Your Questions About Eliminate Your Debts

William asks…

anyone know of good finance company to do debt consolidation?

I have been at my job over 5 yrs and i have app 20000-25000 in equity in my home, but my credit score is probably around 450 from where my husband was unemployed for few months now he is a sub contract tuck driver need to be able to breathe little easier scraping everything together not to be late anymore

John answers:

Hello, Hopeful!! 😀

From an equity standpoint you are in a good position. Yes, your credit score could use improving, but there are companies that work on your behalf to do just that. In regards to your question about debt consolidation, this is a good way to improve your debt situation.

Debt settlement and debt consolidation both offer ways of reducing your debt. Debt settlement eliminates your debt, while debt consolidation reduces interest rates. While debt consolidation might work for some, there are cases when debt settlement is a better option.

The goal of both debt settlement and debt consolidation is to lower your debt. Debt settlement companies negotiate with your creditors to reduce the amount of your loans. Debt settlement can reduce your debt 10% to 50%. To get the most out of the program, pay off the rest of your debt as soon as possible. Also, close accounts that you don’t plan on using to raise your credit score.

Debt consolidation pays off your high interest debts with a low interest loan. Home equity loans provide the lowest rates, but personal loans can also be used. With rates lower on your debt, you can pay off the principal sooner by making the same monthly payments.

Credit Score Implications

Both debt settlement and debt consolidation will have a slight impact on your credit score. Since your debt isn’t actually increasing, you will only be hit for opening another account. By closing your paid off accounts, you can partially offset the penalty. In a short period though, you will be in good credit standing if you remain fiscally responsible.

No one financial choice fits everyone’s needs. While debt consolidation might work for some, debt settlement might work better for others. In extreme cases, debt settlement can help to avoid bankruptcy. And if you need additional advice, talk to a credit counselor who can take a look at your finances and offer suggestions.

You can learn more with the resources below.

Good luck!! 😀

Jenny asks…

Has the US ever been out of Debt?

Ok, I just need to know this. Did Bill Clinton get us out of debt? AT ALL? Did he help us out? Are we in Debt to China and Japan? And WHY are we in debt to China and Japan? I keep having these arguments with my husband about Debt issues.

What is the difference between a democrat & republican?

Thanks if you get a chance t answers these.

John answers:

The Revelotionary War was fought on debt money and we have never climbed out of that hole. We have reduced the debt several times, and even had very low debt before the World Wars and Great Depression, which were also financed on debt.

The national debt is very misunderstood. We don’t owe China or Japan money, it doesn’t work that way. We owe private Chinese and private Japanese citizens money, and lots of it. Anyone who buys a US Saving Bond or Treasurary bill holds a part of our debt, wiether that person be an American or an African. Since we have a trade deficit with most the world, they have an excess number of dollars that they aren’t using to buy our exports. So far they seem to be content buying into our debt with it.

Bill Clinton most certainitly did not get us out of debt. What made headlines is when he provided surpluses. A surplus happens when the government collects more in taxes then it spend on entitelements or infostructure or the military or whatever the government spends money on. The opposite of a surplus is a deficit, that happens almost every year when Congress decides to spend more money than they have collected that year. The difference is made up by selling more savings bonds, and going deeper into debt.

If we could continually run surpluses, and use that twoards paying down the debt, then we could nearly eliminate the debt once the bonds all expire. This would actually be a politically unpopular thing to do; most politicians would rather return the excess tax money to the people, or spend it on some pet prodject.

Getting back to Clinton, he didn’t really help us out. What he did was refinance our debt into shorter term bonds, which would then pay lower interest rates. The US Goverment’s largest expense is the interest expense on the national debt. When Clinton was able to cut that interest rate, along with cutting spending on the military, a few other programs, along with recieving increased tax revuenue due to a growing economy (and I don’t credit him for that) and with raiding the Social Security trust fund that is how he was able to show a surplus on paper. Since interest rates were at a low rate, and now those short term bonds are expiring and being refianaced with higher interest rates now a days, the end result of Clintons surplus is not very helpful to America now a days.

And finally, and briefly the difference between Democrats adn Republicans (very, ery generally speaking) Democrates are liberal and don’t care so much about your private life. Democrates want to make life more fair and support programs such as welfare to achieve this. Republicans are the opposite, want to cut government spending (except for the military) and cut taxes, while at the same time passing laws about what you can and can’t do, such as gay marriage or drugs.

Ken asks…

will a debt counseling affect my credit report?

I am going through a debt couseling service to consolidate my high interest credit cards, will this hurt my credit score?? Through this agency I can only have 1 open credit account — which is fine, I am SICK of credit debt, but what about buying a vehicle?? WOuld I be able to get financing??

John answers:

I run a real estate title agency. The Mortgage Broker’s I’ve spoken to have one answer to that. Dont’ do it. Even tho you eliminate debt and multiple credit accounts which should improve your credit, the mere fact that you have a debt service on your credit means most people wont’ touch you with a ten foot pole. You are better off filing bankruptcy. Even with a bankruptcy on credit you can still get credit. Just at a high interest rate. With Debt Consolidation. You may not be able to get credit at all.

I think the reasoning is that these debt services essentially eliminate any profit these creditor’s can make off of you. So there is no reason for them to give you credit again.

And when I asked about this the dont’t do it answer was a strong one. Not just offhand advice.

George asks…

can a large debt be cleared if the debtor suffers mental health issues?

Hi,
What would need to be done in this situation? Would they clear the debt on compassionate grounds if the creditor was written to – The current debt is about 5K and very small payments are being made to it monthy.
Thx

John answers:

Firstly, a creditor can settle a debt (if they are willing) for any reason; however, they cannot be forced to settle or relieve you from a debt due to mental health issues. The only way for a Debtor to eliminate a debt is through bankruptcy, mutual settlement, or hardship (depending on the type of debt).

You, or the person responsible, should contact the creditor and discuss a potential settlement; however, know that this could negatively affect your credit. Otherwise, just continue to make the minimum payment and more if possible.

Good luck!

Betty asks…

what is a debt settlement process?

I want to know the process that are involved in debt settlement

John answers:

The debt settlement process normally includes the following stages;

The Setup:

When you work with a debt settlement company, you stop paying your creditors and start paying into a trust account set up by the debt settlement company. Part of your payments goes towards fees and part of it goes towards an account that will then be used to pay off your creditors after negotiation.

The Dark Waiting Period:

The missed payments begin appearing on your credit history, your credit score drops, and creditors start calling you. Creditors typically write off debts that are over 180 days late, so as that date nears they become more and more anxious.
In addition to waiting for the creditors to get anxious, you have to wait for your trust fund’s balance to get high enough to pay down negotiated debts.

Collections/Negotiation:

At some point, the creditor will sell the debt to collections agencies for less than the debt itself. It is somewhere at this point that the negotiation begins with the debt collectors and you start eliminating your debt!

However, if debt negotiation does not sound right for you, you might want to consider a more traditional debt reduction program like debt consolidation ( http://www.debt-settlement-tools.com/debt-consolidation.html ). You might not get out of debt as fast. However, you can still lower your interest rates – maybe even lower your monthly
payments.

Don’t forget that you can always carry out debt settlement by yourself.

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