Get Rid Of Debt - The Easy Way

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Is debt elimination on your mind
Debt elimination should be everyone's goal. But, it is not. Unfortunately, many people live day to day with large debts floating above their heads. Is there any way to get out? The answer is yes. What those who are in debt need to do, though, is to commit to a solution to in effect get them the debt elimination that all should be after. The priorities of debt elimination should begin wi... Read debt consolidation article



Debt consolidation - How to get out of debt
It is said that a pet tiger cub can become dangerous if it tastes blood. It will stop at killing no one, not even the people who brought it up. Similarly, once we get the taste of money and the freedom of purchasing through credit, we seem to know no bounds. What do we land up with? Heaps and heaps of debt. Most of us feel rich at the beginning of the month and end up feeling like worms... Read debt consolidation article



Get Rid Of Debt - The Easy Way
We have all experienced getting so far in debt we don't know how we're going to get out. There are many different options that you have for quick relief with benefits and consequences. You can look at the overview and see which option is the best option for you.

Consolidation

1. Benefits

Lower monthly payments
No worry of paying multiple debt collectors every month, pay only one agency
Percentage of debt charged by consolidation company
Costs for Loan
Cost for counseling or negotiation

2. Negatives

Appears on your credit like bankruptcy
Requires you to get another loan
If you own a home loan will be tied to your equity
Takes between 5 and 10 years to pay off the loan
First few years no big change in debt reduction
Does not always prevent creditors from future legal collection action

Bankruptcy

1. Benefits
Costs between $700-$3000
2. Negatives
On credit report for ten years
Finances made public record
No assets are allowed with Chapter7
Creditors can file adversarial hearing that costs $3000
Credit severely damaged
Debt Relief Program

1. Benefits

Payments can stop as soon as the program starts
Credit Repair available after a short time
Good credit repair options available

3. Negatives

Usually only credit card debt and unsecured signature loan

About The Author

Marcus Ware is the webmaster of www.waresbusiness.com and promotor of affiliate products. waresbus@waresbusiness.com

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Debt relief - A simple formula

Is there a way to get out of debt without getting a second job or having to increase your income in some way? Can the average person take his or her current income and pay off his or her bills in a matter of a few years, including the car and mortgage payments?

The answer is YES!!! You can do it without having to cut out all of your fun and extra-curricular activities as well. Now, you may need to cut down on going to the movies or going out to eat, but you will not have to stop altogether. It is a matter of putting together your plan and then sticking to your plan!

The process is fairly simple, most people just don't realize it. Anyone can get started right away, including YOU right now! Here is what you need to know:

1. What is your total net income?

2. What are your debts and minimum monthly payments? (Don't include any extra money you are paying towards any debt. You want only your minimum required monthly payments.)

Okay, are you ready to begin?

The first thing you need to do is take a percentage of your NET income (a good beginning point would be 5%) and write this amount down at the top of a blank sheet of paper.

Next, write down each of your debts (not including utility bills, insurance payments, property taxes, etc.) in a column at the left side of your page. Beside each debt, write down your total balance and then your minimum monthly payment.

Once you have all of these down, divide your total balance by the minimum monthly payment. Write this amount next to each debt. Taking the debt that has the shortest payoff number, number this number 1. Taking the next shortest payoff, number it number 2 and so on until each debt has a number next to it. These numbers indicate the order in which you will begin to pay off your bills.

Now, here is where your 5% comes into play. For debt number 1 take the minimum monthly payment and add it to the 5% figure. Divide the total balance by this new amount to get the total months it will take to payoff the debt. For debt number 2, you will take the minimum monthly payment plus the 5% plus the minimum monthly payment of debt number 1 (since it will be paid in full) and add them together. Again take the total balance and divide it by your new monthly payment to figure your total months to payoff. Do this with each debt until you are finished.

Once you have completed this, add up the total months to pay off your debts to figure an estimate of how long it will take you to pay off all of your debt.

Example:

Visa total balance $6300.00 divided by minimum monthly payment of $153.00 = 41 (months to payoff) 2 (second to payoff)

Auto Loan $13000.00 divided by minimum monthly payment of $356.00 = 36 (months to payoff) 1 (first to payoff)

Mastercard $5266.00 divided by $96.00 = 54 3 (third to payoff)

Mortgage $43,000.00 divided by $325.00 = 132 4 (fourth to payoff)

The auto loan is the first to payoff because it has the shortest amount of time before it is paid in full. Then your Visa balance and so on.

Net Income = $1500.00 x 5% = $75.00

Taking your first debt to payoff which is the auto loan:

minimum payment $356.00 + $75.00 = $431.00 total balance $13000 divided by $431 = 30 (months it will take you to payoff this balance using additional 5%)

Visa: $153.00 + $75.00 + 356.00 (since this loan amount is paid in full) = $584.00 total balance of $6300.00 divided by $584.00 = 11 (months it will take to payoff credit card)

Mastercard: $96.00 + $75.00 + 153.00 + $356.00 = $680.00 total balance $5266.00 divided by $680.00 = 8

Mortgage: $325.00 + $75.00 + 96.00 + 153.00 + 356.00 = $1005.00 total balance $43,000.00 divided by $1005.00 = 43

Add your months together: 30 + 11 + 8 + 43 = 92 approximate months to have all of your debt (including you home) PAID IN FULL! This is about eight years! Can you imagine being debt free in eight years???? That means that your home would be free and clear and you would have 100% equity!

If you apply the above formula to your financial situation, you can be debt free without getting a second job or without working extra overtime! Imagine the time you can spend with your family and friends instead of working. Of course if you take a higher percentage of your net income, you will pay off your debt faster!

This is something that anyone can do based on simple math. The trick to remember is to NOT use your credit cards. In fact, cut all but one up! Get rid of them and just keep one in case of a major emergency. Start yourself a savings account to begin building up your emergency funds. Eventually set goals for yourself to save for college funds, retirement funds, etc.

Remember this fundamental rule:

PAY FOR CURRENT EXPENSES WITH CURRENT INCOME

Carolyn Shipp

http://macarolyn.tripod.com/sbtips


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Get Rid Of Debt - The Easy Way
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