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Using
Help To Get Out of Debt
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How
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Using
Help To Get Out of Debt
Debt Help is the
stepping stone to debt elimination and financial
recovery. Debt help analysis guides you to save
thousands of dollars in interest charges.
Consolidation of your credit card debts and other
unsecured bills will allow you to get out of debt as
quickly as possible, save money on interest and late
fees, stop creditor harassment, save your good
credit rating or begin immediately to repair bad
credit or negatives on your credit report.
In a recent survey it was reported that almost 58%
clients vouched for Debt Management Plan as the best
way to settle their debts. Another 42% client had
filed bankruptcy since dropping off a Debt
Management Plan or DMP.
Debt Management plans can reduce your monthly
payments, interest charges, penalties and some times
even the repayment period. Even if bankruptcy seems
like your only solution, it may not be the right
debt help solution and may cost you for many years
to come. The loss of a job, divorce, credit card
spending and family medical emergencies among other
life style matters can cause negative money issues.
Statistics released by the administrative office of
U.S. Courts show that a total of 388,864 new
non-business bankruptcy filing in the United States
during the quarter, ended on September 30, 2004.
This included 274,196 chapter 7 filings and 114,454
chapter 13 filings.
Most economists consider a ratio of unsecured debt
to annual income of 40-50% percent or more, as being
a strong indicator to bankruptcy. This is taken as a
‘˜thumb rule’ in most of the cases. So in order to
protect himself from such crisis one should keep his
unsecured debt to annual income ratio lower than 40
to 50%. For example if someone has an annual income
of $5000, he should keep his annual debt minimum
$2000 to $2500 in order to avoid his bankruptcy.
36% or less: This is a healthy debt load to carry
for most people.
37%-42%: Not bad, but starts to restructure your
debt now before you get into real trouble.
43%-49%: Financial difficulties are likely to occur
unless you take immediate action.
50% or more: Get professional help from debt
counselor to aggressively reduce debt.
You should also control from having a large amount
of unpaid outstanding credit or using more than 80%
of your available credit (which causes a high debt
to income ratio).
It is better to have a debt free life without having
a savings rather than maintaining debts along with
savings. The reason is simple. As the return on
short term investment i.e. savings is lower than the
interest payable on accumulated debt, it is always
advisable to pay the debt first rather than go for
the short term investment. Because a repayment of
single debt instantaneously may save a lot of money
in future. In other word, One dollar payment is
better than one dollar saving.
From the Consumer Debt so published by Federal
Reserve Statistical Release, it is found that each
and every year total consumer debt (both revolving
and non-revolving) has an increasing trend. In 2000
and 2001, total consumer debt has a rising trend by
11.42% and 8.04% with respect to the year 1999.
However, in 2002 and 2003, total consumer debt
increased to 4.45% and 4.52% respectively, at a
decreasing rate with respect to just previous year’s
total consumer debt. As there is no specific trend
in total consumer debt we may conclude that in 2005
also, the total consumer debt will have an
increasing trend of 4.49% which signifies that at
the end of 2005 total consumer debt will reach about
$2109.85 Billion.
For better insight in this topic please view:
http://www.debtconsolidationcare.com/getoutofdebt.html
http://www.debtconsolidationcare.com/debt-solution.html
http://www.debtconsolidationcare.com/debt-free.html
http://www.debtconsolidationcare.com/help.html
About the Author
Janet Williams is a
contributing
Writer to
http://www.debtconsolidationcare.com/
And is currently working on a special section in the
site called do it yourself where you can eliminate
your debts and become debt free...
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