Relief Debt Systems

As they focus on repaying their debts, are Britain`s `Scrooges` slowing the economic recovery by spending less in the shops? It`s a question asked by businessweek.com, among others. `For years,` the article states, `economists have felt that British consumers – who have the world`s highest debt levels relative to discretionary income (more than one-third higher than Americans`) – should rein in spending.` Today, it seems this is happening. Figures from the Bank of England reveal that individuals` collective debt actually fell in July, for the first time since records began in 1993. Overall debt levels fell by 600 million, made up of 400 million of secured debt and 200 million of unsecured debt. However, while this focus on paying off debt is good for individuals` financial health, it can be bad for the economy as a whole. It`s something the Bank of England refers to in its Quarterly Bulletin (Q3 2009): `Any adjustment in saving is likely to have important consequences for the economic outlook, given the importance of household spending within aggregate demand. Read more…

Figures from the FLA (Finance & Leasing Association) have revealed that the amount of debt consumers are taking on has decreased.

However, although it`s `down by almost 11 billion on last year`, the consumer credit market does seem to have stabilised.

The data showed that in the 12 months to July 2009, `new business written by FLA members` (including secured and unsecured loans, credit and store cards and motor finance) fell by 17%.

In particular, the figures highlighted the fact that the `lack of affordable wholesale credit` has made it very hard for people to secure debt against their home, with lending in this area down 83% in the last three-month period alone.

A spokesperson for Debt Advisers Direct commented: “It is encouraging to see that people are taking on less debt. Still, it`s important to recognise that credit can be extremely useful – when used wisely, it can allow people to do things they wouldn`t normally be able to.

“Many people, however, find that their debt has become unmanageable. Read more…

If you are behind in payments and the debt collectors are beginning to call, you might want to educate yourself on what actions bill collectors legally can and cannot perform. Before outlining the do’s and don’ts, it is important to recognize most debts expire at some period of time. Check your state’s statute of limitation for details specific to you.

In addition to your state’s debt collection laws, there is a federal act that protects consumers from harassment and unfair practices. The Fair Debt Collection Practices Act (FDCPA) outlines the rules bill collectors and collection attorneys must follow when attempting to recover debt. Rules from the act you should know:

Harassment is not allowed. Bill collectors can be very persistent. At some point, you may wonder if their persistency has become harassment. According to the FDCPA, bill collectors can not threaten you or a third party such as a family member or friend with violence or harm. Obscene or profane language is illegal as is repeatedly using the telephone for the purpose of annoying you.  Collectors also cannot embarrass you by publishing a list of those who owe money. Making f Read more…

Finding out which is the best debt management company is really about finding the best company for your particular situation.  There is no single company that is right for everyone.  The important things are to make sure you take steps to narrow your search to only a few companies that you know to be excellent, and then approach a few of them and make your final judgement based on what they offer you and how you feel about the people you have dealt with.

It is imperative to steer well clear of any of the less reputable companies, those who are simply not very good, or even those who are just too new for you to assess properly.  The easiest way to come up with an initial shortlist of companies you can trust is to follow recommendations or reviews for the best debt management companies, in terms of how well established they are, the number of people they have already helped and how reliable and responsible they are in terms of the advice they give.

Before you start approaching a debt management company, it will help you to have a good awareness of what you should expecting from them.  If you understand what it is that a debt management company can do for you, you will be better equipped to make your decision about which one to use.

The principle service provided by debt management companies is the setting up of debt management plans to help people pay off their debts.  This process is sometimes referred to as debt consolidation, though that is a term that can also be used to include taking out a new loan to pay off old debts.  You need to be clear that a debt management plan does not involve any borrowing of money.

Debt management plans are not appropriate for all situations, so for a debt management company to help you, there are a few basic criteria that you need to meet.  Firstly, the debts that you can consolidate into a payment plan have to be unsecured debts and they have to be to more than one creditor.  This is fine for most people because unsecured debts include things like credit cards and personal loans.  What it does not include is any home equity loan or mortgage, as these are secured debts.

The other main requirement is that you have a steady income and enough money spare each month to afford the payment on the plan.  Apart from that, you will only be able to deal with a debt management company that are based in your country of residence.  If you are in the UK, for example, there is no point applying to a company operating from the US, so make sure you check this before you apply.

When you sign up for a payment plan with a company, they will approach all of your creditors and rearrange the agreements for paying back your debts.  The aim of this is to change the terms under which you repay what you owe in order to make it possible for your total monthly outgoings on debts to be brought down to an amount that you can afford.  These negotiations usually involve getting reductions in interest charges and other costs.  Your debts should stop getting any larger from this point on.  What you end up with after this process is a single payment that you have to make each month to the debt management company.

Now that you understand what you will get from a debt management company, you should follow recommendations for some of the most reputable companies, and apply to perhaps three of these.  Applying can be done easily online and puts you under no obligation to take the process any further.  They will need to contact you to go through your situation, which will give you an opportunity to assess how you feel about the debt advisors you deal with.

If you’re considering filing bankruptcy, there are some things to consider before doing so. Planning ahead can help in avoiding “surprises.” Bankruptcy provides a legal way to gain shelter from insurmountable debt, but it does not protect you from paying debts secured by real property or merchandise, such as your home or car. Here’s more information about how bankruptcy works and what you should know before filing.

Which bankruptcy option best suits your situation? There are two types of personal bankruptcy, Chapter 7 and Chapter 13. Chapter 7 “wipes out” most unsecured debt and is typically filed by those who are unemployed or otherwise have no hope of repaying their debts. Chapter 13 bankruptcy allows those with steady income to restructure their debt and repay it within three to five years. This option can work for those who have returned to work after a long period of unemployment, or who have experienced a reduction of income. Consulting a bankruptcy attorney before filing can help in determining which option matches your needs. Bankruptcy st

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If the sluggish economy has taken a bite out of your financial security you may be seeking debt consolidation information. During the times of easy credit many of us made the mistake of getting in over our head. We did not anticipate the financial crisis that hit our country, or the rising interest rates that credit card companies are now charging. We planned our small business budgets around a rosy future not the one we are now facing.

Many individuals and businesses are suffering financially from all that has taken place in recent months. No longer able to meet their monthly payments as before, they are starting to panic about what to do next and how to get out of the situation they have found themselves in. If you are one of these people, it is important to understand that it is not necessarily a reflection on your character or your ability to manage your finances.

Everyone makes mistakes and misjudgments with regard to money matters from time to time. But sometimes, the economic environment is more forgiving than others. Now is not one of those times.

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