Real Life Story on How to Become Debt Free!

Want to learn a method to become DEBT FREE?  Here's a recap of a real life success story you don't want to miss!

get out of debt

I had to comment on an article I read in the 4/2/14 edition of The Oregonian newspaper.

The title was:

           "Couple put strategy into action, paid off $127,000 in debt"

Here's a recap of what they did:

Had over $127,000 of debt:

  • Student Loans
  • Credit Card debt
  • Auto loans
  • Personal debt

It took them a little over 4 years, but they were able to pay off all of their debts and are now living DEBT FREE!

            HOW'D THEY DO IT (HOW YOU CAN TOO):

Find ways to save money/increase net funds. Here are some things you can do:

1. Adjusting your tax withholding.

If you are getting back a large TAX REFUND each year, consider changing the number of dependents/withholdings.  This alone generated about $100/month extra to put towards debts.
2.  Cut your household budget by trimming unnecessary "luxuries" (you can add them after you are DEBT FREE!)

Using grocery coupons. Become a "coupon expert".  This alone could help save you 20%-30% off your grocery bill each month!

Do you really have to have a "Starbucks" coffee each morning?  At an average of $4-$5 per day, that adds up to $100 -$150 each month!

Take a hard look at additional monthly expenses that you could "live without"...

  • Gym membership (you rarely use)
  • Magazine subscriptions
  • Too many "premium cable channels"
  • Going out-to-eat several times a week

I know...but think about this...

As hard as giving some of those things up seems,

HOW GOOD WOULD IT FEEL TO BE 100% DEBT FREE?

OK, you get the idea.  So now you've found an extra $100 -$200 per month.

3.  What now?

List all of your debts showing:

  • Account
  • Balance
  • Interest Rate (not as important as you think at this point)
  • Minimum payment

Sort by the smallest balance first (don't worry about interest rates).

You are going to make all of the minimum payments, but you are going to add the extra (let's say $150/month) you found by making sacrifices, etc. to the smallest balance.

Once that one is paid off, you are going to add the extra $150 plus the minimum payment required on that smallest balance and add that to the minimum payment you are required to make on the second smallest balance.

For example:

Let's say you had several cards, but the Visa Balance was $1000 and the Discover Balance was $2500.

The minimum payment for the Visa was $30/month and the Discover was $65.

You are going to make a payment of $30 plus $150 to Visa until it is paid off.  At the same time, you are making the $65 to Discover as well as all of the other minimum payments required.

Once the Visa is paid off, you are going to take the $180 ($30 + $150) and add that to the $65 due on Discover.  Now you ar making $245/month to Discover (and all of the other minimums as well). 

Once the Discover card is paid off, you take that $245 and add it to the mimium on card # 3.

Get the idea?

Can you imagine how excited you will be when you start seeing those balances down to $0!

Yes, it won't happen over night, but before you know it, you are going to be 100% DEBT FREE!

This is not a new idea.  This is a Snowball Debt Reduction Plan.

If you are serious as this couple was, get your Snow Ball Calculator today!

This all sounds great, you say, but what if you can't keep up with the minimum payments despite making cuts trying to find extra funds, etc.?????

That is a very real problem that anyone that has had:

  • Loss of employment
  • Death in the family
  • Illness or Disability
  • Divorce

...can attest to.

If you cannot afford a Snow Ball Debt Reduction Plan, then you should consider a...

               DEBT SETTLEMENT PROGRAM

Debt Settlement is for those who are doing and trying everything they can to keep from seeking bankruptcy protection.

FREE EBook Debt Settlement  Basics

Basically, funds are deposited in a bank account until there are sufficient funds available to begin negotiations with your creditors/debt collectors.

Depending on several factors, your debts may be settled for 50% or less.

Recent Settlements See what we have  done for our clients!

 

Regardless of your financial circumstances, there is a solution! 

 

For more information about the couple who paid off the $127,000, visit their website at:

                 QueenOfFree.comQueenOfFree.com

 

Photo credit:

www.lendingmemo.com


 



 


Tags: debt settlement, debt collectors, debt elimination, snow ball plan, debt free, credit card, credit card debt relief portland oregon

Debt Control Basics

debt controll basics

If you find that your debt is out of control, it's always good to get back to the basics.   

DEBT CONTROL BASICS:

A)  DON'T BE A VICTUM OF "EASY CREDIT TERMS"!

We have all been at the check out stand and the sales person asks if we would like to get an instant 20% off the purchase.  All we have to do is just take a few minutes to fill out an application for their store card.

Sounds like a good deal, right?  WRONG

Most of the time, store cards are not a good idea. Let's say that your bill is $100 and with the 20% off it is only $80.  Nice savings.  I bet you are starting to feel like an Extreme Couponer! 

However, if you don't pay the remaining $80 off within 30 days and just pay the minumum payments, you could end up paying 2-3 times as much to finally pay off that card.  Not only that, but store cards often come with high interest rates.  Frugal shopper beware!

B) DON'T BUY SOMETHING IF YOU CAN'T AFFORD IT!

I know this sounds simple, but most people get in trouble with their credit as result of spending way beyond their means!

Here's what happens:

You already have a couple of credit cards charged up to about 70%-80% of the credit limit, and you are making the minimum payments each month without too much effort.

You "really need or want" that item and tell yourself something like "It would only increase my monthly payment by $20 and I can handle that."

                               WARNING!     WARNING!    WARNING!

  • Your credit limits will start to be maxed out and that will result in a higher CREDIT RATIO.  Your credit score will decline.
  • By the time you repay these cards making minimum payments, you could end up repaying 2-3 times as much as the current balances!
  • If you should have a severe financial setback, such as Unemployment, Divorce or Major Illness, you could be in real trouble.

C) CONSIDER A DEBT MANAGEMENT OR DEBT SETTLEMENT PROGRAM.

If you find yourself starting to get into financial trouble because of TOO MUCH DEBT, consider a DEBT MANAGEMENT PROGRAM or a DEBT SETTLEMENT PROGRAM.

DEBT MANAGEMENT is a program designed to:

  • Combine all of your payments into ONE PAYMENT.
  • Reduce the interest rates and fees.
  • Help you pay off all of your cards in about 48 months

But, if you do not quality for a DMP, you should consider a DEBT SETTLEMENT PLAN:

  • One monthly payment much less than all of your current minimum payments
  • May reduce your balances by 50% or more
  • Avoid bankruptcy

If you would like a FREE CONSULTATION with NO OBLIGATION, CLICK HERE!

Tags: credit card debt elimination, debt settlement, debt elimination, debt relief in Portland Oregon, debt management

Beware of Credit Card Hardship Plans

beware of credit card hardship plansIf you are late or behind on your credit card payments, you may receive a call from your creditors offering you a Hardship Plans

Are Hardship Plans a Good Idea?

If your hardship is short and temporary, a hardship plan can be just the help you need to get by.  However, never forget that the goal of the credit card industry is to make money...lots of money!

The collections agent on the other end of the phone line doesn't care:                  

  • about you
  • about your family
  • if you lost your job
  • have had major illness

They make a commission when you agree to make payments.  So BEWARE when they offer a hardship plan.

If it sounds too good to be true, it probably is!

A typical hardship plan will usually waive or reduce interest rates and fees for 6 - 12 months.  The pitch is that this will give you a little breathing room and you can renegotiate your payments or plan later.

  • They will want you to set up automatic deductions from your bank account or send them 6 months of post dated checks. 
  • By giving them your banking information, and authorization to withdraw funds, you will have a difficult if not impossible time getting them to stop the automatic payments once the 6 months has passed. 
  • Unfortunately, when they take these future payments, they are generally much higher than the amount of the hardship payment.

Let's take a look at what your Hardship Plan might look like.

  • Your balance is $5000
  • You current minimum monthly payment is $150
  • They offer you payments of $100/month for 6 months at a reduced rate of 6% and no fees.

After six months:

  • you've paid $600
  • $150 went to interest 
  • $450 went to reducing the principle 
  • your balance is $4550

That sounds like a pretty good plan.  However, what they didn't bring to your attention, and what you failed to read in the fine print is that all of the interest and fees that you were not paying during that 6 months will now be charged and added into the balance!

WHAT?  That makes no sense right.  WRONG!  At the end of most Hardship Plans, you end up owing the same if not more that what you started with. The only thing the Hardship Plan did was allow you to remain current for six months of temporary hardship due to the reduced payment.   

When you call to renegotiate your payment and interest rate, more often than not, you'll be back to high interest rates and fees which means it will take you several years and thousands of dollars in interest to pay off your card.

Consider a Debt Consolidation Program

If your hardship is not temporary, you may want to consider a Debt Consolidation program instead.  Through a Debt Consolidation program, your interest rate will be drastically reduced for the life of the debt or as long as you remain in the program. (whichever comes first).  Not only that, if you have already fallen behind, your creditors will "Re-Age" your accounts to bring them back to current status. 

Debt Consolidation programs will help you to eliminate your debt in a short amount of time while saving you thousands of dollars interest.  For more information, please feel free to give us a call or click on the link below.  One of or Debt Solutions Specialists can help you determine which option is best for your situation. 

beware of credit card hardship plans

Tags: debt consolidation, credit card hardship plans, debt elimination