If you are living with the stress of too much debt, I have a question...what would you feel like if you were DEBT FREE?.  Regardless of your financial circumstances, you can be DEBT FREE...     How would that feel?

If you were to do a search about the average family debt in America, you would get statistics all over the board.  But, if you were to average them out, here is a basic picture of the average American family's debt:

• Total debt per family                       $ 17,500
• Credit card debt                              $   7,500

Now let's think about that for a minute.  If these are the averages, that means that some households have much lower over-all debt and therefore lower credit card debt. 

But on the other hand, that means that some households have much higher over-all debt and therefore much higher credit card debt!  After helping people solve their debt issues for over 10 years, I have found that our average client has credit card debt that totals about $25,000!

Big question...

HOW WOULD YOU FEEL IF YOU WERE DEBT FREE ? ? ?

Have you ever thought about it?

I'm not talking about dreaming about winning the   lottery, but finally paying off everything and everybody you owe!

No debt...zero...nada !

• No more waking up in the middle of the night worrying about the bills!
• No more standing at the check out counter and praying the card is not declined!
• No more making excuses because you really can't afford to go with your friends!
• No more dreading the end of the month,knowing there is not enough to pay all the bills!
• Get the idea???  NO MORE ! ! !

I was talking to a good friend of mine about this and he said that to him, being DEBT FREE is better than about anything you could imagine!  I think he's right!

When you under the burden, pressure and stress of DEBT, you really can't enjoy life. 

I mean, what good is driving a new car if you know you really can't afford it?  Sure, you have a nice big home, but the truth is, you can barely keep up with the payments, much less pay for any maintenance or additional "trimmings". 

OK...I think I've made my point.  Are you ready be Debt Free?

Or...are you ready to...FEEL WHAT IT'S LIKE TO BE

DEBT FREE?

STEP ONE

It's time to get down to business...financial responsibility.  (Really...has it come to that?)  Financial responsibility starts with an honest accounting for every dollar that comes in, but most important, that goes out.

Yep, the old BASIC HOUSEHOLD BUDGET.

List everything you are spending money on.  Not just the big items like rent or mortgage, car payment, groceries and utilities... I said you have to be honest!

What about:

• Daily latte at Starbucks?  Really?  At $4 -$5 per day?
• Health club membership you rarely use?  Seriously?
• Buying lunch out instead of making a sandwich?
• OK...I know I may be over stepping, but what about that smoking habit?  At $5/pack?
• And yes, you better address all the other little "things" that can really add up!

It's time...and you know it. 

STEP TWO

Now that you've found a few (or several) extra dollars from getting rid of some, if not all, of your "wasteful spending habits", you can start down the road to financial freedom!

Depending on your individual financial circumstances, you most likely will be a candidate for one of the following programs:

• Debt "Roll-Up" or Snowball Plan
• Debt Settlement
• and if none of the above works...Bankruptcy

A DEBT "ROLL-UP" OR Snowball Plan

If you have found an extra $100 or more from making cuts from you "out-go" in the budget and, you have the self discipline to follow through with the program, this might just work for you.

Basically, you are going to list all of your unsecured debt (you can do all debts, but for now let's just tackle the unsecured ones).

List from the smallest balance to the largest balance.  Don't worry about interest rates now.

Le't say the smallest balance requires a $50/month minimum payment and you have an extra $200 (from all of the $ you were wasting).  You are going to pay $250 towards this balance until it is paid off.

After it is paid off, you are going to start on the next balance.  Let's say you have been making $100/month as a minimum payment on this one.  Now, you are going to add the $250 from paying off the first balance to the normal $100 for a total of $350 going after this second balance.

Once it's paid off, you're going to add $350 to whatever the minimum payment is on the next balance...and so on...and so on.

Guess what?  You're going to have all of these unsecured debts paid off before you know it!

HOW'S THAT GONNA FEEL???

Oh yeah, baby!!!

And since this worked so well on the unsecured debts, what about adding the extra money you now have from paying all of them off to your mortgage or student loans?  Wow!

Need some help with this?

If you don't have any extra money or if it seems a little "overwhelming", then you should consider a DEBT SETTLEMENT PLAN.

Debt Settlement is for people who, because of circumstances beyond their control, find themsleves in serious debt.  If you can't afford the minimum payments on all of your unsecured debts and/or some have been turned over to a debt collector, you would profit from a Debt Settlement Plan.

Debt collectors are usually willing to accept less than the balance due because of your financial hardship.  This can be 50% or more, again, depending on several factors.

Once the balance has been negotiated and the debt settlement agreement is paid per the debt settlement agreemenet, this account will be noted on your credit report as "paid-in-full" or "paid-as-agreed" or even "settled at less than the balance due". Regardless, the balance is ZERO....$0.

Let me ask you again...

HOW'S IT GONNA FEEL TO BE DEBT FREE!!!

OK, let's say that things are so bad you can't take advantage of the Debt "Roll-UP" Plan or even the Debt Settlement Plan, then you should consider Bankruptcy.

You will need to find a compentent bankruptcy attorney, but be careful!  You should interview two or three in your area and get some references.

You should not have to pay too much up-front for their services and you should not have to pay anything for the initial consultation.

But even if you have no choice but to file for bankruptcy, life is not over!  The bankruptcy process is not as bad as you imagine.  In fact, once it is completed, not only will you be DEBT FREE once again, you will be able to rebuild your credit a lot quicker than you think.

Sit back, close your eyes...one more time, let me ask you...

HOW WOULD YOU FEEL IF YOU WERE DEBT FREE?

Then do something about it...

Photos by eric731

2014 is just around the corner and here are a few tips on how you can live DEBT FREE!

If you are like millions of consumers, you probably have taken on too much debt this last year. 

This could be due to just too much spending or because of circumstances beyond your control, but either way, carrying too much debt creates all kinds of stress!

Here's a few tips that can help you live debt free in 2014:

If you don't know exactly where you are financially, then it's time to find out!  Many people have no real idea of what they are spending money on.  If this is you, it's time to do some homework and complete an honest (that's right...list everything coming in and going out!) budget worksheet.

Once you know where you stand, it's time to decide what the best plan of attack on those debts should be.

If you are just making the minimum payments on all of your unsecured accounts, then you know it could take many years to finally repay those debts.

You may be qualified for a DEBT MANAGEMENT PROGRAM.

Advantages of a Debt Management Program:

• ONE Monthly Payment
• Reduction or elimination of your interest rate
• Forgiveness of over-the-limit or late fees
• Usually DEBT FREE in approximately 48 months (varies)

Click here to learn more about a Debt Management Program.

But, if you are not making the minimum payments, and have had some or all of your accounts going to collections, you should consider a DEBT SETTLEMENT PROGRAM.

Advantages of a Debt Settlement Program:

• ONE Monthly Payment which is usually about half of what your total payments are now!
• Eliminate Debt Collection calls
  
• Settle many of your accounts at 50% or less (varies)
• Usually DEBT FREE in 36-48 months (this will also vary with the amount of debt)

But, what if you just are so far behind that you do not have any discretionary income (money left over after all the major bills are paid)?

If that is the case, then you may need to consider BANKRUPTCY PROTECTION.

Notice I said "Bankruptcy Protection".  Bankruptcy allows someone who is just too far in debt to ever recover, keep a very large portion of their assets (home, car, etc.) and have most or all of their debts dismissed.

There are different types of bankruptcies, and you should consult a BANKRUPTCY ATTORNEY to decide which one would be best for you.

You can be DEBT FREE, but you have to take action.

If it seems overwhelming, we can help.

Short Sale or Foreclosure?

The decision to do a short sale or to let your home go to foreclosure, is not an easy one. While for some homeowners, it is easier to throw up your hands and let the bank take your home, that might not be the wisest thing to do.

Benefits of a Short Sale

• You are in control of the sale, not the bank.
• You may sleep better at night knowing who is buying your home.
• Your home sale will be handled like any other home sale.
• You will be eligible, under Fannie Mae Guidelines, to buy another home in 2 years instead of 5 years.
• If your credit report does not reflect a 60 day late pay, under Fanny Mae guidelines, you will be eligible to buy another home immediately.

Benefits of a Foreclosure

• No mortgage payments to make
• The home is yours until the foreclosure is final
• No strangers touring your home
• Some banks offer "cash for keys" after a public sale

How do Short Sales and Foreclosures affect your credit score?

A short sale may be considered to be a derogatory mark on your credit even though credit bureaus do not show the word "short sale" on your credit report. It may say "paid in full for less than agreed" or "settled for less," among other categories. Some clients have reported negative FICO score drops from 50 points to 130 points.  Major point drops are typically due to being in default, meaning you have fallen behind on your payments.

Alternatively, a foreclosure will generally remain on your credit report for 7-10 years and your credit score will drop by over 150 points.  If a prospective employer runs a credit check on you, your job application may be denied if you have a foreclosure on your record. 

Which one is better?

As you can see there are a lot of potential problems with both a short sale and foreclosure. So, which one is better? Short sale wins every time. In all aspects, a short sale is more beneficial to you, the home owner, as well as the bank. It saves them money from legal fees and paying for the foreclosure process, and it also saves your credit report, potential taxes, and deficiency judgments.

If you’re facing a financial hardship and think you may need to seek a short sale, talk to a Realtor ASAP to get the process started. The faster the better. Don’t wait until the sheriff is knocking on your door to repossess your home. 

Too much DEBT = Too much Stress

Here are 3 Tips on how to cope with DEBT and STRESS:

FIRST: FIND OUT EXACTLY WHERE YOU STAND FINANCIALLY

It may sound like a useless exercise, but believe me, the unknown is usually not as bad as you think it is.

When stress, panic, fear, whatever you call it takes over, your mind has a way of making the situation seem bigger than it really is and impossible to correct. DON'T BELIEVE IT!  Someone once said that FEAR is:

 False Evidence that Appears Real

It's time to face your F.E.A.R and find out what your reality is.  A Basic Budget can be very helpful.  Don't forget to include all of the miscellaneous items like:

• Starbucks
• McDonalds
• Movie Rentals

Those small items may seem insignificant, but they can really add up to a big chunk of your monthly budget!

SECOND: SEE IF YOU CAN FIND 3-4 EXPENDITURES THAT YOU COULD LIVE WITHOUT!

If you are $200-$300 a month short and the stress is overwhelming, could you do without (or at least cut back on):

$4.00 Latte x 5 days x 4 weeks = $80/month

$6.00 Lunch x 5 days x 4 weeks = $120/month

                                      $4.00 Movie Rental x 2 days x 4 weeks = $32

That's over $200 saved!  Could you cut back on your cable bill by eliminating some movie chanels and getting Netflix instead?  What about canceling that gym membership and walking your dog instead?  Just be creative.  There are many small ways to cut back that add upt to BIG TIME MONEY SAVED!

Remember, is the stress of "living without" a couple of things worth minimizing the stress of going deeper and deeper in debt?

THIRD: It's time to get some advise on how to deal with your debt! 

Debt Management and Debt Settlement are two programs that can:

• Stop collection calls
• Reduce you total monthly debt payment
• Lower or eliminate interest rates and late fees
• Help you become DEBT FREE in 24-48 months

REMEMBER:

• Your mind will make the problem seem greater than it really is
• There is always a solution
• It's time to TAKE ACTION