…but first, here’s the single most important reason why you NEED to be out of debt:
This graph shows you why you need to be debt free. This allows you to
be able to plan for a successful financial future through investing. If
you do not, chances are high you will need to work during your “Golden
Years”.
Creditors structure your debt and payments so you will stay in debt
and so you will be paying them as long as possible. The longer you are
paying them, the less you are investing for your own retirement. These
days, Social Security is under-funded, thousands of corporate pension
plans are bankrupt or severely underfunded, and corporate security is a
dying myth. You need to take care of yourself – and for that, you need
time for your wealth to compound itself, to grow.
So you are able to save as much as is needed for you to reach your
retirement goals, getting out of debt is your first step. Ten years
from now, will you be debt free, with your investments growing and
working for you? Or will you still be making payments, wishing you could
get ahead? Creditors want you to stay hopeful, so you will keep paying
them – but take a look at the last few years. Have you paid down your
debt load substantially? Or has your debt steadily increased over the
years, and even though you keep paying and paying, you are still not
getting ahead?
The options to get out of debt are:
Pay the minimum / stay in debt: Just
keep making the minimum payments and hope you can stick it out. When
creditors call offering some token “assistance” program you take it, but
it won’t really help – it will just make the creditor more money.
Upside: Feels most comfortable to you. “Looks” like the cheapest way out.
Downside: You’re giving up your retirement and staying on the debt
treadmill… you are running faster and faster, but not getting anywhere.
Credit Counseling: This program was invented by the credit card companies. In it, you’ll repay all the debt + interest.
Upside: None, really, except the calls will stop – because the creditors want you to take this option.
Downside: You’ll pay back all the debt plus interest. Is that relief
to you? You will have credit damage with payments that may be higher than what you currently pay. In the end, you
might get the same results as our program, except you’ll spend more to
get it – a lot more. Creditors push this program because they make more
money off you.
Bankruptcy:Chapter 7 or Chapter 13…. Most bankruptcy's are converted to chapter 13, by which you’ll have to make
repayments for five years.
Upside: You’ll be debt free if you can file Chapter 7, but most
people cannot. If you file Chapter 13, you’ll also be debt free, but it
will take at least 5 years to get there and then your credit report
still shows a bankruptcy.
Downside: Permanent public record. Thousands in legal fees. The
court custodian will dictate how you spend your money and if you
disobey, may throw out your case. You will not be able to obtain certain
home loans or business loans for life. Credit damage can last for
approximately 11 years.
Debt Consolidation Loan:Roll all your debts into one big new loan, possibly into your home loan.
Upside: If you can get one, and then can afford all the payments, this may be a good solution.
Downside: Almost nobody can get one anymore. Also, in cases of
mortgage refinancing the loan replaces low-risk unsecured debt with
high-risk secured debt. Prior to a consolidation, if you default on your credit cards,
the credit card creditor complains by making a bad mark on your credit
report, but that’s about it (other than risk of lawsuit which is
uncommon). After a consolidation, if you default on your home loan, you will go into
foreclosure. Most of this is a moot point, simply because these days,
very few borrowers can even qualify for a consolidation loan. If you do manage to
qualify, you’ll pay thousands in fees (for home refinancing) and repay
all the debt.
"Debt Eraser USA"
Upside: Lowest overall cost of any program except Chapter 7 Bankruptcy.
However, qualifications for bankruptcy have become tougher, most may not
qualify and some may still be asked to try an alternative method of
getting out of debt before bankruptcy.
Downside: There is no Downside!
And having GOOD CREDIT starts in just a few minutes from now...
