Homeowners defaulted on their mortgage loans at a record rate of 7.58 percent during August 2009, while credit card delinquencies decreased. Homeowners missing mortgage payments risk losing their homes to foreclosure and long term credit problems resulting from filing bankruptcy. If you’re deeply in debt, and are juggling bills from month to month, credit counseling services can potentially offer debt help and debt consolidation through a negotiated repayment program. Here are some tips for debt management and getting debt help.
Getting Your Debts in a Row
Before you can find the help you need, you’ll want to determine exactly where you stand. This means it’s not OK to throw credit card bills away without opening them, or dodge phone calls from creditors. Before contacting credit counseling services, you’ll need to assemble some information:
Documentation for all sources of income: This may include copies of W-2 forms and tax returns from the prior year, bank statements, and direct deposit advice forms. Determine your monthly gross income (before deductions) by dividing annual gross income from all sources by 12. Write down your monthly gross income, and monthly totals for the following categories.
Calculate monthly living expenses: Write down how much you pay for groceries, health care, utilities, household items, pet care, clothing, grooming, home maintenance and repair, and vehicle expenses each month. Add anything else that isn’t shown here, but don’t include your mortgage payment.
Housing expense: This includes your monthly mortgage or rent payment, and amounts paid for homeowners association fees, property taxes and hazard and mortgage insurance.
Fixed obligations: This includes credit card payments, student loan payments, car payments, and loans owed to finance companies or other lenders. Add up how much you owe and the total of all monthly minimum payments.
Subtact your living expenses from your gross income; the amount remaining is how much you have available for paying debts. If you don’t have enough remaining for making minimum payments, credit counseling may help you avoid filing bankruptcy.
When contacting a credit counseling service, have your financial information handy. Also make sure to write down any instructions you receive. Keep your appointment and show up a little early; this indicates your readiness to get out of debt.
Credit Counseling: The Importance of being Honest
Professional credit counselors receive training that helps them evaluate individual circumstances and develop debt consolidation/debt repayment plans that are acceptable to your creditors and affordable for you. Answering all questions honestly and without trashing your creditors, the boss who laid you off, or your just plain rotten luck helps your credit counselor get down to the important business of negotiating with your creditors. One aspect of credit counseling that may be especially difficult is giving up your plastic habit–and your plastic. Credit card companies typically require closing all active credit accounts as a condition of your repayment agreement. This inconvenience eventually fades as you work your way toward being debt free.
It seems like it costs a fortune to attend college these days. That’s why many families end up borrowing student loans to pay for tuition and other college expenses.
But student loan debt can pile up over the course of earning a degree, making it tough for recent graduates to keep up with the payments. For some people who need help with debt, it may be necessary to put together a student loan debt consolidation plan. Read the rest of this entry »
(No Ratings Yet)
Welcome to the DebtHelp Blog
This blog covers a wide variety of debt consolidation and loan topics.
We rely on a large network of financial experts and leading authors to write the content for the DebtHelp.com Blog.
Chris Rocks is the Regional Director of the National Credit Federation (NCF). NCF is a nationwide membership-based organization that assists consumers recovering from a financial difficulty and those who need a significant increase in their credit score.
Chris began his financial services career as a Financial Advisor helping young families with risk management and asset accumulation strategies. It was during that time that Chris realized that many of these young families also needed someone to guide their choices with regards to debt management.
He made the transition into the mortgage industry where he first worked as a loan originator and later the Vice President of a small mortgage company. As Chris came across clients who had suffered through financial challenges and saw the difficulty they had in re-entering our credit driven economy, he discovered there was a real opportunity to leverage his unique background and help others.
He can be contacted by visiting his personal site, GoodCreditLiving.com.
Francine L. Huff is the Publisher and Editorial Director of Super Savvy Publishing, LLC, which provides editorial and publishing services. She is a gifted author, freelance journalist, and motivational speaker who has entertained and motivated a variety of audiences through workshops, panels and keynote addresses. Francine is the author of The 25-Day Money Makeover for Women, which has inspired and motivated many readers to rein in poor financial habits, become good stewards over their money and work toward a debt-free life. She has appeared on a variety of TV and radio shows. Francine previously worked for the Wall Street Journal, where she was the spot news bureau chief, a news editor and a copy editor. She has interviewed a variety of financial professionals about financial issues and strives to present information about managing money in an easy-to-understand format that is accessible to people of all backgrounds and income levels.
Karen Lawson is a freelance writer with more than 15 years of experience working in mortgage banking and loan servicing. She holds BA and MA degrees in English from the University of Nevada, Reno. She enjoys writing informative articles about debt management and personal finance.