimed by you or the one you claim to represent. Therefore, please stay out of my personal affairs. If I have a problem with the Telephone Company, then let the Telephone Company handle it.
If you or an agent for your company have made any negative report using my name and personal information to a credit reporting agency, I demand you immediately remove it and return any and all documentation referring to me back to the Telephone Company.
Furthermore, you are not to contact me in any way in the future except by mail to let me know you are complying with my demand.
Thank You,
Herman Munster
I am no way offering legal advice here but it never hurts to share something that helped me get rid of a headache. Once the collector turns the debt back over to the one who originally started the trouble in the first place, you have the ability to clear it up without having to deal with Debt Collector harassment.
Handle Your Card Debts Well!
Your credit cards play an important role in building your credit score. Today, if you have a card you must use it because your issuer will, otherwise close it for non-usage. Closing will definitely hurt your score and hence you use them to maintain a healthy report.
Your credit card debt needs to be handled properly if you want to be hassle free. If you can use them wisely, you may be rewarded with a good score, a rate cut in interests as well as an increased limit. Using them in the wrong manner might result in a bad score, increased interest rates and lower limit of course.
Credit card don'ts - When using plastic money don't:
• Make everyday purchases like grocery, clothing and gas or use them as a replacement for cash. These are items you need to purchase with cash and if you use your plastic money for ordinary purchases like this, you may get in to this habit and hence incur huge debt without realizing on time.
• Make minimum payments only. If you make minimum payments only, your time to pay off the entire loan will increase and hence it will also increase your interest rate. Pay off as much as you can to get to get off the debt burden quickly.
• Make purchases for things you cannot afford to pay back. Although this may seem to be the easiest solution to that expensive camera you wanted to buy, but first analyze whether you can pay back the money within time.
• Cancel or close a card without first finding out how it will affect your report.
Credit card dos - When using plastic money, do:
• Think over before taking any decision when you have to make purchases using them. Make a distinction between things you want and things you need.
• Inform your lender if you will be late in paying your monthly dues in a particular month. Most of them are co operative if you confide in them.
• Keep your balances low. This will help maintain a good report. Again, lower balances are also easier to manage.
• Negotiate with your creditor for a lower rate of interest. The interest rate you are offered determines the amount you pay in order to hold a balance on your credit card. Make sure you get the best deal. Evaluate the rate of interest you pay regularly to confirm a good deal.
Your credit card debt needs to be handled properly if you want to be hassle free. If you can use them wisely, you may be rewarded with a good score, a rate cut in interests as well as an increased limit. Using them in the wrong manner might result in a bad score, increased interest rates and lower limit of course.
Credit card don'ts - When using plastic money don't:
• Make everyday purchases like grocery, clothing and gas or use them as a replacement for cash. These are items you need to purchase with cash and if you use your plastic money for ordinary purchases like this, you may get in to this habit and hence incur huge debt without realizing on time.
• Make minimum payments only. If you make minimum payments only, your time to pay off the entire loan will increase and hence it will also increase your interest rate. Pay off as much as you can to get to get off the debt burden quickly.
• Make purchases for things you cannot afford to pay back. Although this may seem to be the easiest solution to that expensive camera you wanted to buy, but first analyze whether you can pay back the money within time.
• Cancel or close a card without first finding out how it will affect your report.
Credit card dos - When using plastic money, do:
• Think over before taking any decision when you have to make purchases using them. Make a distinction between things you want and things you need.
• Inform your lender if you will be late in paying your monthly dues in a particular month. Most of them are co operative if you confide in them.
• Keep your balances low. This will help maintain a good report. Again, lower balances are also easier to manage.
• Negotiate with your creditor for a lower rate of interest. The interest rate you are offered determines the amount you pay in order to hold a balance on your credit card. Make sure you get the best deal. Evaluate the rate of interest you pay regularly to confirm a good deal.
Money Problems
Do you have money problems? Struggling to pay off your loans or store cards? A debt management plan or IVA can help you. If you owe at least £2000 to unsecured creditors and you can't afford your repayments, then this is a great way of getting you out of your debt problems. It means you don't have to pay back 100% of the debts you can't afford.
An unsecured creditor means one who cannot take something back off you if you can't pay them. For example if you have a car loan then the car can be taken back, or if you have a mortgage then your house can be taken back. Debts like personal loans, store / credit cards and payday loans are classed as unsecured.
A debt management plan is an informal arrangement between you and your creditors to ensure you pay them back something rather than end up paying them nothing at all, which might happen if you went bankrupt. It is beneficial for both parties - they get something, and you get your repayments reduced. It is managed by a third party, called a debt management company, who negotiate with your creditors to help you pay less each month. They also spread your payments out between all the people you owe money to.
An IVA is very similar to a debt plan, but they are a formal arrangement (you sign a contract) and they are managed by Insolvency Practitioners. You can also have some of your debt written off with an IVA.
Both options are excellent solutions to your money problems as long as you maintain discipline while paying back your debt.
An unsecured creditor means one who cannot take something back off you if you can't pay them. For example if you have a car loan then the car can be taken back, or if you have a mortgage then your house can be taken back. Debts like personal loans, store / credit cards and payday loans are classed as unsecured.
A debt management plan is an informal arrangement between you and your creditors to ensure you pay them back something rather than end up paying them nothing at all, which might happen if you went bankrupt. It is beneficial for both parties - they get something, and you get your repayments reduced. It is managed by a third party, called a debt management company, who negotiate with your creditors to help you pay less each month. They also spread your payments out between all the people you owe money to.
An IVA is very similar to a debt plan, but they are a formal arrangement (you sign a contract) and they are managed by Insolvency Practitioners. You can also have some of your debt written off with an IVA.
Both options are excellent solutions to your money problems as long as you maintain discipline while paying back your debt.
Is Debt Management a Good Idea?
The question of debt management is one that comes up often. It is an option many take not because they think of it, but because they are approached by a company in a cold call. Often a debt management company trawls through the court records looking for people that are suffering with debt problems and ending up in court as a result. These kinds of tactics are a mixed blessing. For some the fact that they have an option to get help with their debt problems is great news, but often the companies making the calls are not the best choice.
All to many people end up in a debt management scheme that is not the right one for them. It could be that the company involved take a large upfront fee, which the truly ethical ones don't, or they are not effective in negotiating with the creditors and therefore cause problems for the client in getting the payments reduced and the phone calls stopped.
In addition many victims of debt have been treated badly, even illegally by their bank and in many of these cases the debt itself may be unenforceable. If this is the case then it is vital to find a debt management company that will check out the legality of your contract and place it with a debt write-off specialist if possible. Unfortunately many debt management companies are more interested in there own benefit rather than yours.
Finding a highly professional and skilled company that is associated to a successful claims handling agency allow you to win in both directions. The debt management company will get your repayments down to a manageable level, often freezing the interest at the same time, and then once the payments are at a manageable level, seek to get the debt written off. A total win-win situation for you.
Although the entire process can take up to a year to complete, it is a way of maximising your effective income and getting your life back while the professionals work on your behalf to set you free.
So, is debt management a good idea for you? That all depends which company you choose.
All to many people end up in a debt management scheme that is not the right one for them. It could be that the company involved take a large upfront fee, which the truly ethical ones don't, or they are not effective in negotiating with the creditors and therefore cause problems for the client in getting the payments reduced and the phone calls stopped.
In addition many victims of debt have been treated badly, even illegally by their bank and in many of these cases the debt itself may be unenforceable. If this is the case then it is vital to find a debt management company that will check out the legality of your contract and place it with a debt write-off specialist if possible. Unfortunately many debt management companies are more interested in there own benefit rather than yours.
Finding a highly professional and skilled company that is associated to a successful claims handling agency allow you to win in both directions. The debt management company will get your repayments down to a manageable level, often freezing the interest at the same time, and then once the payments are at a manageable level, seek to get the debt written off. A total win-win situation for you.
Although the entire process can take up to a year to complete, it is a way of maximising your effective income and getting your life back while the professionals work on your behalf to set you free.
So, is debt management a good idea for you? That all depends which company you choose.
Bankruptcy, When it is the Only Option
When an individual is unable to pay off his debts on time, then they can consider filing for bankruptcy as an option to get out of debt. A majority of the people use it as a last option. You can generally receive your discharge after one year if you are filing for the first time. Though your situation is made public, it could save you a lot of stress and get you a fresh financial start. It has become a logical, legal and valuable option for many to use to solve a difficult and challenging bad debt situation.
When your creditors file a petition against you, this is known as involuntary bankruptcy. Your creditors can choose to use this as an option to get back what is owed to them. You as the debtor can also choose to declare bankruptcy (voluntary bankruptcy) as a way to help eliminate debt. It is always wise to co-operate with your creditors once proceedings begin. Lack of acknowledgement will only make matters worse for you and an order can still be made. You can try and come to a settlement with your creditor(s) before proceedings begin.
Declaring bankruptcy has its consequences. Apart from the fact that your credit worthiness is affected and the financial implications there are also many social implications. This include losing control of your assets and also you cannot act as a company director. Trading in any business under another name is not allowed unless you inform all other parties concerned. Besides this, you are also not permitted to become a member of the local authority or even a member of parliament.
If you choose bankruptcy as an option, you should be ready to deal with the consequences. In long run though, you will have peace of mind and a brand new start.
When your creditors file a petition against you, this is known as involuntary bankruptcy. Your creditors can choose to use this as an option to get back what is owed to them. You as the debtor can also choose to declare bankruptcy (voluntary bankruptcy) as a way to help eliminate debt. It is always wise to co-operate with your creditors once proceedings begin. Lack of acknowledgement will only make matters worse for you and an order can still be made. You can try and come to a settlement with your creditor(s) before proceedings begin.
Declaring bankruptcy has its consequences. Apart from the fact that your credit worthiness is affected and the financial implications there are also many social implications. This include losing control of your assets and also you cannot act as a company director. Trading in any business under another name is not allowed unless you inform all other parties concerned. Besides this, you are also not permitted to become a member of the local authority or even a member of parliament.
If you choose bankruptcy as an option, you should be ready to deal with the consequences. In long run though, you will have peace of mind and a brand new start.
Bankruptcy Chapter 7, What it States
When you file for bankruptcy, you give yourself a chance to redeem yourself from financial problems. A chapter 7 bankruptcy is good way to start afresh financially and eliminates your debt problems faster. It is also known as liquidation or straight bankruptcy, which is the sale of a debtor's nonexempt assets and then the earnings are distributed to the creditors. What the debtor is allowed to keep is known as exempt property which is determined by the state law. This bankruptcy option is normally used in cases where the debtor has no property to lose.
Chapter 7 bankruptcy is the most common alternative amongst debtors. This is because it is one of the quickest ways the debtor gets to clear his debts. To file for this type of bankruptcy, you are required to file a petition plus other forms which you then file with the bankruptcy court in your region. When you fill in the forms you are required to describe your assets, your recent income and expenses, what you owe, assets that you state you are allowed to keep by law, property that you owned and money spent in the two previous years and additionally, property that you sold or gave out in the last two years.
When you file for a Chapter 7 bankruptcy, an appointed trustee collects all your no-exempt property and sells your assets. Proceeds from this are then distributed among your creditors. The debtor receives freedom from all dischargeable debts.
An added advantage when you file for Chapter 7 bankruptcy is that the "Order of relief" is put into effect. Informally known as the automatic stay, this immediately stops your creditors from coming after your assets or cutting off your utility services.
Chapter 7 bankruptcy is the most common alternative amongst debtors. This is because it is one of the quickest ways the debtor gets to clear his debts. To file for this type of bankruptcy, you are required to file a petition plus other forms which you then file with the bankruptcy court in your region. When you fill in the forms you are required to describe your assets, your recent income and expenses, what you owe, assets that you state you are allowed to keep by law, property that you owned and money spent in the two previous years and additionally, property that you sold or gave out in the last two years.
When you file for a Chapter 7 bankruptcy, an appointed trustee collects all your no-exempt property and sells your assets. Proceeds from this are then distributed among your creditors. The debtor receives freedom from all dischargeable debts.
An added advantage when you file for Chapter 7 bankruptcy is that the "Order of relief" is put into effect. Informally known as the automatic stay, this immediately stops your creditors from coming after your assets or cutting off your utility services.
Wednesday, August 26, 2009
How to Effectively Deal With Debt Collectors
Have you had the phone ring and someone from some Debt Collections Company is on the other end, wanting "to help you pay your debt"?
What should you do? Go along with them and make some offer you can afford or tell them where they can go jump!
Well before you answer that, you need to understand how Banks and other Credit Institutions "lend" money.
The appearance, and what we are kind of being told, is that the lender has a pile of money sitting around that he likes to lend to someone who can pay it back, and if you just apply, you could qualify for a loan or card.
The Truth is that no Bank EVER lends any of its own money or any of it's depositors money. What happens is that your application is converted into a Negotiable Instrument worth the amount you are applying to borrow. The bank takes your application and either trades it for funds or uses it directly as a deposit from you. It then credits your account with the money you asked for. It's books are now balanced.
Now it wants the money of the loan again from your labour as well as interest. Now do you see why the banks make such obscene profits all the time? For a more complete picture, type "Money as Debt" into Google Videos.
Anyway, back to the Debt Collectors. These businesses has bought you "debt" for a fraction of the value of the "debt". They are now hoping to recover the full amount from you, or at least more than they paid for the account.
If you have decided, taking the above into consideration, that you rather pay it off, then go ahead and deal with them. Preferably pay as little as possible and save the rest until you can make an offer to settle the "debt". If you write a settlement cheque, first get in writing that you will not receive any more claims against this account from anyone including the Original Bank. Also get in writing that Credit Rating Agencies will be informed that the account has been paid in full (not settled).
Write on the check "Full and Final payment". If they cash it, they agree to this.
If however you do not think they should have any money, make it clear from the beginning that you do not recognize their authority. Do not agree anything with them, like submitting to their "For Security purposes, can you please tell me...". If you do, you have with your actions said "I grant you the authority you seek". Do not admit you have a debt even. It is none of their business.
They will try all kinds of bluffs. They will say that they act on behalf of the Bank. That they by signing your application and thereby accepting the Terms & Conditions, you agreed that they can collect money for the Bank. (You agreed that the bank can transfer the account to a Collection Agency - so you do not object to that. But you never agreed that such an agency is having the authority to collect. See the difference?)
Truth is - they are third party interlopers and you have no written contract with them, and you should not enter into any verbal or implied contract by anything you say or by cooperating. You should not even talk to them. I interrupt them immediately and say "I do not discuss important matters over the phone, if you have anything to say to me, put it in writing and I will reply in writing". Remember they record the call, and if your tongue slips, they will make a transcript and use it against you.
You need to reply to their letters promptly, or you will be in dishonour, which will let them take the matter to Court for settlement.
I have sent them all packing by just repeating in various ways that I do not deal with them until they have proven their jurisdiction - either they come up with a contract between them and me or they show me the law they are operating on. Not one of them have been able to do this and have eventually given up, without attempting to take me to Court. They may have a lawyer write me, but they have all been asking for payment, so they too are acting as debt collectors, and I treat them the same. They know the law, so they do not write more than once.
What should you do? Go along with them and make some offer you can afford or tell them where they can go jump!
Well before you answer that, you need to understand how Banks and other Credit Institutions "lend" money.
The appearance, and what we are kind of being told, is that the lender has a pile of money sitting around that he likes to lend to someone who can pay it back, and if you just apply, you could qualify for a loan or card.
The Truth is that no Bank EVER lends any of its own money or any of it's depositors money. What happens is that your application is converted into a Negotiable Instrument worth the amount you are applying to borrow. The bank takes your application and either trades it for funds or uses it directly as a deposit from you. It then credits your account with the money you asked for. It's books are now balanced.
Now it wants the money of the loan again from your labour as well as interest. Now do you see why the banks make such obscene profits all the time? For a more complete picture, type "Money as Debt" into Google Videos.
Anyway, back to the Debt Collectors. These businesses has bought you "debt" for a fraction of the value of the "debt". They are now hoping to recover the full amount from you, or at least more than they paid for the account.
If you have decided, taking the above into consideration, that you rather pay it off, then go ahead and deal with them. Preferably pay as little as possible and save the rest until you can make an offer to settle the "debt". If you write a settlement cheque, first get in writing that you will not receive any more claims against this account from anyone including the Original Bank. Also get in writing that Credit Rating Agencies will be informed that the account has been paid in full (not settled).
Write on the check "Full and Final payment". If they cash it, they agree to this.
If however you do not think they should have any money, make it clear from the beginning that you do not recognize their authority. Do not agree anything with them, like submitting to their "For Security purposes, can you please tell me...". If you do, you have with your actions said "I grant you the authority you seek". Do not admit you have a debt even. It is none of their business.
They will try all kinds of bluffs. They will say that they act on behalf of the Bank. That they by signing your application and thereby accepting the Terms & Conditions, you agreed that they can collect money for the Bank. (You agreed that the bank can transfer the account to a Collection Agency - so you do not object to that. But you never agreed that such an agency is having the authority to collect. See the difference?)
Truth is - they are third party interlopers and you have no written contract with them, and you should not enter into any verbal or implied contract by anything you say or by cooperating. You should not even talk to them. I interrupt them immediately and say "I do not discuss important matters over the phone, if you have anything to say to me, put it in writing and I will reply in writing". Remember they record the call, and if your tongue slips, they will make a transcript and use it against you.
You need to reply to their letters promptly, or you will be in dishonour, which will let them take the matter to Court for settlement.
I have sent them all packing by just repeating in various ways that I do not deal with them until they have proven their jurisdiction - either they come up with a contract between them and me or they show me the law they are operating on. Not one of them have been able to do this and have eventually given up, without attempting to take me to Court. They may have a lawyer write me, but they have all been asking for payment, so they too are acting as debt collectors, and I treat them the same. They know the law, so they do not write more than once.
Three Options For Credit Card Debt Assistance
It doesn't always take a string of nasty phone calls from collection agencies for people to realize they need some good credit card debt assistance. Often, people realize they are in trouble (or about to get into trouble) when other events take shape, such as the loss of income, temporary or permanent layoff, and so on. Other symptoms might show up when people are unable to maintain their existing lifestyle or when a reduced lifestyle cannot be maintained.
When looking at different options when it comes to credit card debt assistance, debtors will invariably investigate the worst-case scenario, which would be bankruptcy. If they are able to stick a structured debt repayment program, they might come across and consider their debt settlement options and, lastly, they may even realize that they can manage the debt themselves through a debt management program.
We will take a quick look at these three options when it comes to credit card debt assistance: Chapter 7 bankruptcy, debt settlement options, and the debt management program.
Chapter 7 Bankruptcy
As possible the worst option, Chapter 7 bankruptcy offers the most depth when it comes to credit card debt assistance. Why? Because Chapter 7 Bankruptcy essentially wipes the debt clear off your slate. This means that if a debtor owes $30,000 in credit debt, they will have to repay nothing. Not a single penny. This becomes the biggest advantage to Chapter 7 Bankruptcy as far as credit card debt assistance is concerned because it allows the debtor to start fresh.
That fresh start, however, will not happen for a handful of years. To be precise, it can be anywhere from 6 to 10 years depending on when the Chapter 7 bankruptcy is discharged. During this time, debtors will suffer from a poor credit score and will encounter difficulties when it comes to obtaining new credit, including secured credit. This makes purchasing a home, replacing a vehicle (if financing is needed), as well as minor purchases that need financing (such as an engagement ring or appliances) nearly impossible to obtain.
Once debtors who need credit card debt assistance realize how financially debilitating Chapter 7 bankruptcy can be, they often steer clear and consider the next option -- debt settlement.
Debt Settlement
Unlike Chapter 7 bankruptcy, debt settlement allows a debtor to reduce his credit card debt levels by as much as 65%. Debt settlement can make debt repayment more affordable for an individual, but it also comes with damage to a credit score.
Debtors who choose this option can deal with their creditors on their own or can hire an agency to make the arrangements on their behalf. This comes at a cost, which is either paid up front or as part of the monthly settlement payments.
The downfall to debt settlement is that it damages the credit history and regular payments are required of the debtor. If the debtor misses a payment for any reason, the creditor can take action despite all of the work and effort that the debtor has already invested. Another downfall is that not all of the debt is eliminated, but since only a fraction is required to be repaid, debt settlement is often the option of choice for debtors seeking credit card debt assistance.
Debt Management Program
For the astute debtor, a debt management program may be the only viable option. Since a debt management program is normally a self-made debt repayment plan, it allows the debtor to repay credit debt without experiencing the damaging effects on the credit bureau and without having the deal with difficult credits. A successful debt management program will consist of a detailed budget to determine just how much extra money can be allocated toward debt, a repayment plan that incorporates monthly, accrued interest and a schedule that allows the debtor to monitor progress and stay focused.
The biggest downfall with a debt management program is that it becomes the debtor's responsibility to ensure they are able to maintain their payments and stay focused. In this regard, a debt management program does is not provide credit card debt assistance per se, but instead allows the debtor to take back control and steer their debt in the right direction.
In many cases, if debtors are able to negotiate a structured debt settlement with creditors and repay a reduced debt, they can avoid all of the disadvantages that come with the settlement by opting instead to create a debt management program. While there are no written off balances with a debt management program, the debtor does enjoy greater long-term benefits if they manage their debt themselves.
Regardless of which options works best for a debtor, they should make sure that they understand all credit card debt assistance options before they choose any single one of them. The consequences of choosing the wrong option can often be worse than any collection call or short-term sacrifice.
When looking at different options when it comes to credit card debt assistance, debtors will invariably investigate the worst-case scenario, which would be bankruptcy. If they are able to stick a structured debt repayment program, they might come across and consider their debt settlement options and, lastly, they may even realize that they can manage the debt themselves through a debt management program.
We will take a quick look at these three options when it comes to credit card debt assistance: Chapter 7 bankruptcy, debt settlement options, and the debt management program.
Chapter 7 Bankruptcy
As possible the worst option, Chapter 7 bankruptcy offers the most depth when it comes to credit card debt assistance. Why? Because Chapter 7 Bankruptcy essentially wipes the debt clear off your slate. This means that if a debtor owes $30,000 in credit debt, they will have to repay nothing. Not a single penny. This becomes the biggest advantage to Chapter 7 Bankruptcy as far as credit card debt assistance is concerned because it allows the debtor to start fresh.
That fresh start, however, will not happen for a handful of years. To be precise, it can be anywhere from 6 to 10 years depending on when the Chapter 7 bankruptcy is discharged. During this time, debtors will suffer from a poor credit score and will encounter difficulties when it comes to obtaining new credit, including secured credit. This makes purchasing a home, replacing a vehicle (if financing is needed), as well as minor purchases that need financing (such as an engagement ring or appliances) nearly impossible to obtain.
Once debtors who need credit card debt assistance realize how financially debilitating Chapter 7 bankruptcy can be, they often steer clear and consider the next option -- debt settlement.
Debt Settlement
Unlike Chapter 7 bankruptcy, debt settlement allows a debtor to reduce his credit card debt levels by as much as 65%. Debt settlement can make debt repayment more affordable for an individual, but it also comes with damage to a credit score.
Debtors who choose this option can deal with their creditors on their own or can hire an agency to make the arrangements on their behalf. This comes at a cost, which is either paid up front or as part of the monthly settlement payments.
The downfall to debt settlement is that it damages the credit history and regular payments are required of the debtor. If the debtor misses a payment for any reason, the creditor can take action despite all of the work and effort that the debtor has already invested. Another downfall is that not all of the debt is eliminated, but since only a fraction is required to be repaid, debt settlement is often the option of choice for debtors seeking credit card debt assistance.
Debt Management Program
For the astute debtor, a debt management program may be the only viable option. Since a debt management program is normally a self-made debt repayment plan, it allows the debtor to repay credit debt without experiencing the damaging effects on the credit bureau and without having the deal with difficult credits. A successful debt management program will consist of a detailed budget to determine just how much extra money can be allocated toward debt, a repayment plan that incorporates monthly, accrued interest and a schedule that allows the debtor to monitor progress and stay focused.
The biggest downfall with a debt management program is that it becomes the debtor's responsibility to ensure they are able to maintain their payments and stay focused. In this regard, a debt management program does is not provide credit card debt assistance per se, but instead allows the debtor to take back control and steer their debt in the right direction.
In many cases, if debtors are able to negotiate a structured debt settlement with creditors and repay a reduced debt, they can avoid all of the disadvantages that come with the settlement by opting instead to create a debt management program. While there are no written off balances with a debt management program, the debtor does enjoy greater long-term benefits if they manage their debt themselves.
Regardless of which options works best for a debtor, they should make sure that they understand all credit card debt assistance options before they choose any single one of them. The consequences of choosing the wrong option can often be worse than any collection call or short-term sacrifice.
Get Rid of Debt - 10 Ways to Pay Down Your Home Loan Mortgage Sooner
Below are the top 10 ways to pay down your home loan mortgage sooner:
1. Make Additional Repayments To Your Loan
It is amazing how much an extra $10, $20 or $50 per week can make to your home loan over the long term. If you are determined to cut down your spending, and start to watch your money more carefully, this can be quite easy to achieve. Having a budget can help you find this extra money. It is amazing how a small amount of money can make a large difference to your long term financial future.
2. Make More Regular Repayments To Your Loan
The interest cost on your home loan is more than likely calculated daily, so if you can make more regular repayments you can pay more off the loan sooner and reduce your interest costs.
The easiest way to do this is set up your loan repayments to match when you receive your wages / income. I.e. if you get paid on a fortnightly basis you may wish to pay the fortnightly portion in that pay rather than waiting to pay it on the day of the month, when your repayments fall due.
3. Look At Other Loan Options
There may be cheaper interest rates or lower fee loans on the market that you may be considering. This means that if you can get a cheaper interest rate and continue to pay the same amount in repayments that you are currently paying, you will pay more off the principal component of the loan, clear the loan sooner and save yourself interest.
If considering changing financial institutions to get a better loan deal, be careful. Explore this option carefully as there may be refinancing costs involved.
Speak to your own bank about your loans including your fees and interest costs. You never know, you may be able to get a better deal through your existing financial institution if you ask.
4. Save Via A 100% Offset Savings Account
Consider putting savings in an offset account attached to your loan. If you have any money sitting around in different accounts consider consolidating them and putting all proceeds into a 100% offset savings account.
The interest charged on your home loan is calculated on the difference between the home loan balance less the balance in your savings account. This works the same way as if you had paid the money directly into your home loan but instead the money is kept available to you in your savings account.
5. Pay Any Spare Income Into Your Home Loan
Use monies such as your tax refund or bonus payments to drive down your loan. If these monies haven't been allocated elsewhere, you can make a large dint in your home loan by paying off lump sums. You may like to set aside some of your bonus to reward yourself for a job well done, but try to allocate a portion of these amounts to your home loan to drive this debt down. You can always reward yourself later when you are living in your home debt free (some food for thought!).
6. Hit The Principal Early
When you initially get your home loan, you may be in a good position to drive down the debt before you get married, have children or go overseas etc.
At the beginning of a home loan you will generally be paying a higher proportion in interest costs as the debt will be higher. As you pay down the loan, more of your repayments are reducing the principal amount. Therefore if you can pay more into the loan initially, reducing the principal amount, you can reduce your home loan sooner.
7. Pay Your First Home Loan Payment As Soon As You Settle
Why not get ahead on your loan as soon as you start off. A good trick is making a payment on the day the loan settles. This way you are always one payment ahead and are saving a bit of interest from day one.
8. Don't Lower Your Repayment
If your minimum home loan repayment drops because of a fall in interest rates, don't lower your repayments. By continuing to pay your normal repayments you will be able to reduce the balance of your loan a lot sooner.
9. Check Your Loan Statements
It is up to you to check your loan statements frequently to ensure the fees and charges you are incurring are correct. Check for in discrepancies with:
* Interest rates
* Monthly service fees
* Yearly service fees
* Loan establishment costs
* Repayment amounts
10. Ask About Professional Packages or Special Deals On Your Home Loan
Some banks will offer packages for certain occupations or those people with lending over certain levels. These packages can be quite effective with offering cheaper interest rates, reduced fees or other benefits. Always ask your bank to see what they can do for you.
I hope this has given you some motivation to get a few extra dollars into your home loan mortgage so that you can pay off your home loan sooner.
1. Make Additional Repayments To Your Loan
It is amazing how much an extra $10, $20 or $50 per week can make to your home loan over the long term. If you are determined to cut down your spending, and start to watch your money more carefully, this can be quite easy to achieve. Having a budget can help you find this extra money. It is amazing how a small amount of money can make a large difference to your long term financial future.
2. Make More Regular Repayments To Your Loan
The interest cost on your home loan is more than likely calculated daily, so if you can make more regular repayments you can pay more off the loan sooner and reduce your interest costs.
The easiest way to do this is set up your loan repayments to match when you receive your wages / income. I.e. if you get paid on a fortnightly basis you may wish to pay the fortnightly portion in that pay rather than waiting to pay it on the day of the month, when your repayments fall due.
3. Look At Other Loan Options
There may be cheaper interest rates or lower fee loans on the market that you may be considering. This means that if you can get a cheaper interest rate and continue to pay the same amount in repayments that you are currently paying, you will pay more off the principal component of the loan, clear the loan sooner and save yourself interest.
If considering changing financial institutions to get a better loan deal, be careful. Explore this option carefully as there may be refinancing costs involved.
Speak to your own bank about your loans including your fees and interest costs. You never know, you may be able to get a better deal through your existing financial institution if you ask.
4. Save Via A 100% Offset Savings Account
Consider putting savings in an offset account attached to your loan. If you have any money sitting around in different accounts consider consolidating them and putting all proceeds into a 100% offset savings account.
The interest charged on your home loan is calculated on the difference between the home loan balance less the balance in your savings account. This works the same way as if you had paid the money directly into your home loan but instead the money is kept available to you in your savings account.
5. Pay Any Spare Income Into Your Home Loan
Use monies such as your tax refund or bonus payments to drive down your loan. If these monies haven't been allocated elsewhere, you can make a large dint in your home loan by paying off lump sums. You may like to set aside some of your bonus to reward yourself for a job well done, but try to allocate a portion of these amounts to your home loan to drive this debt down. You can always reward yourself later when you are living in your home debt free (some food for thought!).
6. Hit The Principal Early
When you initially get your home loan, you may be in a good position to drive down the debt before you get married, have children or go overseas etc.
At the beginning of a home loan you will generally be paying a higher proportion in interest costs as the debt will be higher. As you pay down the loan, more of your repayments are reducing the principal amount. Therefore if you can pay more into the loan initially, reducing the principal amount, you can reduce your home loan sooner.
7. Pay Your First Home Loan Payment As Soon As You Settle
Why not get ahead on your loan as soon as you start off. A good trick is making a payment on the day the loan settles. This way you are always one payment ahead and are saving a bit of interest from day one.
8. Don't Lower Your Repayment
If your minimum home loan repayment drops because of a fall in interest rates, don't lower your repayments. By continuing to pay your normal repayments you will be able to reduce the balance of your loan a lot sooner.
9. Check Your Loan Statements
It is up to you to check your loan statements frequently to ensure the fees and charges you are incurring are correct. Check for in discrepancies with:
* Interest rates
* Monthly service fees
* Yearly service fees
* Loan establishment costs
* Repayment amounts
10. Ask About Professional Packages or Special Deals On Your Home Loan
Some banks will offer packages for certain occupations or those people with lending over certain levels. These packages can be quite effective with offering cheaper interest rates, reduced fees or other benefits. Always ask your bank to see what they can do for you.
I hope this has given you some motivation to get a few extra dollars into your home loan mortgage so that you can pay off your home loan sooner.
Put Pencil to Paper Before Issuing Private Debt
You need to have an "Ask" when you're seeking to raise capital. Know how much you are looking for, and describe the terms under which you will be accepting investors. Going through the process of writing a term sheet will crystallize your Ask and help you better frame your capital raising efforts.
I see a lot of posts on forums where people are asking for investors to invest in their idea or business. Too often it appears that they haven't thought about what they are asking for. All you'll see is requests for a "partner", or promises of a good return.
The problem is that there is nothing to frame the conversation. Having an "Ask" will do that; and the best way to have an Ask is to sit down and draft a term sheet. A term sheet will force you to articulate the type of deal you are willing to strike. And more importantly, your prospective investors now have something to judge whether your terms match up with their risk profile. (Your term sheet is not a stand-alone capital raising document, but a part of your Private Placement Memorandum, or PPM.)
And, don't fall into the trap of leaving it up to the investors to tell you what they want - you'll end up with as many different structures as prospective investors you talk to. Beside, they'll still tell you what they want, but when you define the terms, at least you will have framed the conversation.
For example, if you are looking to issue debt (yes, you are issuing a security when you raise capital), there are several pieces of information that should be incorporated, as well as terms you will need to think about.
First don't assume that your investor knows about your company. Tell them who the Issuer is and how it is organized. You may want to state something like - "Blue Widget, Inc. is an Ohio corporation. All references to "Issuer", "we", "us", "our" or "BWI" refer to Blue Widget, Inc."
How much capital are you looking to raise? You'll want to state a range of how much you are looking for. Make sure your minimum is sufficient to achieve your overall objectives for raising the capital in the first place. For example, if you need $300,000 to expand your facility to meet increased demand, don't set your minimum at $200,000 unless you address how you plan to meet the gap.
Be clear about why you are seeking to raise capital. Your investor will want to know what you plan to do with the money you raise, so state the purpose of your capital raising efforts. Are you expanding your facility; making an acquisition; paying off other debt that's coming due; purchasing new equipment? Whatever it is, state the purpose clearly and succinctly. It doesn't have to be more that a few sentences. You'll go into more detail in your PPM.
Some of the salient terms you should address include the interest rate you are willing to pay on the Notes. Whether the interest rate is paid in cash, accrued, or a combination. How often the interest is paid - is it paid monthly or quarterly? Will the interest rate be fixed or will if float at some spread over an index such as Prime?
Will your Notes be secured or unsecured? The answer to this question will have implications on the rate of interest you will have to pay. One thing lenders (whether private investors of institutions like a bank) want is protection of principal - they want to make sure they can get their money back. Having collateral gives the lender comfort that if the business cannot afford to repay the loan, they can liquidate the collateral for repayment. No collateral means higher risk, which means a higher interest rate.
If your Notes will be secured, you will need to describe what the collateral is and whether the Note holder(s) will be in a primary position or in a secondary position.
How will your Note be repaid? Don't think all Notes are repaid on a fixed, monthly schedule basis. You have a lot of options when it comes to repaying your Note. You can have scheduled installment payments that amortize the loan on a monthly or quarterly basis over the term of the loan. These payments do not have to be in equal installments. For example, you may want to have lower quarterly payments in the first couple of years of your loan, and higher installments in the later years. You can also structure your Note so that there are no scheduled payments, but the repayments come out of some percentage of the Issuer's free cash flow. Or, you can pay interest only and have a balloon payment at maturity.
This just scratches the surface, but you can see that there are plenty of issues to think about. When you sit down to write your term sheet, you have a clean sheet of paper. Just make sure that it works for you and for the investors.
I see a lot of posts on forums where people are asking for investors to invest in their idea or business. Too often it appears that they haven't thought about what they are asking for. All you'll see is requests for a "partner", or promises of a good return.
The problem is that there is nothing to frame the conversation. Having an "Ask" will do that; and the best way to have an Ask is to sit down and draft a term sheet. A term sheet will force you to articulate the type of deal you are willing to strike. And more importantly, your prospective investors now have something to judge whether your terms match up with their risk profile. (Your term sheet is not a stand-alone capital raising document, but a part of your Private Placement Memorandum, or PPM.)
And, don't fall into the trap of leaving it up to the investors to tell you what they want - you'll end up with as many different structures as prospective investors you talk to. Beside, they'll still tell you what they want, but when you define the terms, at least you will have framed the conversation.
For example, if you are looking to issue debt (yes, you are issuing a security when you raise capital), there are several pieces of information that should be incorporated, as well as terms you will need to think about.
First don't assume that your investor knows about your company. Tell them who the Issuer is and how it is organized. You may want to state something like - "Blue Widget, Inc. is an Ohio corporation. All references to "Issuer", "we", "us", "our" or "BWI" refer to Blue Widget, Inc."
How much capital are you looking to raise? You'll want to state a range of how much you are looking for. Make sure your minimum is sufficient to achieve your overall objectives for raising the capital in the first place. For example, if you need $300,000 to expand your facility to meet increased demand, don't set your minimum at $200,000 unless you address how you plan to meet the gap.
Be clear about why you are seeking to raise capital. Your investor will want to know what you plan to do with the money you raise, so state the purpose of your capital raising efforts. Are you expanding your facility; making an acquisition; paying off other debt that's coming due; purchasing new equipment? Whatever it is, state the purpose clearly and succinctly. It doesn't have to be more that a few sentences. You'll go into more detail in your PPM.
Some of the salient terms you should address include the interest rate you are willing to pay on the Notes. Whether the interest rate is paid in cash, accrued, or a combination. How often the interest is paid - is it paid monthly or quarterly? Will the interest rate be fixed or will if float at some spread over an index such as Prime?
Will your Notes be secured or unsecured? The answer to this question will have implications on the rate of interest you will have to pay. One thing lenders (whether private investors of institutions like a bank) want is protection of principal - they want to make sure they can get their money back. Having collateral gives the lender comfort that if the business cannot afford to repay the loan, they can liquidate the collateral for repayment. No collateral means higher risk, which means a higher interest rate.
If your Notes will be secured, you will need to describe what the collateral is and whether the Note holder(s) will be in a primary position or in a secondary position.
How will your Note be repaid? Don't think all Notes are repaid on a fixed, monthly schedule basis. You have a lot of options when it comes to repaying your Note. You can have scheduled installment payments that amortize the loan on a monthly or quarterly basis over the term of the loan. These payments do not have to be in equal installments. For example, you may want to have lower quarterly payments in the first couple of years of your loan, and higher installments in the later years. You can also structure your Note so that there are no scheduled payments, but the repayments come out of some percentage of the Issuer's free cash flow. Or, you can pay interest only and have a balloon payment at maturity.
This just scratches the surface, but you can see that there are plenty of issues to think about. When you sit down to write your term sheet, you have a clean sheet of paper. Just make sure that it works for you and for the investors.
Debts - The Various Categories
Having debts surround you can be stressing. When you borrow money from a bank or a friend, you are always expected to repay with or without interest. However, sometimes you may have the intention of repaying but things don't go your way and you end up being indebted to the person or bank. There are various categories of debt.
Secured or unsecured debts are one category of debt. Here one debt has collateral while the other doesn't. When you have a secured debt, there is tangible evidence of an asset or property attached to the it. Should you fail to repay the debt, the creditor has the legal advantage of taking your property and may sell it to get back what is owed. On the other hand, one most common form of an unsecured debt is a credit card. There is no asset or collateral attached to the it. This is risky for the creditor because they have to rely on the debtor's credit history.
Debts can also be classified as revolving or installment debt. In this category, the manner in which the debt is repaid determines whether it is one or the other. With revolving debt there is no standardized amount of money being paid as the amount can reduce or escalate depending on how the charges are made in a particular period of time. A good example of revolving one is when you use a credit card. An installment one is where you make consistent amount of monthly payments, an example of this would be car repayments.
The source of your debt is another category. This applies especially if you operate different types of credit cards. The interest rates charged differs from card to card. Some may be lower than others, so always research thoroughly before you apply for a one.
Secured or unsecured debts are one category of debt. Here one debt has collateral while the other doesn't. When you have a secured debt, there is tangible evidence of an asset or property attached to the it. Should you fail to repay the debt, the creditor has the legal advantage of taking your property and may sell it to get back what is owed. On the other hand, one most common form of an unsecured debt is a credit card. There is no asset or collateral attached to the it. This is risky for the creditor because they have to rely on the debtor's credit history.
Debts can also be classified as revolving or installment debt. In this category, the manner in which the debt is repaid determines whether it is one or the other. With revolving debt there is no standardized amount of money being paid as the amount can reduce or escalate depending on how the charges are made in a particular period of time. A good example of revolving one is when you use a credit card. An installment one is where you make consistent amount of monthly payments, an example of this would be car repayments.
The source of your debt is another category. This applies especially if you operate different types of credit cards. The interest rates charged differs from card to card. Some may be lower than others, so always research thoroughly before you apply for a one.
Christian Debt - What it Involves
The idea of being in debt can be stressful and inconveniencing for many individuals. The situation could even be made worse if you have no idea of how to get rid of your debt. For a lot of Christians, the thought of owing money is not always the best idea. However for others, it may not be a big deal as long as the family does not suffer any inconvenience.
There are Christian debt consolidation companies that help Christians eliminate their debt while at the same time complying with their way of life. They value your beliefs and that is why they offer spiritual counseling while at the same time arrange to consolidate your debt and organize ways for you to make your debt payments in the way that works best for you and your pocket.
As a Christian, going for a debt consolidation to repay your debt is done in good faith. With this knowledge, the creditors will be more lenient to the debtor and will offer favorable terms to the debtor to evade a long process should the debtor file for bankruptcy. The creditors also know that you could have a heavy burden on your hands should your account be taken over by a collection agency.
Most of the Christian consolidation companies are non-profit organizations, and are ready and willing to help Christians handle their debt. They work hand in hand with your creditors and renegotiate your terms of repayment, reduce your interest rates, organize flexible repayment schedules and help in debt consolidation loans. Christians should be able to live a debt free life after sessions with these companies.
There are Christian debt consolidation companies that help Christians eliminate their debt while at the same time complying with their way of life. They value your beliefs and that is why they offer spiritual counseling while at the same time arrange to consolidate your debt and organize ways for you to make your debt payments in the way that works best for you and your pocket.
As a Christian, going for a debt consolidation to repay your debt is done in good faith. With this knowledge, the creditors will be more lenient to the debtor and will offer favorable terms to the debtor to evade a long process should the debtor file for bankruptcy. The creditors also know that you could have a heavy burden on your hands should your account be taken over by a collection agency.
Most of the Christian consolidation companies are non-profit organizations, and are ready and willing to help Christians handle their debt. They work hand in hand with your creditors and renegotiate your terms of repayment, reduce your interest rates, organize flexible repayment schedules and help in debt consolidation loans. Christians should be able to live a debt free life after sessions with these companies.
How to Challenge an Unfair Credit Agreement
Thousands of people in the U.K have been the victim of unfair credit agreements, meaning that the loan and hire purchase agreements they took out are not legally binding. Under the terms of the Consumer Credit Act 1974, all credit agreements must conform to a list of criteria. If this is not the case, then individuals can have their debt wiped clear.
Read on to find out how you can find out if you have been among the thousands of people who have been affected by an unfair credit agreement, and what you can do to free yourself from this debt.
Stage 1 - Check the following:
The first stage in the process of establishing whether or not you have an unfair credit agreement is to check the following:
Your credit agreement must be in one of these forms:
• Credit Card
• Secured loan (using your property as a guarantee)
• Unsecured loan (without guarantee)
• Consolidation loan (taken out to cover smaller debts)
• Deferred loan (e.g. "buy now, pay next year")
• Vehicle finance loan (e.g. car loans)
In order to have a case, your credit agreement must have at least 12 months remaining and have over £1000 left to pay.
Stage 2 - Contact a claims company
The next stage in discovering whether or not you have an unfair credit agreement is to contact a specialist claims company, who will be able to advise you on whether or not you have a valid case, and if so, they will be able to guide you through the process
Stage 3 - Get a copy of the agreement
If it is agreed that you have a valid claim for an unfair credit agreement, the claims company you have assigned will contact the lender to request a copy of the original agreement. Under the terms of the Consumer Credit Act, they have an obligation to do this.
Stage 4 - Agreement is audited
Once they have received a copy of the credit agreement from your lender, your claims company will then forward this on to a team of solicitors who will carry out a comprehensive audit of the agreement. This will establish once and for all, whether or not you have grounds to prosecute the lender for issuing an unfair credit agreement.
Stage 5 - Litigation
If found to be in breach of the consumer credit act, your solicitors will bring this to the attention of your lender and will apply for a date to bring the case before the courts.
If a settlement is not made out of court, then your solicitor will represent you in court proceedings against the lender.
Stage 6 - Result
If your case is successful then your credit agreement will be deemed unenforceable, meaning that it will effectively be torn up. This means that you won't have to pay the outstanding balance on the agreement.
Read on to find out how you can find out if you have been among the thousands of people who have been affected by an unfair credit agreement, and what you can do to free yourself from this debt.
Stage 1 - Check the following:
The first stage in the process of establishing whether or not you have an unfair credit agreement is to check the following:
Your credit agreement must be in one of these forms:
• Credit Card
• Secured loan (using your property as a guarantee)
• Unsecured loan (without guarantee)
• Consolidation loan (taken out to cover smaller debts)
• Deferred loan (e.g. "buy now, pay next year")
• Vehicle finance loan (e.g. car loans)
In order to have a case, your credit agreement must have at least 12 months remaining and have over £1000 left to pay.
Stage 2 - Contact a claims company
The next stage in discovering whether or not you have an unfair credit agreement is to contact a specialist claims company, who will be able to advise you on whether or not you have a valid case, and if so, they will be able to guide you through the process
Stage 3 - Get a copy of the agreement
If it is agreed that you have a valid claim for an unfair credit agreement, the claims company you have assigned will contact the lender to request a copy of the original agreement. Under the terms of the Consumer Credit Act, they have an obligation to do this.
Stage 4 - Agreement is audited
Once they have received a copy of the credit agreement from your lender, your claims company will then forward this on to a team of solicitors who will carry out a comprehensive audit of the agreement. This will establish once and for all, whether or not you have grounds to prosecute the lender for issuing an unfair credit agreement.
Stage 5 - Litigation
If found to be in breach of the consumer credit act, your solicitors will bring this to the attention of your lender and will apply for a date to bring the case before the courts.
If a settlement is not made out of court, then your solicitor will represent you in court proceedings against the lender.
Stage 6 - Result
If your case is successful then your credit agreement will be deemed unenforceable, meaning that it will effectively be torn up. This means that you won't have to pay the outstanding balance on the agreement.
Nonprofit Debt Management - Finding the Best Solution For Reaching Debt Freedom
You are living paycheck to paycheck and you are barely doing that. You are scared that if you miss even one week of work that you will never recover. If this sounds like you, it is time to do something about your debt so that you can begin thinking about your future and leave the stress of debt behind you. So, where should you begin? What is the first step?
A nonprofit debt management company is a great place to start. These are often referred to as credit counseling companies and they are in the business of helping people get out of debt. They will consolidate your unsecured debts and you will not need a loan, good credit or home ownership. This should be somewhat of a relief. All you have to do is complete an online form and they will contact you within a few days. They will give you a quote on a monthly payment for the consolidation of all your unsecured debts.
You can be out of debt with credit counseling in five years or less. Your interest rates are reduced and as each account is paid off, the payment amount is used to pay off the other accounts that are still open. It is the interest rate reduction and this snowballing that allows your accounts to be paid off in much less time than they would be if you were making only minimum payments.
Through credit counseling you also have the option to use budgeting tools and to get other types of financial education, such as; how to begin preparing for retirement and how to remain debt free. If a debt counseling organization cannot help you, they are generally equipped to make referrals so that you can get the help you need. It is this that makes them a great option. You will not have to walk away not knowing where to turn next.
A nonprofit debt management company is a great place to start. These are often referred to as credit counseling companies and they are in the business of helping people get out of debt. They will consolidate your unsecured debts and you will not need a loan, good credit or home ownership. This should be somewhat of a relief. All you have to do is complete an online form and they will contact you within a few days. They will give you a quote on a monthly payment for the consolidation of all your unsecured debts.
You can be out of debt with credit counseling in five years or less. Your interest rates are reduced and as each account is paid off, the payment amount is used to pay off the other accounts that are still open. It is the interest rate reduction and this snowballing that allows your accounts to be paid off in much less time than they would be if you were making only minimum payments.
Through credit counseling you also have the option to use budgeting tools and to get other types of financial education, such as; how to begin preparing for retirement and how to remain debt free. If a debt counseling organization cannot help you, they are generally equipped to make referrals so that you can get the help you need. It is this that makes them a great option. You will not have to walk away not knowing where to turn next.
Collecting Debt? Seek a Professional Debt Collection Agent For Your Debt Collection Management
Professional debt collection management is a process that can greatly benefit a party or company. It is a process performed by Debt collection agents in behalf of the creditor, the client. Hence, they serve as the third party to the lender or creditor giving them the responsibility of collecting debts under some regulations in the respective area. Such regulations include the Fair Debt Collection Practices Act.
Maybe your company doesn't have the skills in collecting debt. The debt collector now becomes the professional representative of the creditor and the company's account department. The added skills and professionalism of the debt collector can resolve the friction between the two parties, the creditor and the debtor. In general, as based on practice, a debt collector can bring about a satisfactory conclusion of collecting the debt for the lender. In today's recession, many companies are concerned if employing a debt collector will require be the best for their business's future. Fortunately, most collection agencies are contracted in a pay for results basis making them more cost effective. Thus, the agency is always result-oriented in their transactions, targeting maximum customer satisfaction and good performance. In some instances there are some additional legal fees involved though.
This kind of service a company receives from a debt collector is really worth the effort to spend the money on such a service. The biggest advantage of hiring these agencies is to save the time and the frustration of handling such stress of collection. It reduces the wasted effort and time while the company concentrates on the real work in one's operations for the improvement of one's potential and growth. This is a huge advantage for the big businesses around where those executives at the helm of the decision making are too occupied to even devote some time on the debt collection issues.
There are some occasions however when a professional debt collector will fail to collect the debt from an individual. Certain causes of error are the following: old information, inaccurate details, and the actual bankruptcy of the debtor. Eventually, a professional debt collector can still provide some great tips to handle this situation.
In hiring the services of the debt collector, your business should fully understand that you only resort to collection agencies when your debtor is actually refusing to pay even if he has the capacity to pay (as verified before lending the amount) and the debt is already overdue. The company should also prove that the debtor has the obligation to pay the amount presented. Nevertheless, it is always preferred to attempt collection first through your follow up system before approaching the debt collector. Only when situation seems these debts seem to affect the company's cash flow will it be necessary to require professional debt collection help.
Maybe your company doesn't have the skills in collecting debt. The debt collector now becomes the professional representative of the creditor and the company's account department. The added skills and professionalism of the debt collector can resolve the friction between the two parties, the creditor and the debtor. In general, as based on practice, a debt collector can bring about a satisfactory conclusion of collecting the debt for the lender. In today's recession, many companies are concerned if employing a debt collector will require be the best for their business's future. Fortunately, most collection agencies are contracted in a pay for results basis making them more cost effective. Thus, the agency is always result-oriented in their transactions, targeting maximum customer satisfaction and good performance. In some instances there are some additional legal fees involved though.
This kind of service a company receives from a debt collector is really worth the effort to spend the money on such a service. The biggest advantage of hiring these agencies is to save the time and the frustration of handling such stress of collection. It reduces the wasted effort and time while the company concentrates on the real work in one's operations for the improvement of one's potential and growth. This is a huge advantage for the big businesses around where those executives at the helm of the decision making are too occupied to even devote some time on the debt collection issues.
There are some occasions however when a professional debt collector will fail to collect the debt from an individual. Certain causes of error are the following: old information, inaccurate details, and the actual bankruptcy of the debtor. Eventually, a professional debt collector can still provide some great tips to handle this situation.
In hiring the services of the debt collector, your business should fully understand that you only resort to collection agencies when your debtor is actually refusing to pay even if he has the capacity to pay (as verified before lending the amount) and the debt is already overdue. The company should also prove that the debtor has the obligation to pay the amount presented. Nevertheless, it is always preferred to attempt collection first through your follow up system before approaching the debt collector. Only when situation seems these debts seem to affect the company's cash flow will it be necessary to require professional debt collection help.
7 Ways You Can Clear Debt Now
Debt affects millions of people across the U.K. If you are one of them, take a few minutes to read the following article to discover some of the ways you can clear debt and look forward to a fresh start.
1. Budget
Having a budget, and most importantly sticking to it, is vital if you are to clear debt effectively. This involves sitting down and looking in detail at your income and expenditure, and identifying ways in which you can save money. Start by looking at how much money you owe and then put in place a plan to save enough money each month to pay it off.
2. Free Up Capital
The longer you leave debt, the more interest you are likely to incur, so paying it off as early as possible makes sense in the long run. If possible, free up as much capital as you can and pay off your creditors. This can be achieved, in many cases, by downsizing.
3. Downsize
Downsizing is a great way to free up equity and reduce the burden of large monthly payments. For example, moving house could help you to reduce your mortgage bills significantly, whilst also trimming utility bills.
The same goes for your car. If you car is expensive to run, then selling it could free up some vital money to clear debt.
4. Make Cut Backs
Most of us are having to make cut backs at the moment, but for those who are looking to clear debt, this is all the more apparent. Doing the weekly shop at a budget supermarket, for example, is just one of the ways you can make cost savings, without having to change your lifestyle. Most people will identify several areas they can cut back on, for example limiting the amount they spend on clothes or nights out.
5. Consolidate Loans
Consolidating loans and credit agreements into one manageable monthly repayment is an attractive option for many people looking to clear debt. Bear in mind, however, that the companies who provide this service make a profit, so you will end up paying an additional charge, on top of your loan repayments.
Taking the time to organise your own finances could be better in the long run, as not only will it save you money, but it will also help you to avoid falling into the same trap in the future.
6. IVAs
Independent Voluntary Agreements are similar to consolidating your loans, in that they involve contracting a debt management company to negotiate with creditors on your behalf. Often, this will result in reduced debt repayments.
7. Challenge Credit Agreements
Under the terms of the Consumer Credit Act (1974) credit agreements such as loans and hire purchase agreements must meet up to a series of criteria, in order to be considered legally binding. If this is not the case, then you may have a case to challenge the credit agreements and see the debt wiped off.
There are many companies who can help and advise you on whether or not your credit agreements are unfair, and therefore unenforceable. This is one of the most popular avenues which are explored by those who are looking to clear debt.
Now you know more about how you can clear debt, and how to get help, is now the right time to sort out your finances?
1. Budget
Having a budget, and most importantly sticking to it, is vital if you are to clear debt effectively. This involves sitting down and looking in detail at your income and expenditure, and identifying ways in which you can save money. Start by looking at how much money you owe and then put in place a plan to save enough money each month to pay it off.
2. Free Up Capital
The longer you leave debt, the more interest you are likely to incur, so paying it off as early as possible makes sense in the long run. If possible, free up as much capital as you can and pay off your creditors. This can be achieved, in many cases, by downsizing.
3. Downsize
Downsizing is a great way to free up equity and reduce the burden of large monthly payments. For example, moving house could help you to reduce your mortgage bills significantly, whilst also trimming utility bills.
The same goes for your car. If you car is expensive to run, then selling it could free up some vital money to clear debt.
4. Make Cut Backs
Most of us are having to make cut backs at the moment, but for those who are looking to clear debt, this is all the more apparent. Doing the weekly shop at a budget supermarket, for example, is just one of the ways you can make cost savings, without having to change your lifestyle. Most people will identify several areas they can cut back on, for example limiting the amount they spend on clothes or nights out.
5. Consolidate Loans
Consolidating loans and credit agreements into one manageable monthly repayment is an attractive option for many people looking to clear debt. Bear in mind, however, that the companies who provide this service make a profit, so you will end up paying an additional charge, on top of your loan repayments.
Taking the time to organise your own finances could be better in the long run, as not only will it save you money, but it will also help you to avoid falling into the same trap in the future.
6. IVAs
Independent Voluntary Agreements are similar to consolidating your loans, in that they involve contracting a debt management company to negotiate with creditors on your behalf. Often, this will result in reduced debt repayments.
7. Challenge Credit Agreements
Under the terms of the Consumer Credit Act (1974) credit agreements such as loans and hire purchase agreements must meet up to a series of criteria, in order to be considered legally binding. If this is not the case, then you may have a case to challenge the credit agreements and see the debt wiped off.
There are many companies who can help and advise you on whether or not your credit agreements are unfair, and therefore unenforceable. This is one of the most popular avenues which are explored by those who are looking to clear debt.
Now you know more about how you can clear debt, and how to get help, is now the right time to sort out your finances?
Subscribe to:
Posts (Atom)