The longer you leave a debt problem the worse it gets and by facing your debts immediately, you’ll be out of your debt problem a whole lot sooner. There is a solution for everyone.  Here are a number of basic tips to get you started

Pay your priority debts first

Priority debts include council tax, TV license, fines, rent, mortgage, utilities bills, hire-purchase agreements, taxes and child maintenance.

Unsecured loans and credit cards are not priorities, so if you must default on any debt repayments then choose these. The fact is that they’re at the bottom of the pile when it comes to repaying debts, which is why they’re often the most aggressive about chasing you.

Be strong

You don’t have to take harassment from creditors. You are well protected in law. If you’re harassed, let them know that it is a criminal offence to demand repayment in a way that causes you or your family fear, distress or humiliation under Section 2 of the Protection from Harassment Act 1997. You can also report them to the Office of Fair Trading under Section 40 of the Administration of Justice Act 1970. Put this in writing.

Tell your friends you’re cutting back

Telling your friends about debts can be very hard, but it needn’t be. Most people have debts, and most have more than they let on. But if admitting debts is a step too far, you can still at least say that you need to cut right back on your entertainment budget. You can use any excuse: redundancy concerns, an unexpected bill, saving for a deposit on a house (or another house) or that you want to be able to save money to take advantage of low share prices.

Contact your creditors immediately

Always call your creditors before things go wrong, and before they contact you. If you promise to call them, call them on time, even if you have to tell them that you can’t afford to pay what you thought

Always attend court hearings

Remember that the law is there to protect you as well as your creditors. If you can’t afford to pay more than $1 per month then no judge will make you do so. You must be able to live, and you must be able to have some money for a little fun, too. Even judges recognize this!

Be totally truthful at all times

Always say what you really can afford. Don’t exaggerate or understate. It is in your interests to tell the truth to your creditors and to the court.

Millions of solutions to debt

There are an unbelievably high number of solutions to dealing with debt, but all most people think of is to consolidate, which is often a poor choice for them. If you’re unable to reduce your debts each month, you should seek help on the millions of ways to tackle your debts, and get a plan that is tailored specifically for you.

Let’s take a look at how we have ended up so heavily in debt as a nation of consumers.

Easy credit

In the past, it was simply too easy for consumers to obtain credit.  Because credit was so easy to get, consumers figured out how to leverage their credit card rewards and balance transfer cards in order to make money. Many tried to perform credit card arbitrage by taking out cash advances and balance transfers from these cards, then investing the amounts into a rising stock market. This was one of those things you’d consider to be a “sign of the times.” Of course, things are different today, but the 2000s was a decade during which our debt ballooned due to these types of products. Subprime loans, jumbo mortgages and other forms of costly debt are inventions of our capitalistic society; these are high-risk financial tools which countless consumers have gambled with, often with dire results.

Need for instant gratification

As a society, we’re impatient. It’s ingrained in us to be able to get immediate access to the things we covet, even if we can’t really afford these things at the moment. We live in a highly consumerist society that encourages materialism and is not ashamed of excess. Have you seen just how huge the portions are served in most American restaurants? It’s all about more, more, more right now! So it’s often the case that funds that should wisely be funneled into highest interest savings account or into high yield savings are instead being used to keep up with the Joneses, a syndrome that many of us harbor, and which has caused many a household to fall into debt.

Lack of financial education

Personal finance isn’t given importance in schools. A lot of us don’t learn about finance while in school and instead are picking it up through experience and trial and error. Unfortunately, this lack of understanding and awareness about money management can make us vulnerable to making many financial mistakes, particularly those that land us in debt.

Lack of accountability

It’s too easy to procrastinate about our finances, go in denial or sweep things under the rug when we get into trouble. But also detrimental is when we can’t take responsibility for our own actions and mistakes. We blame the government or the financial industry for causing the rifts in our economy, but we’re just as guilty about causing the crisis as they are. Both lenders and borrowers contributed to the subprime lending boom, subsequent bust and credit crisis, but guess who’s getting the lion’s share of the blame?

Debt as a cultural phenomenon

In other cultures, debt is heavily frowned upon and is only gingerly used by households. But in America, debt is socially acceptable and ingrained in our culture; it carries no stigma. If bankruptcy, foreclosure, debt and being broke are things we easily accept in our culture and way of life, then these aren’t things we’d readily condemn (or worry about) until too late or until we’re forced to face the painful consequences.

When the economy blew up last year, it prompted the government to start making some changes; they’ve since introduced policies that help regulate the financial industry to some degree (e.g. credit card rules) but in many respects, it’s still pretty much “business as usual.” Instead of worrying about what the Fed or Obama is going to do next, we should focus on the things we have control over, and take responsibility for our own financial predicaments.

Before a new law of reforms becomes effective in February of 2010, Credit card companies are raising interest rates, penalties and fees. As of July, interest rates spiked an average of 20% across the board from December 2008 with some issuers raising the interest rates 30 and even 50 percent. When the Pew Health Group examined credit cards offered by the twelve largest banks, they found :

99.7 percent of bank cards allowed the issuer to raise interest rates on outstanding balances by changing the account agreement unilaterally – up from 93 percent in December 2008.

95 percent of bank cards allowed issuers to apply payments in a manner that the Federal Reserve found likely to cause substantial monetary injury to consumers.

90 percent of bank cards had penalty interest rates that could be triggered by late payments or overlimit transactions. All but 10 percent of these cards had penalty repricing terms that would qualify as “hair trigger” under Federal Reserve guidelines – triggers of one or two late payments in 12 months

99 percent of bank cards included a late fee – median $39.

80 percent of bank cards included an overlimit fee – median $39.

The median bank penalty interest rate was 28.99 percent. Most – 90 percent – penalty rate increases could continue indefinitely even if the cardholder resumes.

The first payment-based debt for the average American gets incurred while still in high school.

Interest rates on department store cards can be as staggering as 33%.

Target is in the top 10 issuers of credit cards.

Over 173 Million Americans own at least one credit card.

The average rate for standard bank credit cards is around 19%

Only 2% of undergrads have no credit history

The average undergrad has $3,200 in credit card debt.

84% of college students have credit cards.

Med School graduates leave school with an average of $113K in debt.

Doctoral students amass another $29,000

On average, master’s degree students take on an additional $17,000 in student loans.

Half of all college graduates 4 or more credit cards

The average graduate student has $8,600 owing on his/her credit cards.

¾ of American households have multiple credit cards.

The average student amasses over $20,000 in student debt toward his/her first degree.

The average auto loan is $30,738, a 40% rise in the last 10 years.

Most auto loans are over 6 years in length.

This is double the loan term of a typical auto loan 25 years ago.

The average auto loan interest rate varies between 7% and 9%.

The average home mortgage costs around $240,000.

After 30 years of making payments, a homeowner with a $240,000 mortgage loan will have paid over $580,000 on his/her house.

Two-thirds of all American households own 2 or more automobiles.

Most Americans use loans to finance every vehicle they drive.

By age 60, the average American has 5 or more credit cards.

The average household in America with credit card debt is $10,637.

The median credit limit on family credit cards in America is $18,000.

Refinancing a mortgage is often an attempt to consolidate overwhelming debt from a variety of sources.

On average, about half of refinances result in a higher overall loan amount.

The average American has a total of 13 credit obligations right now.

Over a lifetime, the average American will pay over 600,000 in interest.

You pay your credit card off every month, but happened to miss an auto loan or an electric bill payment.  A single late payment on your credit report can trigger a rate increase.  It is called Universal Default.

0% APR is great, but if you miss a payment, it can revert to a default APR of up to 35%.  There is no going back to 0% after that.

Even when you think you made a payment on your due date, the deadline might be in the morning or afternoon, payments made by 2pm on the due date may still be considered late.

The highest fixed late fee charge is currently $39 but percentage based late fees can cost hundreds of dollars per charge depending on the balance.

Variable rates can change without notice, and even fixed rates can change with 15 days notice.  Your rates and fees can be changed for any reason at any time.

Two cycle billing will ensure your finance charges are much higher if you don’t pay your bill in full every month.

Out of the country?  Be prepared to add a 1%-3% fee to all purchases in addition to a 1% exchange rate fee.

Taking our a cash advance?  Be prepared for a high APR as well as a percentage fee.  Payments made will apply to the lowest APR first.  You will have to pay off the entire balance before paying off the high APR cash advance.

Low minimum payments may sound like a convenience, but the lower the payment, the longer you will have to pay, finance charges piling up every month.

If you transfer a balance to a new card, the limit on the new card may be changed so it’s actually lower than the balance transfer.  This results in a new card that is already maxed out.  The first time you use it, you go over your limit and fees are charged.

Once your credit starts turning south, you will get offers for cards with starting fees.  A card with a $300 limit may come loaded with a Program Fee of $96, an Annual Fee of $48, an account Set-up fee of $56, and a monthly Participation Fee of $8, but charged annualized at $96.  All of a sudden your $300 card has $296 already charged on it.  If you make a purchase over $4 you will be hit with a late fee and possible rate change.

So you have cut up your cards, great, but be prepared to be hit with an inactivity fee.

Now you are up to your eyeballs in debt.  Your cards are maxed out, the APRs are high, and the only new credit you can get is tiny and expensive!

A Lifetime of Debt .

The total liabilities of the United States government, including future social security and medicare payments that the U.S. government is already committed to pay out, now exceed 65 trillion dollars, which is more than the entire GDP of the whole world.

According to the 2008 Financial Report of the United States Government, an official United States government report, the U.S. actually had a budget deficit of 5.1 trillion dollars in 2008.

So why did the Congressional Budget Office report that the federal budget deficit was only 455 billion dollars (which is certainly a total disaster) in 2008?

The difference lies in accounting. The CBO’s figures are based on cash accounting, while the 2008 Financial Report of the United States Government is based on GAAP accounting. GAAP accounting is what is used by all the major firms on Wall Street and it is regarded as a much more accurate reflection of financial reality.

So why is there such a big difference?

Well, what the Congressional Budget Office does is some really bad accounting. When you pay social security taxes, the federal government takes that money and instead of putting it away to pay your social security benefits in the future, it takes that money and spends it however it wants.

So what about the future social security and medicare benefits that the government owes you?

There is no money there for those payments.

The government is using that money right now to make the budget look better.

That’s right, you have been conned.

And as bad as the numbers from 2008 look, they do not reflect any significant money from the monstrous financial bailouts that Congress has passed.

So 2009 is going to look MUCH worse.

Pretty picture, eh?

The reality is the the United States of America is a total financial disaster.

Already, 13 banks have already failed in 2009. All of the bailouts certainly don’t seem to be helping much yet.

But that doesn’t mean that the federal government is going to give up trying to help. It seems a new “bailout” or a new “stimulus” is being passed almost weekly now.

Instead of accepting the fact that we must adopt a lower standard of living and deal with the reality of our massive debt, the politicians are trying to crank up the debt spiral one more time.

All of this government spending will help the economy in the short term, but it will make the long term problems of the U.S. government far worse.

Who is going to buy all of this new government debt? China has doubts about who is going to buy all of America’s new debt. The reality is that the only way that the government can “bailout” anyone or pay for any “stimulus” bill is to borrow.

America borrows and borrows and borrows.

If your personal finances were like that, how do you think it would end?

Ah, you are starting to get the picture…..

The “American Dream” is becoming the “American Nightmare” and the politicians don’t have a clue.

What are you going to do when the economy collapses and everything you ever worked for starts coming apart?

It’s time for all of us to start thinking about what is truly important…..

Here’s a statistic that should give us all pause: The average credit card debt of seniors grew by 26% between 2005 and 2008, CreditCards.com reports. For the rest of us, the increase was a comparatively modest 3%.

Also, according to a study released in July 2009 by New York City-based Demos, a public policy group, consumers 65 and older carried $10,235 in average card debt last year. That is a lot.

that’s very troubling now that so many retirees are living on Social Security and no other savings, and face medical expenses despite government-run Medicare. The dreaded “doughnut hole” is just a drop in the bucket compared with the other potential health care-related demands on their money.

Many older folks are stretched thin. That’s true in better times, but now, because retirement savings for lots of people have shrunk, they’re turning to credit.

Medical expenses are a burden. The Demos study says, “Older households, those 65 and over, reported the highest amount of credit card debt due to medical expenses: $3,988.”
They’re victimized. Consider how vulnerable people who didn’t grow up in the computer age are to phishing and other forms of identity theft. Scammers love seniors. And then there’s all the “free” stuff that’s advertised as a way for unscrupulous companies to start billing your credit card.
What to do? Be on the lookout for signs that seniors you know are struggling. Yes, this is difficult. If you don’t have a close relationship that allows discussion of such things, you’re going to have to be very observant.

Are your parents suddenly living beyond their means?
Are their bills piling up on the kitchen table — unopened?
Are they using a credit card to purchase things they used to pay for with cash, like groceries?
How to proceed? If you can have a frank, respectful discussion, do so. If the topic would be unwelcome, enlist help from other family members or friends.

Excessive spending - With easy availability of credit over the past decade, the spending habits of Americans have skyrocketed. The old days of paying for something with cash are long gone and we now live in a society that borrows money to buy goods and services.

Medical Bills - My father always said that if you have your health then you have everything and that statement is more true today than ever. As unexpected medical expenses arise, people tend to shift their priorities from spending money on household necessities to health care. Late payments begin to accumulate and before you know it you’re receiving collection calls.

Your growing family - As you build your family, expenses don’t always correspond with your salary. As take home pay for Americans is stretched to accommodate more family members, many are forced to borrow to keep afloat.

Unemployment - We are in the biggest economic downturn since the Great Depression and unemployment is wreaking havoc on families. The lack of gainful employment is having a direct impact on people’s ability to pay their bills, forcing many families to go further into debt.

The unexpected - No one can ever plan for every contingency in life. While it is advisable to have at least 6 – 12 months of your current expenses in a liquid savings account, in today’s economy you might need an additional 6 or 9 months. It is not surprising that many Americans finance their unexpected or emergency expenses by borrowing.

To find out more about our debt services, call us toll free today at 888-833-8853 and find out how you can benefit from our debt settlement plan.