Debt Solutions

 Are you in financial despair?  This site is dedicated to helping you find solutions to getting out of debt and getting back to where you want to be financially. 

Not all debt is bad.  Good debt usually means purchasing on credit things that do not lose their value over time.  Going into debt for things that appreciate over time can be a very smart move.  When you do that, when you sell the asset you not only have enough money to cover the original purchase price, but also have additional money available to use on other things.  A home purchase in a buyer's market can fall into this category. 

Going into debt for education can also be a "good debt."  Waiting to go to college while you work to earn the money rather than taking out a student loan may seem like a good idea, but there are many factors to think about.  If going to college now allows you to get a higher-paying job sooner, that can outweigh the low-paying job you hold for a long time while you save up to go to college.

Bad debt is when you purchase on credit something that loses value over time.  Automobiles can fall into this category.  How many times have you heard that a new car loses 10% of its value the minute you drive it off the lot? Selling the vehicle at that point would not even give you enough money to pay off the remainder of the loan you got to buy the car in the first place.

Charging things on credit cards often results in bad debt.  It can be very enticing to sign up for a credit card with 0% interest for the first year.  If you do this and pay off the balance each month, you are ahead of the game and have not incurred interest on the items you have purchased and have begun to build a good credit score at the same time.  However, if you fail to pay off the balance each month, you may begin to incur finance charges, and chances are that you will continue to use the card after the first year when the interest rate skyrockets to 24% or more!

What are some solutions to getting out of debt once it has been incurred?  Since credit card debt is the most common type of debt, we will focus on that.  Debt consolidation is a great way to get out of the credit card debt trap.  A good financial manager can help you negotiate and work within the system to lower your payments and save you money.

Working with the credit card companies can help keep your credit untarnished as well as helping make your payments more affordable and manageable.  The alternative is to get nasty letters and phone calls from creditors who want to be paid what you owe them in full, right now. Consolidation not only helps lower the monthly payments and interest rates, but often shortens the amount of time required to become debt-free.

Consolidating often means closing accounts in order to consolidate them, and that can be a hard one-time hit on your credit.  However, once everything is consolidated and you are making the new payments, your credit score will continue to rise and before you know it will be right where you want it.  So why wait?  The sooner you consolidate and take that initial hit, the sooner your credit score will improve.

Finding the right credit counselor for you is very important.  You need to stop incurring new debt as you work to eliminate old debt. Discipline and consolidating debt are two main ways of being able to handle your finances wisely.  Working with an experienced debt counselor will help educate you on how to manage your debt as you move forward.

Therefore, if you are trying to solve your debt problems, whether credit card debt or otherwise, a good plan begins with finding a debt consolidation program through one of the many reputable credit counseling services available. Always check the reputation of the company you choose, and make sure they are honest and up front with you to begin with.