How To Get Rid Of Debt Problems Step 3 -- How To Negotiate Reduced Payments With Creditors
First, make a list of your creditors (NOTE: you should only attempt to re-negotiatepayments on your UNSECURED debts if you wish to avoid the riskthat an item upon which a debt is secured could be re-possessed)
Add to this list the outstanding balance owed to each creditor.It is essential that you are accurate with this balance. Youshould find the balance on the most recent statement from eachcreditor on your list. If you cannot find a balance figure, callthe creditor or write and ask for a current outstanding balance.Only when you have an accurate outstanding balance for eachcreditor on your list can you proceed to the next step.
From your financial statement (prepared in the last of thisseries), subtract the total of your outgoings from the total ofyour income. The resulting figure is your disposable income.
You need to divide the disposable income figure amongst yourlist of creditors in proportion to the outstanding balance owedto each. This is why you need an accurate balance before youstart. Otherwise, your creditors will not accept your proposal.
When you have done this, write a letter to each creditor quotingyour name, address and account number, offering to pay theamount you have calculated for that creditor.
You will need to include a copy of your financial statement witheach letter, and you will need a valid explanation for yourhardship, which now prevents you from paying the full amountagreed initially.
It is not difficult to see that the success of your proposalwill depend on how well you have put together your financialstatement. The amounts you have claimed for each item ofexpenditure will need to be acceptable to your creditors.Unfortunately, there is no hard and fast rule I can give you forthis. it is entirely dependent on the combination of yourcircumstances, which is unique for everybody.
If one or more of your creditors rejects your proposal, theywill probably indicate why. It will then be necessary to re-jigyour financial statement and re-send it to all creditors with anew letter. Certainly this can be time-consuming and tedious butthere is no easy answer to this.
Rob Hawkins is the owner of Debt Consolidation UK. His company Chiltern Debt Management UK has helped more than 50,000 people to get rid of debt problems, and won the coveted 'Debt Counsellor of the Year 2004' award.
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When someone is extremely deep in debt, and he or she has no other options to prevent bankruptcy, debt consolidation can be his or her savior. Debt consolidation can also be a very wise choice for someone who has many debts on high interest credit cards. Debt consolidation, quite simply, is the process of taking loans and debts and bringing them into one low-interest loan that can be paid off over varying periods. This is a very good choice for many people because it saves them from having to file bankruptcy. Debt consolidation merely requires collateral (such as a home or vehicle) for the interest rates to be lowered and the customer to be on his or her way to debt free living.
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Debt Consolidation Service In Birmingham
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Student Loan Consolidation
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How To Get Rid Of Debt Problems Step 2 -- How To Prepare A Financial Statement
Here is how to prepare a financial statement, for the purpose ofnegotiating reduced payments with your creditors.
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Credit Card Blues
For the average American family, debt, and especially credit card debt is spiraling out of control at a record pace. The average household credit card debt has risen dramatically from $3000 in 1990 to over $8000 today. Personal bankruptcies are also at an all time high, prompting Congress to consider a radical bankruptcy law overhaul, designed to weed out those who are merely taking advantage of the system loopholes while directing many to more palliative alternatives such as a debt management program.
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What You Need to Know About Debt Consolidation
Debt consolidation is often a last resort for people who are in extreme debt and trying to avoid bankruptcy. Many people who are not in danger of bankruptcy, but have debt on high interest credit cards may also choose to consolidate their debt. Debt consolidation is defined as the process of organizing loans and debts into one low-interest loan that can be paid off regularly. Consolidating debt can help someone avoid bankruptcy, and help them manage their money more wisely. Debt consolidation is also convenient because it becomes easier to keep track of debt and one is only required to pay off one loan rather than several debts. In order to consolidate one's debt, collateral must be given. The collateral is usually the home, or a vehicle.
Private Student Loans ? Dispelling The Myths
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For millions of homeowners, refinancing is the perfect way to consolidate debts. You can consolidate your debts, eliminate outrageous interest rates and fees, and make one low monthly payment. Credit cards, medical bills, and unsecured loans can all be combined into one monthly payment when you apply for a debt consolidation refinance loan. The time has never been better to apply due to the current low interest rates being offered by mortgage lenders. Information and quotes are free and you can apply to several lenders with one simple online application.
The Pros and Cons of Debt Consolidation Loans
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