Economy

Debt Settlement, Debt Management, Debt Termination – What's the Right Choice?
When you're facing a mountain of credit card debt, the stress can be overwhelming at times. Collection calls, daily harassment, rude bill collectors, and nasty letters all add to an already intense situation. Consumers facing this kind of pressure naturally seek out the services of professional debt companies. But the search for reliable assistance can actually add to the stress! For example, just type in "debt help" on any search engine and you'll see page after page of results. There are literally thousands of debt companies out there. How to choose? How to tell the scams and schemes from the legitimate services? Should you consult with a non-profit credit counselor? One company tells you they can cut your bills in half. Another outfit says you really don't owe the banks any money at all and they can wipe the debt away for you. Who should you believe? Where should you turn?

Consumers face a bewildering range of choices when seeking debt assistance. As with any service, when considering a debt reduction program, "let the buyer beware." Yes, there are some good debt companies out there. But many are only in the business to take your money. Some actually leave you much worse off than when you started.

Where to start? Let's categorize the different types of debt program. This will cut down on the confusion and help you decide where to start your search. I'm assuming here that you are trying to avoid bankruptcy. I'm also assuming that you are struggling every month to keep up with the minimum payments on your debt obligations and have fallen behind or are about to start falling behind. Further, in what follows, I assume that you can't borrow against your home or otherwise pay off your debts off. In other words, we're talking about a financial rescue situation.

To simplify matters, let's look at debt companies in terms of three rough categories:

1. Debt management plans require 100% repayment of the debt through a structured payment plan. This is what non-profit credit counseling agencies do, as well as for-profit debt consolidators.

2. Debt settlement or debt negotiation plans require payment of part of what you owe, usually around 50% or less, with the remainder forgiven by the creditor. Virtually all of these companies operate on a for-profit basis.

3. Debt termination companies claim to wipe away 100% of your debt through special legal procedures, so your total payout consists only of their fees.

Right off the bat, let's cross #3 off the list. Sorry, but this one is a scam. You can recognize this type of company very easily. They make the claim that because of how our monetary system works, you never really borrowed any money in the first place! Their system is based on the false belief that credit card banks are operating illegally by extending credit to you. Absolutely do not give your money to one of these outfits! The fees start at $2,500 and go up from there. I spoke with one fellow who lost $15,000 in this scam.

Folks, there is no free lunch. The only thing such "debt termination services" will do for you is take your money. Their legal theories are total nonsense, and the courts do not recognize their arguments. These are the same people who also claim you don't need to pay your income taxes either. As tempting as it might be to try one of these services, you'll only get yourself in deeper trouble with your creditors.

That leaves #1 (debt management plans) and #2 (debt settlement). Debt management plans (DMPs) are offered through credit counseling companies that generally operate on a non-profit basis, and also through for-profit companies that use a similar business model. The essential idea is that you write one monthly payment to the agency, and they in turn distribute that money to your creditors. Companies offering DMPs work with your creditors to lower your interest rates so that more of your money goes toward paying off the debt. Of course, there are fees involved. The non-profit organizations are not free - a point that often confuses consumers. Also, "non-profit" does not mean the company is any good at what they do. Sometimes, a for-profit company can afford to provide a better quality of service because they can pay their staff a higher wage! So don't automatically think that non-profit services are good while for-profit services are bad.

When should you consider enrolling in a DMP? While many financial advisors seem to think that DMPs are the answer to every debt problem, in reality companies in this end of the business are basically acting like collection agencies for the banks. In the real world, a DMP only makes sense if you are in a relatively short-term financial crunch. Let's say you are between jobs but know that your income prospects will get better in 6-12 months. A DMP would make sense in such a situation because it would bring the temporary relief that you need until you can take your bills over again and start paying down your debts at a faster pace. On the other hand, if your situation is long-term and you don't see any light of the tunnel, then a more aggressive approach might make sense.

Debt settlement or debt negotiation can provide a more aggressive approach to debt reduction that makes sense for many consumers. It should be viewed as an alternative to bankruptcy. In fact, it's a very good alternative to Chapter 13 bankruptcy in particular. (For a detailed comparison between debt settlement and Chapter 13 bankruptcy, see http://www.new-bankruptcy-law-info.com.) It also gives consumers a fighting chance to work their way out of serious debt problems without the feelings of failure and loss of privacy that come with bankruptcy. One of the best features of debt settlement is that it involves a reduction in debt principal (the amount you owe), rather than just interest rates as with DMPs. The result is a much faster path out of debt. It's also a much more flexible approach than other types of programs, because it's the ONLY approach that allows for adjustments up or down in the monthly funding commitment. That's especially important for consumers with unstable finances.

Debt settlement isn't a perfect solution though. One of the major drawbacks is that the fees are usually quite steep, often amounting to 15% or more of your starting debt level. Also, settlement has a negative impact on your credit score (although your credit will take a hit under a DMP as well). However, when viewed as an alternative to bankruptcy rather than a cure-all for financial woes, it provides a good solution for many consumers. Essentially, debt settlement is really nothing more than a negotiated compromise with your creditors. It's actually a win-win scenario for you and the creditor.

Further, you don't need to hire a professional to do this for you. Debt settlement has become so common and popular in the last few years that many of the major credit card banks will automatically offer 50% settlements (or less) in order to cut their losses. Why pay those big fees when you can do it yourself and save $1,000s? Even if you don't get as big a reduction as you would with a professional negotiator, you'll still come out ahead by not having to pay the fees. For more information on the DIY approach to debt negotiation and settlement, see the free 32-page consumer report, "How to Eliminate Your Debts Quickly and Safely Without Filing Bankruptcy," available for instant download at http://www.zipdebt.com/free_eliminate_debt_ebook.php.

If you're drowning in debt, the time to act is now. Explore your options, establish a game plan, and take action!





Meetings–Management Meetings–Why are they a waste of time? The 80/20 rule and 5 steps to success
How often have you sat in a meeting thinking “This is such a waste of time. I have so many others things to do. I wish I could be somewhere else” Sound familiar? I’m sure we all have had these thoughts at one time or another and maybe for some of us, it has been very recent!

My experience as a line manager, senior manager and organisational psychologist over the last thirty years, means that I have attended and run many meetings. In my work, one of the most common complaints I get from all levels of the organisation, is that “We waste so much time here sitting around talking. Nothing gets done as a result”. Why are so many meetings a waste of time?

My conclusion is that the vast majority of meetings: • Cover information that could be distributed by other means • Focus too much on the past – what has gone rather than what is to come • Do not have a clearly defined purpose with intended outcomes

So, if you have to run meetings, the first decision to make is to decide what type of meeting it is – • Is this an information sharing meeting or a problem solving meeting?

If it is an information sharing meeting, then there are two guides to follow: 1. Can the information be distributed in another way (eg email etc)? In this case there is no need for the meeting, thus saving a lot of time. 2. If the need to share the information must be by way of a meeting, then the focus of the meeting (and time spent) should be • 20% past oriented - i.e. reporting on the information (e.g. results) and • 80% future oriented – i.e. deciding what we are going to do with the information.

Using the “80/20 rule” for your meetings will ensure that everyone participates and can see some real advantage to having the meeting. By the way, if you are a participant in one of those boring meetings we mentioned earlier, it is possible to have some influence on the meeting process. Keep asking “What are we going to do with this information?” or, “How should we proceed now?”. In other words, every time the meeting starts to focus on the past, redirect it to the future.

If it is a problem solving meeting, then there are five steps to follow to ensure the meeting is a positive one with some productive outcomes.

As with Information sharing meetings, quite often problem solving meetings don’t reach their full potential because the meeting dwells too much on the present or past situation, rather than “how things ought to be”. Using the following five steps will ensure that your meeting stays focused on the future and is productive.

1. Ask each participant to prepare for the meeting a few days in advance (one week is ideal, but not always possible) by jotting down some notes in answer to a short “meeting question”. They need to bring these notes to the meeting.

2. The meeting pre-work question must be framed on the assumption that the problem has already been solved – ie. it must be expressed at some future time. For example, if a telephone service department were looking for ideas on how they might improve their service, the question might be put: “Assume that we have just had a very successful year, and that we have received heaps of feedback which suggested our service given to customers has been first rate over the last twelve months: • What things did we do to get such great success? • What problems or challenges did we have? • How did we solve these problems or meet these challenges?”

3. At the meeting ask all participants for their ideas and list these on a whiteboard or flipchart paper etc. Note. It is very important to list these ideas so that everyone can see them – this helps maintain people’s interest, keeps people focused and is useful for keeping the meeting on track.

4. When the meeting has reached consensus on which items are worthwhile and achievable, two further columns are added to each flip chart page. One column is headed “By when” and the other is headed “By whom”

5. It is important that the workload is shared by all participants. In the first column “By when”, the group is asked to allocate a time for when this aspect could be achieved. When this is agreed, people are asked to volunteer to undertake responsibility for ensuring particular items are undertaken (not necessarily to do them, but to take responsibility for them), by placing their name in the “By whom” column. Once this is done, the meeting now has an action plan for solving the problem. This can be written up and distributed to people following the meeting.

I have used this process at all levels of organisations and with mixed stakeholder groups with amazing success over the last 20 years. Whether your meeting is an information sharing one or a problem solving one, I’m sure that using the guidelines set out in this article will make them more rewarding for everyone. If you would like some free advice on how to construct your “problem solving” meetings, or to discuss any aspects of meetings, please contact me at www.nationallearning.com.au.

Copyright 2006 The National Learning Institute

Understanding And Maintaining A Good Credit History


Credit history may be defined as a record of how a person has borrowed the debt and repaid the same over a period of time. A good credit history is an important aspect of your life.

Keeping a good credit rating is of immense importance to maintain the quality of life. It helps you to have easy access to loans at competitive rates of interest and with lesser formalities.

Establishing a credit history is the first step towards having a good credit rating. If you do not know your credit rating checking with the local credit bureau and getting a copy of the report would be the first step towards this end. Absence of credit history affects young and old. The problem of not having a credit history is also common among divorcees and widowed women as they might have shared the accounts with their spouse and that were reported in the latter’s name. Building a credit history by applying for credit in a local business unit or bank may be resorted to in such cases. Another option would be to open a savings or checking account to show your management of Money. Paying the bills on phones and pagers on time will demonstrate the capacity to pay. Securing a standard or secured credit card may also solve the problem in building up a credit history.

Maintaining a good credit history shows your responsibility to pay off your debts. Should you feel that the debts are getting out of your control you should not hesitate to seek the help of a financial counselor who can assess the situation better and find the best option to bail you out of the trauma. A poor credit history may not only deny you further loans but also creates stumbling blocks in finding a job or letting out an apartment. The importance of rebuilding the credit history assumes significance in such a situation. Obtaining a credit card either standard or secured and making regular repayments and payments of various bills on time to mention a few would enable you to get back to a good credit rating. At the end a good credit history is your passport to the ever expanding world of credit...







Debt Consolidation Uk : United It Can And It Will Make A Difference ...


Desires keep on growing day by day but all of us have limited funds with him and to meet all the desires at one time is impossible Thus, to fulfill all the desires, one tends to borrow money from more than one lender to meet your funds requirement but later on these debts become a big problem for you , it becomes literally impossible to handle so many lenders at one time.There is a solution to this problem and that is the Debt Consolidation UK.

Debt Consolidation UK helps in debt management. Debt Consolidation UK as the name suggest consolidate all your existing debt into one for a lower rate of interest. At times, it become difficult to deal with so many lenders and you may even forget to pay the loan installment to any of the lender so there is a risk involved. debt consolidation UK makes you liable to one and only one creditor . It can help a borrower in improving his credit rating by making the payment on the loan in full and on time.Its not about putting more debt burden on your shoulders rather its all about consolidating the clustered loans into one big chunk to make it more manageable, it just a transfer of debt to a new lender.

As Debt consolidation UK replaces multiple existing loans and mortgages with a single loan from a new lender which reduces monthly payments by distributing the loan over a longer period of time so it usually bear lower rates of interest than the existing loan and offers more flexible repayment options.With the growing number of defaults on loan payments and bankruptcy cases, debt consolidation has become a common practice in UK. Debt consolidation UK is customized for UK residents to get them out of debts.With the increasing competition in the loan market, various lenders such as financial institutions and banks in UK offer loan for debt consolidation at low interest rate.There are various options available when you opt for debt consolidation UK You may choose from one of them that suit your circumstances and needs. If you have a property or home, which you can keep as a security with the lender, then you can opt for secured debt consolidation UK. This offers greater flexibility with a larger loan amount and a longer repayment term. A borrower can choose from the several interest rate options available such as fixed interest rate, variable interest rate and many mo In case you don’t want or don’t want to have your property at stake you can go for unsecured debt consolidation UK. Debt Consolidations UK suits you even if you have experienced: poor credit history ,defaults , arrears or bankruptcy