Be Debt Free

Walter S


A freind has signed up for credit card debt reduction and had to pay a $249 up front fee which will be returned if she makes all of the paymnets over the next 18 months.

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Andrew Bicknell


The first step of any good debt reduction program is simply determining how much debt you have and to whom it is owed. This will give you the ability to prioritize which debts need to be paid with the most important ones being taken care of first. While this step might seem some what inconsequential it may be the thing you do to get out of debt.

The reason for this is simple, because until you know where you stand with your debt and to whom it is owed you will have an extremely hard time coming to grips with it, let alone creating a budget to start the road to debt freedom. Debt can have a negative impact on your life both in the present and if nothing is done about it in the future as well.

Once you have listed out your debts you can prioritize them from most important to least important. This does not mean you can ignore the least important ones but they can be put on the back burner until the more dangerous threats to your financial well being are taken care of.

If at the top of your list you find back taxes or a lien against your property or home you need to attack this first. Penalties and compounding interest are the first of your worries in this situation but more worrisome is the power the IRS has when it comes to dealing with those who owe past due taxes. Seizing bank accounts and other assets to pay what you owe can make life very difficult if you run afoul of them.

A mortgage would be another debt that is vitally important to keep paying on. Keeping you and your family sheltered during difficult times is very important from an emotional standpoint. Losing your home to foreclosure can also have long term affects on your ability to find housing elsewhere not to mention its affect on your future financial plans.

Medical bills and child support payments also need to be high on your priority list. Failure to pay these can result in compensatory actions being taken against you. In the case of court ordered child support in many states you can be arrested and jailed for failure to pay. In some states you can also lose you drivers license, making it that much more difficult to get to work and accomplish other tasks that require driving.

Car loans also need to be considered a high priority because it doesn’t take more than falling three months behind before car finance companies will repossess your car. Losing your car can impact your life in many negative ways. One thing to consider if your loan payments are too high is selling the car in order to pay off the loan. A depreciating asset such as a car is not worth your financial future.

You have noticed that credit cards have not been mentioned yet. This is because they are low on the priority list if you have those other types of debt. At the most they should receive minimum payments while you work on keeping current and paying off those debts which pose a greater threat to your financial well being. By targeting your most important debts with a proper debt reduction program you can find financial freedom with a little time and patience.

Kara Wade


 

Most of the people incur huge debts because of credit cards as these frequently used cards carry very high interest rates and penalties also once you are late on the payments. Therefore, credit card debt reduction becomes inevitable after few months of uncontrolled shopping habits. However, you need to take some aspects of getting rid of the old payments before you finally go for it.

 

First step towards pruning the debts is to stop using most of the credit cards for shopping purpose. This measure will ensure saving of money for making the payments. Try to make cash payments for most of the purchases.

 

After you have ensured saving of the money, you should know about the option in credit card debt reduction. One usual way is to open a new credit card at zero or low interest rate for certain period of say one year for transferring the balance amounts into it. Clearly, you will save interest payments for a certain period. But you must also know the fee or penalties on getting rid of old payments to the creditors.

 

Another option is to take out a personal loan to immediately pay off old debts. Then you will be making low monthly payments to the new lender, as the loan comes at lower rate of interest as compared to very high rates on credit cards.

 

You can also take services of some professional companies, who can negotiate with your creditors for reduction of interest rate on the old debts. They will also make a affordable repayment plan that will allow you to repay with ease. The creditors usually agree to the plan and prune the rates. Thus your monthly outgoing is lowered to larger extent. Then, instead of paying to the creditors, yon can make them the repayments through the company, who will accept low monthly payments from you to disburse it to your creditors.

 

Whichever option you pick up for credit card debt reduction, make sure that you stick with the repayment schedule to avoid falling into another trap.

Bill Smith


When you get into trouble overspending on your credit cards, it may be time to work on reducing your debt levels. Here are some guidelines to reduce debt and bring it to manageable levels.

Budgeting

Budgeting is the best weapon in a creditor arsenal. If your debts are higher than what you earn, chances are, you will be denied for further credit. Get your debt at acceptable levels to qualify for when you apply for a credit card.

Debt to Income

Once you study the debt to income ratio, you will know just how important it is to your debt picture. The debt ratio is the amount of money needed to repay your debt each month and divide it by your take home salary.

Pay yourself first

Paying yourself first is very important to financial success. No matter what, sock away a few hundred dollars in a savings account each month. You and your future are equally important than the money you may be blowing away. It will also help you in times of emergencies.

Snowball the credit cards

When your credit card payment is due, pay more than just the minimum. If you have just received a refund from Uncle Sam, use the refund to pay off your debts and start squeaky clean. So squeeze more than you can each month and work towards paying off your credit cards.

Financial knowledge

Understanding your credit and debt is no rocket science. You do not need an MBA from Harvard for basics like budgeting and debt management. Besides, plenty of resources are available on the internet to help you get started. Do a thorough study on how to reduce debt and work hard towards eliminating debt permanently. Once you pick up the pebbles of financial wisdom, you will soon be able to reduce or eliminate debt and bring your finances under control.

Barry W


Executive Summary We design and deliver the systems, software and services that drive next-generation communications networks. Backed by Bell Labs research and development, we use our strengths in mobility, optical, access, data and voice networking technologies, as well as services, to create new revenue-generating opportunities for our customers, while enabling them to quickly deploy and better manage their networks. Our customer base includes communications service providers, governments and enterprises worldwide. We have three segments organized around the products and services we sell. The reportable segments are Integrated Network Solutions (“INS”), Mobility Solutions (“Mobility”) and Lucent Worldwide Services (“Services”). INS provides a broad range of software and wireline equipment related to voice networking (primarily consisting of switching products, which we sometimes refer to as convergence solutions, and voice messaging products), data and network management (primarily consisting of access and related data networking equipment and operating support software) and optical networking. Mobility provides software and wireless equipment to support radio access and core networks. Services provides deployment, maintenance, professional and managed services in support of both our product offerings as well as multi-vendor networks. Beginning in fiscal 2001, the global telecommunications market deteriorated, resulting from a decrease in the competitive local exchange carrier market and a significant reduction in capital spending by established service providers.This trend intensified during fiscal 2002 and continued into fiscal 2003. Reasons for the market deterioration included general economic slowdown, network overcapacity, customer bankruptcies, network build-out delays and limited availability of capital. We believe that the market for telecommunications equipment has stabilized and is starting to grow in certain areas. The growing demands of enterprises and consumers for additional services tailored to their needs is creating the need for a new convergence of networks, technologies and applications. Required 1. Using the Consolidated Balance Sheets for Lucent Technologies for September 30, 2004 and 2003, prepare a common-size balance sheet. 2. Evaluate the asset, debt, and equity structure of Lucent Technologies, as well as trends and changes found on the common-size balance sheet. 3. What concerns would investors and creditors have based on only this information? 4. What additional financial and nonfinancial information would investors and creditors need to make investing and lending decisions for Lucent Technologies? LUCENT TECHNOLOGIES INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (in Millions, Except per Share Amounts) September 30, September 30, 2004 2003 Assets Cash and cash equivalents $ 3,379 $ 3,821 Marketable securities 858 686 Receivables 1,359 1,511 Inventories 822 632 Other current assets 1,813 1,213 Total current assets 8,231 7,863 Marketable securities 636 — Property, plant, and equipment, net 1,376 1,593 Prepaid pension costs 5,358 4,659 Goodwill and other acquired intangibles, net 434 188 Other assets 928 1,608 Total assets $ 16,963 $ 15,911 Liabilities Accounts payable $ 872 $ 1,072 Payroll and benefit-related liabilities 1,232 1,080 Debt maturing within one year 1 389 Other current liabilities 2,361 2,393 Total current liabilities 4,466 4,934 Postretirement and postemployment benefit liabilities 4,881 4,669 Pension liabilities 1,874 2,494 Long-term debt 4,837 4,439 Liability to subsidiary trust issuing preferred securities 1,152 1,152 Other liabilities 1,132 1,594 Total liabilities 18,342 19,282 Commitments and contingencies 8.00% redeemable convertible preferred stock — 868 Shareowners’ Deficit Preferred stock—par value $1.00 per share; authorized shares: 250; issued and outstanding: none — — Common stock—par value $.01 per share;Authorized shares: 10,000; 4,396 issued and 4,395 outstanding shares as of September 30, 2004,and 4,170 issued and 4,169 outstanding shares as of September 30, 2003 44 42 Additional paid-in capital 23,005 22,252 Accumulated deficit (20,793) (22,795) Accumulated other comprehensive loss (3,635) (3,738) Total shareowners’ deficit (1,379) (4,239) Total liabilities, redeemable convertible preferred stock and shareowners’ deficit $ 16,963 $ 15911

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Andrew Bicknell


Nothing can damage your financial future quite like debt can. Unfortunately millions of people find themselves falling deeper and deeper in debt every year. This not only affects their ability to pay for daily necessities but also plan for the financial future of their families. A debt reduction program can help if paying back borrowed money is hanging over your life like a dark cloud.

The first question most people ask is “Where do I start?” because getting started is usually the hardest part. A majority of those with loads of outstanding debt don’t even know where all their money is going; they just pay the minimums, if they can, as the bills keep rolling in each month. There is that sinking feeling that it’s out of control but until they look at it closely they really don’t know how much is owed and to whom.

Getting organized is the first step to killing the debt burden that looms over everything you do. Get a pencil and a piece of paper and make a list of all your creditors. Make sure you get all of them, everything from your mortgage or rent, to car loans, credit cards, back taxes, medical bills, and student loans. Then write down the outstanding balance for each account, along with the minimum payment and the amount of interest being paid each month. Now add up each column and write the total at the bottom. This is where all your money is going, and if you’re like a good majority of Americans it probably isn’t a pretty site.

Now you can start prioritizing which debts to pay off first. There will be some that require immediate attention and some that can be set aside with only minimum payments being sent. Immediate needs include mortgage or rent payments, necessary utilities, car loans and insurance, and any taxes or liens that may be posted against you or your property. Other debts such as credit cards or student loans can be put on the back burner. In fact a student loan can be put on hardship deferral. This means you won’t have to make any payments for 6 months to a year which gives you the opportunity to get caught up on your more important debts.

The second thing listing out your debts will do is allow you to see if all those payments fit into your monthly budget. If you can squeeze enough out of each month’s budget to make all those payments and if you can stick to that budget then you can start the process of paying them down. If you can throw a little extra at one debt in particular each month you can speed up the process. From a purely emotional stand point paying off the smallest debt first and working your way up may work best. Once you see progress it becomes much easier to stick with a plan.

If your debt is more then your budget can handle then it might be time to start looking at some sort of debt consolidation agency to help you build a plan that works for you. These companies will negotiate with your creditors to obtain better interest and payment terms on your current debt. Be sure to do complete background checks on these debt reduction companies and look for testimonials from satisfied customers. Be careful not to waste your hard earned money on something that sounds too good to be true. It probably took quite a bit of time for you to get into debt; it will take time and patience to get out of it as well.

James Banks


There is no doubt in anyone’s mind that getting deep into debt is a very stressful time. For one, the mind of the debtor is troubled and filled with worry about how he will be able to pay his bills and adequately address his basic needs at the same time. He could also be thinking of how he will be able to provide for his family’s needs given the financial condition that he is facing.

And then, there is the feeling of insecurity and paranoia that could be plaguing him. He is often wary of answering the knock on the door or picking up the phone when it rings; the person on the other side of the door or on the other line could be a creditor’s agent who came to collect for payment that the debtor cannot deliver. Maybe he could not bear to look at other people’s eyes anymore out of fear of finding out whether or not they whisper behind his back about the debt problem he is facing and how “irresponsible” he is.

In the process of making good the payments due to them, creditors and collectors alike sometimes forget that the debtor is a human being, subject to being hurt, humiliated and bewildered by the financial trouble he is facing. That is why there are Christian debt reduction agencies around. They aim to address debt reduction in a more humane way.

Christian debt reduction agencies are non-profit companies certified and recognized by Christian churches and Christian debt organizations. These Christian debt reduction companies claim that their methods and services are based on Biblical principles. They do not just aim for debt reduction; their end goal is to get their clients to rebuild their creditability.

Another trait that sets Christian debt reduction agencies apart from other debt settlement companies is that Christian debt reduction companies try to dig the reason behind the accumulation of debt and attempt to help their clients get over it. They understand that compulsive and irresponsible spending is not always the reason why debtors get deep into debt. The debt could be a result of the client losing his job, getting an illness or accident that forced him to stop working for a long period, or if there is a sudden death in the family that the debtor was not prepared for.

Because Christian debt reduction companies are non-profit organizations, oftentimes they charge lower monthly payments at a reduced percentage of interest. Also, the client usually has the option to settle this monthly payment at any day he can make it, without worrying about facing late payment penalty fees or over-limit charges. Christian debt reduction companies also try to work out a reduction of debt of up to 50% to 70% from their client’s creditors in behalf of their client. Once terms have been reached in negotiation, the period for debt settlement often takes three to six years.

For the downtrodden debtor who is tired of being hounded and gossiped on, going to a Christian debt reduction agency is a more humane and a more welcome alternative.

Check these links to learn more:



http://www.commercialdebtcounseling.com

http://www.commercialdebtcounseling.com/business/business-y/business-index.shtml

Preston Hill


Debt relief is a serious problem for most Americans. We live in a society where everyone wants the coolest gadgets, a nice car and a nicer house. There’s nothing wrong with that. Unfortunately, the good life that you’ve worked so hard to achieve is not free, nor does it come cheap.

If you earn any sort of a decent salary, then chances are you’ve got student loans to pay off. Education is probably one of the most expensive debts that most people will ever have. The cost of your first car is more often than not, considerably less expensive than your student loans.

So, you’ve got debt. Nearly everyone has debt, but that doesn’t make it any easier to live with. And, if your debts are starting to exceed your income, then you’ve got a real problem that can keep you up nights on end without sleep.

You need to do something about it. And you need to do something about it right now. Today!

Have no fear, you and I are of a similar kind. We know that the best way to live a good life is to have more money. But what is not obvious, is that we also need to spend less.

Really, it’s not the little stuff that knocks your budget out of whack. Time and time again, I’ve heard of people trying to budget by cutting back on a café latte’. That latte’ at $5 a whack, twice per day is $3, 650.00 per year. That may seem like a lot, but not so much as compared to new $20,000 car.

Which one is going to hurt you the most? The latte’ or the car at 9% interest. After 4 years, the car is going to cost you an additional $4,000 in interest or $24,000.

My point is, that no matter how much the gurus bombard you with the idea that you need to cut every corner, stop buying bottled water, eat peanut butter sandwiches and stop eating out. The effect is negligible compared to making the big purchases, such as cars, houses and taking education loans. You can save getting a better rate on auto or mortage loans. Also, if you have kids in college, before you take that student loan, seek scholarships first.

So what can you do?

1. Check your credit rating first to make sure that there are no errors on your report. Everyone in the USA is entitled to one annual free credit report. Also, if you are turned down for a credit card, you can get a free report. http://www.ftc.gov/freereports

2. Get all your expenses into an excel spreadsheet and add them all up. First add up the monthly payments, then on a separate sheet, add up the total amounts of each debt. How much is required to pay them all off?

3. Gather up all your credit cards are start calling the banks to see if you can get a reduction in interest rates. Sometimes simply asking will help. You never know until you ask.

4. Create a list of just your credit cards and loans. Make a decision to pay off either the largest balance or the highest interest rate. We start with the credit cards because they typically have the higher rates.

5. Pick one card or loan payment at a time to attack. You can make minimum payments on the other cards that you did not select to payoff. Yes, interest will accrue on the others, but you have a plan. You will double your payment on the one loan that you have selected to payoff early. For credit cards, take all the money saved from paying the minimums on the other accounts and put that money on the one you want to attack. This may seem radical but it works! This is an extremely powerful method for reducing debt.

If you decide to tackle your mortgage, then you must be aware that some mortgage companies require that you fill in the payment blank explicitly telling them how much extra goes to the principle. If you do not answer this question, they may put the extra money into an escrow account which gains no interest and is not applied to reducing the mortgage debt.

6. Stop making unnecessary credit card charges. Don’t pay for groceries or McDonalds using credit cards. Use cash for McDonalds and debit cards for groceries. You can have that latte’, but you should use cash to pay for it.

7. Take all the cards but two, one for yourself, and one for your spouse and put them in a box. Don’t cut them up or close the accounts, as some people are saying. The reason being is that your credit score reflects your “total available credit.” So, if you start closing accounts, you reduce your available credit, which hurts your credit score. We are trying to help your score, not hurt it.

8. Transfer balances for higher rate cards to lower rates. If you receive an offer for 0% for six months and you’ve got a card at 20%, then make the transfer. However, be careful to find out what is the normal rate for the 0% card. The normal rate needs to be lower than the higher rate card or you may find yourself stuck in a worse situation. 9% is a decent normal rate. Do your homework.

9. Become a bargain hunter. Don’t settle for paying retail prices. The internet is a great place to find bargains. Also, the Sunday paper can help you with coupons and other great deals. Don’t ever walk onto a car dealership without first visiting their website and viewing their clearance vehicles. Go the kbb.com and find out what your trade-in is worth before you start negotiation. Don’t let the big purchases bite you.

10. Do not borrow against the equity in your home. There are lot’s of great deals out there. Maybe you’re thinking about a new kitchen or a swimming pool. Don’t do it. When you decide to sell your home, your going to take one in the shorts. You’ll never get that money back when you sell your home. Brokers are typically going to charge you about 6% to sell your home, on a $200,000 home, that’s $12,000. That comes straight out of your pocket. Real estate values all across the country are on the decline. There are too many new houses on the market and the market is in constant change. Even though the interest on home equity loans is tax deductible, don’t borrow against your home for any reason. You need to maintain your equity.

Try these tips before going to a debt counselor. Most debt services will reduce the amount of your loans but at a terrible cost to your credit rating. Generally, it takes about 7 years to remove bad credit from your report. It takes 10 years to remove a bankruptcy. Most agencies provide very little in the way of actual debt counseling. What they provide is debt relief by negotiating with the same credit card companies who pay them. Becoming debt free is not easy, but if you will follow these tips, and pick one credit card or loan to attack at a time, you can truly become debt free in three to five years. Good luck and best wishes.

Carrie Reeder


Acquiring too much debt can put a major strain on a household. To eliminate debt, many people consider bankruptcy. With the new bankruptcy laws, it has become difficult for some people to eliminate debt. However, many will continue to qualify for bankruptcy protection. The effects of bankruptcy are long term.

Before considering bankruptcy, it helps to explore solutions to debt elimination. Here are three tips that can help reduce debts.

Limit Credit Card Use and Pay More than Minimums

People file bankruptcy with varying credit amounts. Some have acquired over $10,000 of credit card debt, whereas others only have about $2,000. Individuals with small debts can usually payoff the balances without bankruptcy. However, these persons must be willing to make sacrifices.

If attempting to eliminate debt, stop using the credit card. Paying only the monthly minimum, and then going on a shopping spree defeats the purpose. Before you can successfully eliminate credit card debts, you must commit to using cash for all purchases. Additionally, the majority of minimum payments barely reduce the finance fees. To notice a significant reduction, endeavor to pay the minimum payment, plus an additional $50 - $100.

Negotiate a Lower Interest Rate

If you have maintained a good payment history with a credit card company, attempt to negotiate a lower interest rate. When contacting the credit card company, highlight your history with the company such as length of credit account, payment history, etc. If your credit is good, the company may consider a reduction. Before approving the request, you must consent to a credit check.

In addition to evaluating your history with the company, they will also assess whether you maintain a good payment record with other creditors. If your credit score is low, it may require the help of a debt consolidation agency to convince creditors to lower interest rates.

Once your credit card interest rate is lowered, you pay less finance fees. Thus, a larger portion of your monthly payments will help reduce the outstanding balance.

Consolidate Debts with a Home Equity Loan or Refinancing

Owning a home provides a huge advantage. Homes increase in values, thus they gain equity. As a homeowner you have the option of tapping into your home’s equity. Through a home equity loan or refinancing, you have the chance to get hold of a lump sum of money that can be used for different purposes. One such purpose includes debt consolidation.

Muna wa Wanjiru


There are many ways that a person can get into debt and also get out of debt. In order for you to make sure that you don’t get into trouble with mounting debt you will need to start taking steps. These steps will be along the lines of debt reduction. The various free debt reduction sites will be able to help you with this question.

The first step that you need to take is to look at free debt reduction sites that can offer you valuable and valid help. When you find these sites read the information that is provided for your benefit. Once you have understood what is given – information wise that is – you should see how you can follow through with these instructions.

Before you start looking at various free debt reduction tools that you can find on the internet you should take a good look at your finances. The best way to achieve this is to list the total amount of money that you make in a month.

From this amount you should then note down the money that is taken for various government purposes. The end result of this will be a figure. This final figure is the amount of money that you have to use for all of your expenses including that of paying off your debts.

To make sure that you know what your debts are you should list them in another section. The amount that you need to pay each month should be listed. At this point you are probably asking why you should be keeping this money set aside. For your free debt reduction plans and tools to work you need to have this money amount set aside.

The remainder of the money that you have should be figured out so that you can pay your monthly bills and buy the food and other necessities you need. Of course as these items are very important you should make sure that you have this monthly amount noted down.

The balance money that you have can then be divided so that you can see to whom you will be paying off. The main point most of the free debt reduction sites will show you is that keeping your debts unpaid will only hurt you in the long run. The longer amount of time that you wait to pay this amount the higher the debt will be.

For this reason once you have found out what you can afford to pay you should see if you can use any of the free debt reduction tools like a debt reduction calculator. These items will provide you with some help at the times that you really need it. While there are many sites that will tell you how you can increase your monthly budget to help reduce debt, free debt reduction sites provide you with the peace of mind that seeing your debt get reduced can give.