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First, keep it in perspective. Debt of any kind is not personal. Money, like your subconscious, is completely neutral. It is a matter of numbers and you want those numbers to be big in the plus column. Secondly, believe that You CAN overcome the negative numbers in your bank accounts and credit card balances. It begins with your mindset, first of all. Are you too frightened to even address it? Don't be. Third, please, please DON'T run and sign up with the first debt consolidation site you see. It can be a major mistake. Please read this, before you do.
Say, you are newly divorced and vulnerable and feeling desperately afraid of the financial world, don't buy into the dreamworld that a debt consolidator can make all your dreams come true. Read all you can before you sign anything with a debt consolidator.
You will see and hear on TV, the mail and on the internet the following phrases:
"WE WILL MAKE THE DEBT COLLECTORS STOP CALLING"
"WE CAN MAKE CREDIT GOOD AGAIN"
"DEBT RELIEF IS JUST A CLICK AWAY!"
"CUT YOUR MINIMUM MONTHLY PAYMENTS BY 50% OR MORE!"
"SLASH YOUR INTEREST RATES DOWN TO ZERO!"
These promises are incredibly tantalizing to someone who can't sleep at night wondering how they are going to meet the next month's bill, when they just had to have their nails done, and they just had to go out to eat, and they just had to buy that last Christmas present because it was 75% off, sound familiar? Or that HDTV sale was just too compelling...
First, what NOT to do: Don't run sign-up with a debt consolidator! This is what they will offer you:
Two dangerous offers:
1) The Hard-Money Loan
Debt-consolidation loans are not that easy to obtain. If you really need a loan, it could be because you have already missed a few payments and it is showing up on that know-it-all credit report.
If that is your problem then you are viewed as a credit risk and you will be enticed with a loan that ends up charging you a higher interest rate than you are already paying! Maybe even as high as 22% The sad, unbelieveable truth is that you probably wind up paying more than you are paying now in your current bills with their current interest rate. There is an old Latin term meaning: Buyer beware, beware of this!
2) An empty promise: Some debt consolidators promise to take care of all your problems and make all this debt nightmare go away. Don't believe it, or you could wind up in a bigger pit. They may even tell you that they will negotiate lower interests rates and lower your monthly payment and your only obligation would be one EASY payment to THEM.
What is the REAL TRUTH?
1. The real truth: The truth is that these debt angels build in a fee, THEIR fee, as part of your new monthly payment. But, you are so desperate and they may be so vague when you talk to them, this gets missed in the discussion. The fee can be as much as 10% of the payment, (example, $50 on a $500 monthly payment) or could be up to $15% of your monthly payment ($75 on a $500 monthly payment!)
2. This is what can happen:
They take your payment, pass it on to your creditor (whoever you may owe money to) and it is a win-win, they then can BOTH make money from you, the debt consolidation service AND your creditor. Your creditor is just happy at this point to receive any kind of payment on your behalf as they lose huge revenue each year from non-payment, bankruptcies, etc.
WHAT CAN YOU DO INSTEAD?
1. Take a moment from your panic, and think about this:
It is really and truly worth paying someone else for something that you can actually do on your own? You can pick up the phone and call your credit company (or whomever) and tell them that you would like to speak to a manager and lower your monthly interest rate. There is usually someone authorized to do so, don't hang up until you find that person. Ask for a supervisor. Don't be intimidated. Take polite, but firm action.
2. THEN, WHAT?
Then, WHEN you have negotiated a new, lower interest rate for yourself THEN pay off the highest interest bills FIRST.
This is the first step.
3. If you have a little money to invest, there is a wonderful guide. It has a guarantee that you can be debt-free in 3 to 5 years without filing for bankruptcy no matter how deeply in debt you are. This guy was $213,000 in debt. He has a success rate of 97%.
You can find more information on that at my website.
4. If you have absolutely no money, please feed yourself and your family first, and go to the site called National Foundation for Credit Counseling. They offer FREE counseling and low-cost budget counseling one-on-one.
5. Above all, SEEK some help. You deserve a better life than just making it through one more day. I don't believe God intended for you to live that way!
Category: Credit CardsIs Your Debt Eating Up Your Dreams? was written by:Author:Kristie ChilesAdded: Thu, 31 Jan 2008 10:51:14 -0500 This Article Has Been Read 208 times View all Kristie Chiles's articlesAbout the Author: More information on this article can be found at http://www.kchiles.info More articles by kchiles can be found at http://www.squidoo.com/lensmasters/kchiles |
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