Debt Free Program
Every day, companies advertise the latest debt free program, full of promises to get consumers out of financial trouble quickly and without effort, sometimes within weeks. But such claims are not realistic or even reliable. Getting into a bad financial situation was so easy. The loss of a job, college or medical bills can seem like viable reasons to put money on credit, but credit card debt and loans can build up fast. Others simply borrow a little here or a little there, for computers, supplies, vacations, or even groceries, and don't even realize how much of a hole they dug until it's often too late. Bills are piled up and suddenly the situation is out of control.
Debt free programs seem to be available everywhere. Banks and financial institutions offer many solutions. Online companies are also gaining in popularity. But spending extra money when already in a money crunch is not always the best solution. Plus, many people simply cannot afford to pay more money that just isn't there. Fixing the problem may seem daunting, and many people simply choose to ignore the problem, allowing it to worsen even further. Others may not even realize they have a problem. But ignorance doesn't solve anything. Just as debt often doesn't happen overnight, neither does a solution. While developing an individual debt free program is not easy, but can be a viable option to get out of a financial crisis.
The first step to solving any problem is to acknowledge that the problem exists. Consumers may claim ignorance to a point, but eventually, when creditors are calling every day and bills are covering the countertop, the situation cannot be ignored. Before starting a debt free program, individuals should sit down and evaluate personal accounts carefully. How did the problem occur? And more importantly, how is it resolved? Discovering how the financial crisis occurred is crucial to keeping it from happening again. People who borrow continue to borrow out of habit. That cycle must be broken in order to move forward. Pray for guidance. "God is our refuge and strength, a very present help in trouble." (Psalm 46:1) Understand the severity of the current financial situation and then make a plan to tackle it.
Tackling the problem is often easier said than done. Start a personal debt free program by making a list of all debt, interest rates and fees, if applicable. On a separate sheet of paper (or spreadsheet if using a computer), add up sources of income and subtract other ongoing bills that can't be ignored. Budge what is left over repay what is owed. Resist the urge to rollover debt onto new credit cards with tempting introductory rates. Unless significant repayment can be made within the introductory period, interest rates can be higher in the end. Plus, each time an individual opens a new account, it appears on his or her credit report, which creditors will evaluate before extending further credit. Too many new accounts will flag a creditor and reduce chances of approval. Repayment doesn't have to be a science. Review existing bills. Some advisers counsel consumers to pay the smallest bills first while paying the minimum balance on other accounts. This gives consumers a sense of accomplishment. Once smaller bills are out of the way, they have fewer to worry about. Others suggest tackling the loans with the highest interest rates first. This strategy focuses on saving money in interest that can build up over time. Whichever plan makes the most sense for a debt free program, choose one and stick with it. Consumers can also call creditors to see if they are willing to negotiate lower interest rates or forgive late fees that have occurred in the past while working on repaying the amount. Many are willing to work with clients to make a plan happen instead of losing the money altogether.
A personal debt free program does not end when all the bills have finally been paid. Avoiding another financial crisis is just as important. While carrying out the repayment plan, continue to analyze income and expenses. Develop a working budget and monitor spending habits. Pay essentials and then limit excess spending. A good computer software program can help consumers manage their programs effectively. Do not spend more than what is brought in and avoid accruing additional debt. Use debit cards instead of credit cards for everyday purchases. Once an account has been paid, close it. Cut up credit cards. And begin saving. Put some money away into an emergency spending account for unexpected crises like medical bills or car repairs arrive. Plan for larger expenses like college, vehicles, and retirement. Leave room to help others in need. "Pure religion and undefiled before God and the Father is this, to visit the fatherless and widows in their affliction," (James 1:27).
In order to carry out a personal debt free program, individuals must be self-disciplined and able to carry out their goals with minimal supervision. Some people need the accountability and guidance that comes with a standard external program. There are many agencies that offer financial assistance. Some will counsel individuals and offer educational workshops on how to get personal finances on track. Others focus on helping individuals manage a personal program. These agents will handle the negotiation process and establish a payment schedule. Other less attractive solutions include consolidation loans, settlement and bankruptcy, all of which can impact a person's credit report. Consumers must be careful in dealing with any of these agencies. Scams have increased. Find an accredited professional who can offer assistance. Whether or not individuals choose to use external help or help themselves, developing a solid budget and money management plan is necessary to stay on track and create a positive financial future.
Debt Collection HelpDebt collection help can be found by understanding consumer rights about fair collection practices and knowing what can be done about harassment from creditors and third party collection agencies. Collection agencies often employ people who are not swayed by sympathy. Their job is to collect the money and that is what they try to do. When a debtor stays calm and composed and is not easily intimidated the collector may try scare tactics. When a collector makes threats of a lawsuit or garnishment of wages they are out of line. Threats of any kind are considered harassment. The Fair Debt Collection Act protects consumers from harassment by collection agencies. Individuals working for agencies are not allowed to use profanity or abusive language to collect a debt. Debt collection help should be sought anytime this type of behavior takes place. "My help cometh from the LORD, which made heaven and earth" (Psalm 121:2).
One thing that a debtor can do is to tape the phone call. Let the agency know the conversation is being taped. This might help in keeping the conversation from getting out of control. In addition, keeping notes about the conversation can count as a record. Note the time and day of the call, the name of the caller, and what was said. Knowing your rights as a consumer can make a difference on how the conversation goes. Let the collector know that he or she can get in trouble for harassment. If harassment is a problem then write a letter to the agency and note specifics on what was said including who said it especially any threats and ask that contact discontinue immediately. Mail the letter return receipt requested. If the harassment does not stop then contact the Federal Trade Commission (FTC) and the Attorney General's office for debt collection help.
A consumer who is being contacted by an aggregate agency should take it seriously and become familiar with the state laws for debt collection help. If the account is legitimate then working out a payment agreement would be good. The best thing to do is to agree to send payment on such and such date. Some collectors may try to talk the debtor into sending several post dated checks and make promises that they will not cash them until the date noted on the check. Sending post dated checks is not a good idea. In addition, an agency may try to get a debtor to agree on sending automatic payments through a checking account. Do not give a collector any bank information or personal identification information. If the person who is working for the agency is not honest he or she may be tempted to use the information for personal gain.
When an aggregate agency begins collecting for a past due account the initial contact should be through a letter with the account information so that the debtor can verify or dispute the debt. If the past due account does not belong to the debtor then he or she will need to send a letter back to the agency disputing the account. The same thing should be done if the account is legitimate but the amount owed is not correct. In this type of situation the debtor should send the latest information that is available showing the past due amount to the agency. If the agency tries to collect on a past due account that does not belong to the debtor and have ignored the letter or letters disputing the account then debt collection help may be needed. A debtor should send a certified or return receipt requested letter asking the agency to discontinue their collections. If collections continue then the debtor will have to contact the FTC or the state Attorney General's office for further help.
Under the Fair Debt Collection Practices Act (FDCPA) the debtor has the right to request validation of the past due account that the agency is trying to collect on. After receiving the initial letter from the agency the consumer should contact the agency with a letter within 30 days of receiving the first letter and ask for validation of the account that is past due. Validation should include the original contract with the original creditor signed by the debtor and the history of payments and interest or fees charged. If the agency can not verify the past due account then they can not collect on it. This means that they can not call the debtor or contact the debtor at all and they can not place the account on the person's credit report. The debtor can sue any agency who is in violation of this and will probably be awarded money for damages of the violation. For debt collection help on this type of scenario the person should talk to the FTC or an attorney.
An aggregate agency must be legally licensed to collect a debt according to the state that the agency resides in. Some states may not require licensing. For debt collection help to find out if the state requires a license, the debtor can contact the state offices to find out. Even if the state does not require licensing the agency is still bound by the guidelines of the Fair Debt Collection Practices Act. If the agency does not validate the debt then the debtor can have the account removed from his or her credit report on the grounds that the agency could not validate the debt according to FDCPA. For more information an individual can do a search online about debt collection help.