Time To Seek Help What should you do? You need a clear picture of your financial standing.
Make this Debt List. NOW! Debts Minimum Payment Rates of Interest Outstanding Amount Mortgage Auto loan Credit card 1 Credit card 2 Credit card 3 Other loans
Calculate Your Disposal Income Look through your “Debt List”. Pay the higher interest rates debts. Do this Amount Note 1) Total up Income From all sources 2) Minus Expenditure Needs not wants 3) Pay Debt Disposable Income Keep some for unexpected expenses.
Make a Balance Transfer? Get a Debt Consolidation Loan? Know the “Annual Percentage Rate” (APR) Pick one with the lowest APR. 10% rate means you’ll pay $10 per $100 you borrow annually. Compare APR: 10% 18% 20% Check the Annual Percentage Rates (APR). It is a good standard for comparing the percentage costs on different loans given by banks. Are there balance transfer charges?
You have stopped paying your monthly installments to your creditors for a few months.
You have saved at least 50% of the total amount outstanding.
You have to:
negotiate with your creditors for a settlement.
record the terms and conditions of the agreement taking place between you and your creditors.
maintain accurate information related to your debt account.
learn to write letters with proper information.
Debt Settlement For it to work Objective: Not to be declared a bankrupt!
Taking up another financial obligation? What’s your purchasing power ? Calculate your debt to income ratio: Monthly Debt ÷ Monthly Income 37% to 40%: High debt-to-income ratio. Above 50%: Living on the edge! Assess your financial health first before you spend! Feeling much better? Don’t put yourself through another financial stress.
Remember how you got into this mess . illness? divorce? sudden loss of job? overspending? It t he Joneses’ fault?
The wedding of the year? Let’s go for the best retirement plan for our golden years. A bigger house? We can upgrade when the time is right. Get the latest, again? I am comfortable with what I have. A dream holiday? Not now. We can save for it. Work harder. Get a scholarship. Study overseas? The unexpected. Let’s save for that. Chang your attitude. T he Joneses are as broke as you are.