Debt free life and how to manage it

Someone has said it right that debts are toxic. They should be eliminated from our lives. Leading a debt free life seems to be a far cry these days and there are very few American households living without debts. The aftermath of sub prime mortgage crisis is not new to us and we are still waiting for the stock markets to turn around. There has been a change in investor sentiment; the credit card issuers have changed their payment policies and the lenders have also taken a different stand as far as lending is concerned. Credit crunch has made lending more stringent. Lenders are being very selective in accepting loan requests.

If you are in a debt trap and wondering how to become debt free, there are a number of debt relief options that should lessen your debt burden. Debt consolidation is an option that majority of the debt help firms offer. If you are hiring the services of a debt consolidation agency, they do all the talking with your creditors. The debt consolidation agency requests creditors to lower your interest rate. And if your interest rate is lowered, your monthly payments get lowered too. You are also able to make payments as per a new repayment schedule. It enables you to manage your debts more effectively and consequently your finances.

You can also take a debt consolidation loan but it is better not to do so. The main reason is it only adds to your existing debts. It is better to reorganize your current debts and manage them instead. While choosing a debt consolidation agency, make sure that the firm is accredited by BBB or Better Business Bureau. Reports (as of March 27, 2009) suggest that the BBB is receiving more complaints related to 3 party debt counselors. So, before you hire services of a debt consolidation or debt help company, don’t forget to do your bit of homework.

Read more...

Global financial crises and its effects

Global financial crises is effecting the people all around the world and common people who have a limited budget to live are more worried because they can't save any money for future of emergency needs.

According to a report from 'Global issues' it says:

'The global financial crisis, brewing for a while, really started to show its effects in the middle of 2007 and into 2008. Around the world stock markets have fallen, large financial institutions have collapsed or been bought out, and governments in even the wealthiest nations have had to come up with rescue packages to bail out their financial systems.

On the one hand many people are concerned that those responsible for the financial problems are the ones being bailed out, while on the other hand, a global financial meltdown will affect the livelihoods of almost everyone in an increasingly inter-connected world.'

Global financial crises is effecting UK citizens as well!

The most prudent and cautious UK citizens have been affected by the global financial collapse, primarily due to falls in property prices. The March 2009 Halifax House Price Index showed that the average UK property now stands at £157,326. House prices are officially 17.5 per cent lower than they were just 12 months earlier and have returned to the level that they stood at in May 2004.

The Financial Services Authority (FSA) recently stated that if property prices fell by 30 per cent from their 2007 high, over 2 million people would fall into negative equity. They also believe that half a million buy-to-let mortgage holders would face negative equity. According to the latest housing market report by Capital Economics, it is believed that property prices will fall by a further 20 per cent during 2009. If this pessimistic scenario was to become a reality, the FSA's worst-case scenario will easily have been exceeded.

More at: Global Crisis hits UK families

Related posts:

* Why the Global Financial System is About to Collapse

* Global Financial Crisis

Read more...

Pawnbroking is on rise due to financial crises

Pawnbroking is on rise with struggling families as a result of financial crises. Let's learn about the definition of the term and some useful information about it.

According to definition of wikipedia: A pawnbroker (or pawnshop) is an individual or business that offers monetary loans in exchange for an item of value that is given to the pawn broker.

Few words about 'pawnbroking': Business of advancing loans to customers who have pledged household goods or personal effects as security on the loans. The trade of the pawnbroker is one of the oldest known to humanity; it existed in China 2,000 to 3,000 years ago. Ancient Greece and Rome were familiar with its operation; they laid the legal foundations on which modern statutory regulation was built.

With seven million people in the UK (having no access to bank or building society credit), pawnbroking is the fastest-growing part of the finance industry.

In a post at 'Debt free direct' 'Struggling families turn to Pawnbrokers' it describes some facts and figures for 'why people turn to pawnbrokers':

In the last 6 months of 2008, pawnbrokers Albemarle and Bond’s profits have increased from £24.9 million to £26.5 million.

There are no best-buy loans available at 7.9% per annum. Most pawnbrokers charge 3-5% APR per month on their loans. This is considerably cheaper than unsecured Payday loans where the figure is nearer 20% per month.

According to the National Pawnbrokers Association, approximately 88% of pledged goods are redeemed by their owners. Given the rate of interest and the fact that pawnbrokers are dealing with bad credit customers, redemption levels are good

More facts and useful posts/links:

* Pawnbroking on the rise

* National Pawnbrokers Associations

Read more...

Lean about Bankruptcy and alternatives of it

When debt problems take severe turn and you feel like digging under debts, then you need some advice or helping hand to tackle the situation. Because in some cases it can lead up to bankruptcy and loosing your own home which is happening to many home owners in this critical financial situation. This article would help you learn more about bankruptcy and its alternatives, so that you can be mentally prepared for the worst situation and have patience to get advice or suggestion from the professionals.

According to 'Debt free direct' "bankruptcy" means your assets are sold off and the money used to pay people you owe money to. Assets could include life insurance and pensions. You would probably have to sell your house.

You can think if there are any alternates of bankruptcy. Yes there are but it is better to get advice or suggestion from your other family members, friends or consultants who have a good knowledge of the finance or money topics.

What are the alternatives to Bankruptcy?

- An IVA or Individual Voluntary Arrangement - where a formal and legally binding agreement is created and managed by an Insolvency Practitioner that outlines what amount you can afford to pay back to people you owe money to and over what period. If accepted by people you owe money to, you'll be looking at paying a much smaller total amount of debt off over what is normally 5 years.

- Debt Management Plans - where through an informal arrangement between you and people you owe money to, you pay back the whole debt over an agreed period of time.

- Re-mortgaging - 'borrowing against the equity in your property to pay back your debt'.
- consolidation loans 'is a loan that is taken out to pay back your other debts'.

These are alternative to Bankruptcy. After consulting a debt adviser you can choose any of the option.

Debt Free Direct are the UK's leading debt help company and are the UK's largest IVA provider. Our advice is based on our ˜best advice model' and does not favour any one solution, and is based purely on what is debt solution is best for you and most likely to help you become debt free.


'Debt Free Direct' Helps people to overcome debt problems. You can get free best advice by calling to them. Their aim is to suggest effective debt solutions using sophisticated Best Advice Model (BAM) - BAM quickly and accurately analysis the information on each person's situation and recommends the most appropriate, least drastic solution for them.

Related post:

- Debt management solutions and "IVA vs. Bankruptcy"

- Learn Bankruptcy Facts & How They Affect You

Read more...

Debt management solutions and "IVA vs. Bankruptcy"

When your debts are very serious then you are mentally prepared for the possibility of bankruptcy. At this condition there is an alternate of bankruptcy which is called "IVA" or Individual Voluntary Arrangement. This post would help you learn about this debt management system.

More about IVA

An IVA is an arrangement to settle debts within a fixed period of time normally 5 years. All interest is frozen and after the end of the arrangement, outstanding debt is written off. The arrangement is governed by the Insolvency Act of 1986.

It is only available in the UK. It's basically an alternative to bankruptcy - the major advantage being that people do not have to lose their home. It's eligible to UK residents so long as they are in regular employment, and have over £15,000 debt owed to three or more creditors. IT stands for Individual Voluntary Arrangement, and debtors commit (it's legally binding) to making an agreed payment over a period of time (usually five years). Providing the debtor sticks to the terms of their IVA and makes the payments, they have potential to wipe off the remainder of their debt.

IVA is a formal agreement between you and your creditors where you will come to an arrangement with people you owe money to, to make reduced payments towards the total amount of your debt in order to pay off a percentage of what you owe then generally after 5 years your debt is classed as settled. Due to its formal nature, an Individual Voluntary Arrangement - IVA has to be set up by a licensed professional called an Insolvency Practioner (IP)

Why use an IVA?
Besides overcoming the problems outlined in Why avoid other Debt Solutions? An IVA offers a real solution, a “Light at the end of the Tunnel”, where informal debt solutions as described above do not.

* You have an agreement with your creditors to make a single reduced payment each month.
* It lasts for a sensible period of time (normally 5 years).
* Once agreed, creditors are not allowed to add further interest or charges to your accounts by law.
* The agreement is fixed, meaning that creditors cannot randomly demand changes to it.

Its Purpose?
It is a legally binding agreement between you and your creditors (people you owe money to). It helps those in financial difficulties to make a formal proposal to settle their debt.

What Are The Arrangements?
Monthly payments are based on an affordable disposable income. Once the final payment is made, any outstanding debt is legally written off. The arrangement can write off up to 65% of your debts (subject to your circumstances).

How does it work?
Debts are settled within a reasonable and fixed period of time (normally 5 years). Any interest and debt charges will be frozen and creditors will be prohibited from demanding additional payments.

Once a decision has been made that an Individual Voluntary Arrangement - IVA is right for you, you will be asked questions regarding your current financial situation. Based on the information you have given, a repayment amount will be agreed with you. Once proposals have been drawn up you will need to check and sign these and return them to your Insolvency Practitioner (IP).

An application may then be made to the court for an Interim Order. Once this is in place, no creditors will be able to take legal action against you. You may be asked to attend your creditors meeting but this rarely happens, normally you are asked to be contactable by phone on the day.

For an Individual Voluntary Arrangement - IVA to be approved, creditors will be called upon to vote either for or against the arrangement. If only one creditor votes "for" the Individual Voluntary Arrangement - IVA, the Individual Voluntary Arrangement - IVA will be approved. However, if only one creditor votes against the Individual Voluntary Arrangement - IVA and they represent less than 25% of your total debt, the meeting will be suspended for a later date and other creditors who did not vote will be called upon for their vote.

If the creditor who voted against the Individual Voluntary Arrangement - IVA represents more than 25% of the total debt you owe the Individual Voluntary Arrangement - IVA will fail. This is because an Individual Voluntary Arrangement - IVA will only ever be approved if 75% in monetary value is voted for. If any of the creditors don't vote, it is assumed that they will vote FOR the Individual Voluntary Arrangement - IVA.

To read more:
Individual Voluntary Arrangement

Useful studies:
* LOANS AND IVA DEBT MANAGEMENT

* Debt Management IVA: Eliminating Debts the Easy Way

Read more...

How to be debt free during current economic crisis

The current economy feels worse than any previous recessions. And it is now more difficult to stay debt free during current economic crises. People around the world are equally feeling that now its not safe with their jobs, banks or even business in terms of money or investment.

'Wikipedia' describes it a "global financial crises" and says further:

The global financial crisis of 2008–2009 is an ongoing major financial crisis. It became prominently visible in September 2008 with the failure, merger, or conservatorship of several large United States-based financial firms. The underlying causes leading to the crisis had been reported in business journals for many months before September, with commentary about the financial stability of leading U.S. and European investment banks, insurance firms and mortgage banks consequent to the subprime mortgage crisis.

Beginning with failures of large financial institutions in the United States, it rapidly evolved into a global credit crisis, deflation and sharp reductions in shipping resulting in a number of European bank failures and declines in various stock indexes, and large reductions in the market value of equities (stock)[7] and commodities worldwide.

The crisis led to a liquidity problem and the de-leveraging of financial institutions especially in the United States and Europe, which further accelerated the liquidity crisis, and a decrease in international shipping and commerce. World political leaders and national ministers of finance and central bank directors have coordinated their efforts[14] to reduce fears but the crisis is ongoing and continues to change, evolving at the close of October into a currency crisis with investors transferring vast capital resources into stronger currencies such as the yen, the dollar and the Swiss franc, leading many emergent economies to seek aid from the International Monetary Fund. The crisis was triggered by the subprime mortgage crisis and is an acute phase of the financial crisis of 2007–2009.

Either you are a self employed person or a businessman current economical crises may effect you. There are increasing number of bankruptcy around us then few years ago.

The main cause of bankruptcy:

Companies are downsizing, rightsizing, and filing for bankruptcy. There is no such thing as job security. If you were downsized, you may have taken a job that paid substantially less than what you were paid when you took on the debt load that you have currently. The unemployment rate continues to get worse, and it does not account for those who have exhausted their unemployment and continue to be unable to find work. If you are unable to make up that money in a part-time or another full-time job because of family constraints, you will continue to get further behind.

Self employed persons rely on consumer spending to continue to be successful. As consumer spending falls, it creates an overall poor financial outlook for small businesses.

Current economic crisis is not effecting big names but common person who was interested in saving money and then investing it to a profitable industry is hesitating to step forward.

Related posts:

* Alternative views of the economic crisis

* At this year's World Economic Forum in Davos, top business and political leaders offered their analysis of what caused our current turmoil and presented ideas on how to put the global economy back together.

Read the full story: The World Ecnomic Crisis, What's Your Solution?

* This articles shows the reasons why people think that this is best time in history to make lot’s of money and become filthy rich

Read the full articles: How to Become Filthy Rich During Economic Crisis?

Read more...

Mortgage possession orders and effects on home owners

People around the world are facing the worst financial situation. As unemplyment rate is on hike, people are unable to pay the mortgage and as a result losing their homes. This article would help you know the statistics and related posts which are concerned to this topic.

Recent economical downfall has increased the rate of unemployment and with the effect of the global credit crunch on the markets, together with recent figures from the Ministry of Justice, which reported a 17% rise in mortgage possession claims from the second quarter of 2008 when compared with the same period last year, it is likely that an increasing number of clients will get into trouble with their repayments.

Ministry of Justice figures show that mortgage possession orders – made by judges in the county courts – were up by 24% in the third quarter of 2008, compared with the same period last year.

Debt free direct provides these figures in this regard:

The FSA reported a total of 13,161 homes were repossessed by lenders in the third quarter of 2008, as households across the UK continue to struggle with home loan repayments in this grim economic climate.

While the amount of mortgage possession claims issued has only risen by 9% since the third quarter of 2007, the amount of mortgage possessions ordered by County Courts continues to rise. Regionally, Wales was the hardest hit with a 38% increase since the third quarter of 2007, while the Midlands saw the lowest increase in England of 16%.

Some 36,923 landlord possession claims were made, with 28,086 orders granted in the third quarter of 2008. This figure has risen 4% since the same quarter last year and shows that it’s not just UK homeowners struggling with finances.

Council of Mortgage Lenders says:

What happens to your mortgage debt after your home is repossessed?

After your lender takes your property into possession they have a legal duty to sell the property for the best price that can reasonably be obtained. The property will generally go on the market as soon as possible and your lender will get independent, expert advice on the price it should be sold for and the best method of sale.

If the sale of the property results in a surplus after all the money owed to the lender and any other secured lender has been repaid, then this surplus is returned you. Your lender should notify you of the surplus but if you cannot be contacted, the money will either be held by the court or your lender until you can be contacted.

But if the sale proceeds are not enough to pay off the money you owe to the lender, then there is a "shortfall debt" which you still owe your lender after possession.

Interest will usually continue to be charged on your mortgage loan until the property is sold and any shortfall is repaid. There will also be other costs charged to your mortgage account, including estate agents' costs in selling the property and legal costs.

More related articles:

* New pre-action protocol for mortgage possession claims
From "Mortgage solutions" Nine tenths of the law-what happens behind the scenes and the timescales involved

* "Mortgage Introducer" says: Mortgage arrears up but repossession figures stable

Read more...

Credit card tips to get most from it

These simple but effective tips are suggested by 'Federal Reserve.gov' to get most from your plastics. I have seen many persons dealing very carefully with credit cards but they were unaware of the some important facts and secrets which we ignore usually and face the bad credit score.

Tips:

* Pay on time.
Paying your credit card account on time helps you avoid late fees as well as penalty interest rates applied to your account, and helps you maintain a good credit record. A good credit record leads to a higher credit score, which helps you qualify for lower interest rates. Know the date your payment is due. If your bill is due at an inconvenient time of the month--for example, if it's due on the 10th and you get paid on the 15th--contact your credit card company to see if they will change your billing cycle to fit your cash flow.

* Stay below your credit limit.
If you go over your credit limit on your card, your card issuer could charge a fee and increase your interest rate to a higher penalty rate. To avoid this, keep a record of your spending or check your balance online. Also, be aware that some merchants (for example, hotel and car rental companies) put a "hold" on your credit card based on their estimate of the amount you will charge. This can reduce your available credit until the final charge is processed.

* Avoid unnecessary fees.
Credit card companies not only charge late payment and over-the-limit fees, but also fees for cash advances, transferring balances, and having a payment returned. Some companies charge a fee when you pay your bill by phone. Pay attention to the transactions that trigger these fees. If you need a cash advance, withdraw enough so that you don't have to take a second cash advance--and incur a second fee--later in the month. Read your credit card agreement to learn more about the fees that your credit card company charges.

* Pay more than the minimum payment.
If you can't pay your balance in full each month, try to pay as much of the total as you can. Over time, you'll pay less in interest charges--money that you will be able to spend on other things, and you'll pay off your balance sooner.

* Watch for changes in the terms of your account.
Credit card companies can change the terms and conditions of your account. They will send you advance notices about changes in fees, interest rates, billing, and other features. By reading these "change in terms" notices, you can decide whether you want to change the way you use the card. For example, if cash advance fees increase, you may decide to use a different card for cash advances. If you have a card with a variable rate or if you have an introductory rate that is ending, be aware that credit card companies are not required to send you a notice about raising your interest rate. Interest rates are listed on your monthly bill. Read your bill carefully and take note of any changes.

Get Printable version (97 KB PDF(

Read more...

'Ask Mr Credit Card' - Helping you understand credit cards

As the money matters are all concerned with plastics or credit cards, we need to learn more about credit cards. Normally when we decide to select credit cards, we take suggestions from the people around us or simply follow the ads which are bombared on us every moment. The easiest way of getting credit card may be simply filling out a form that arrives in the mail. But what if you could rely on a source which can help and guide you in expert way for selecting your credit cards?

Ask Mr. Credit Card is a site helping you understand credit cards well. This site acts like a sincere friend who suggests you tips and advice regarding plastics/credit cards.

You get the reviews of many credit cards and editor's choice which is the best recommendation for the best available credit cards. If you have any question about credit cards, you can ask from the site owner.
Read the other person's views and comments about credit cards related issues at forum or become a member if you need to share your own experience with others.

Few popular article titles are:

Where to get a no annual fee Continental Airlines OnePass credit card?
Which Hilton Hhonors credit card to get? Visa or Amex?
Which Marriott Rewards Credit Card to get?

Check the blog fro latest posts.

'Tips and advice' page reveals many credit card facts which we didn't notice before.

Read more...