Have your bills gotten so out of control you don’t know which way to turn? Are things so bad you’re about to freeze your credit cards in a block of ice, cancel your Netflix subscription and swear to never eat out again?

These things could certainly help but most experts say that if your goal is to pay off your debts, you need to have a more comprehensive plan. One of the most popular of these is debt consolidation, where you roll all your debts into a single loan.

Debt consolidation can feel very helpful because it would make your debt feel more manageable. However, it’s not a panacea or an ideal solution for everyone. It works best if you have high-interest-rate debts like credit cards. A study done by NerdWallet last year found that U.S.households with credit card debt owed an average of $16,748. If you owe this much or more – at high-interest rates – then debt consolidation might be a good option. But there are for secrets you need to know to do it successfully.

1. Secret #1: Have a realistic budget

The most basic type of budget has three critical parts. They are money for debt payments, contributions to retirement savings, and money for an emergency fund. However, if you want to have a successful budget you need to avoid adding additional debt by including money for infrequent expenses, such as your car licensing fees. It’s also important to include money to cover those times of the year when expenses get high, like the holidays.

You also need to leave some money for fun. The mistake many people make is to cut their spending down to practically nothing for so long that they then go out and do something extravagant. To have a realistic budget means leaving enough money available to spend on those things that you love and value.

Secret #2: Stop using your credit cards

One of the most cardinal rules of debt consolidation is to stop using your credit cards while paying off your debts. You could cut them up, stash them away, or freeze them in ice. These may seem like extreme methods but they can be effective. You should also write down why you want to be debt-free and how often you will make payments. Set periodic reminders to check your progress.

However, don’t make the mistake of closing your credit card accounts. This will only damage your credit score. In fact, you need to put a small charge on one of your cards every few months, and then pay it off on time and in full. This is to keep the account active.

Secret #3: Be sure to compare options

Some of the balance transfer cards give you as much as 15 to 21 months interest-free – after which you will be charged a double-digit interest rate. Most of them also charge balance transfer fees and you’ll need a good credit score and a high income to qualify. If you think you’d like to take advantage of one of these cards you can increase your chances of qualifying for one by adding up all of your potential sources of income. This should include the money in your 401(k) and in your savings account. Then, list this amount on your application instead of just your salary.

Personal debt consolidation loans generally have lower interest rates than credit cards and let you borrow more money. Your interest rate will depend on your credit score and how much debt you have. The way this works is that the lender will send the money directly to your creditors, which removes the temptation to spend it instead of using it to pay off your debts. However, only some lenders – such as Wells Fargo, Discover, and FreedomPlus – offer this option.

Just be sure to check out all possible debt consolidation options before selecting one.

Secret #4: Enlist some moral support

You may find it hard to talk about your debts with family members or friends, but getting support from your peers can be a powerful motivator.

Support groups are available on the Internet, or you might use some close family members to help keep you on track in achieving your goal of being debt-free. Online lenders like Payoff and Prosper will even provide tailored recommendations and apps to help you stay motivated.

In summary

Debt consolidation can be a powerful tool for getting your debts paid off. But make no mistake about this. It takes time and more than a little self-discipline. Develop a realistic budget, put those credit cards away, check out the various debt consolidation options available, and be sure to get some moral support. Do this, and you should have no problem achieving your goal of being debt free.

Have you seen any of those ads titled, “Get Out of Debt today,” “Get Out of Debt Fast, or “ Debt Relief Now!”?

Those ads probably seemed very inviting. I mean, who wouldn’t want to get out of debt fast?

These ads are promoting a debt consolidation option called debt negotiation or debt settlement. Yes, this can be a way out of debt, but it’s important to know what’s true about it and what isn’t. A lot of half truths and outright lies exist about debt negotiation, and here are five you need to be aware of before choosing it.

1. You can get credit card debts reduced just by asking

This would come under the category of total lie. No credit card company will agree to settle a debt just because you ask. You need to be having a serious financial emergency. What’s a serious financial emergency? It could be that you just went through a divorce and got stuck with all the debts, had an expensive hospital stay, or lost your job. You may be asked to document that emergency, so be prepared with the appropriate paperwork. The thing is credit card companies just don’t want to settle unless there’s a good reason, which would be that serious financial emergency.

2. Debt settlement will not damage my credit score

Here’s another one in the category of outright lies. Debt settlement will definitely damage your credit score – maybe by as many as 80 points. It will also have a long-term effect as those settlements will stay in your credit reports for seven years. Lenders will see you settled your debts instead of paying them off in full and will be less likely to offer you credit. Also, credit will cost you more because you’ll be charged higher interest rates.

3. You have to use a debt settlement company

We would call this one a half truth. Nothing says you have to use a debt settlement company. You could settle your debts yourself. But most people choose not to. Two big reasons for this exist. First, using a debt settlement company eliminates the need to save up enough cash to make the lump sum payments required to settle debts. Second, negotiating with credit card companies is tough and takes a lot of time. It’s just much simpler and easier to let a professional debt settlement company handle the negotiations for you. Plus, it’s almost certain a professional settlement company will negotiate better settlements then you could yourself.

4. It doesn’t cost much to use a debt settlement company

This one falls in kind of a gray area. It’s not a total lie nor is it the total truth. Reputable debt settlement companies usully charge a percentage of the amount of debt being settled. This typically ranges from 15% to 25%. If you owe, say $30,000, you’ll probably be charged the full 25%. This mean yes, it will cost a lot to use a debt settlement company. But suppose you owe $15,000 and are charged the 15%. This would cost you $2250. If the company were to get that debt cut down to $7500, you’d save a total of $5250, so it isn’t really costing a lot to use a debt settlement company.

5. If I don’t settle a debt, it will stay in my credit report forever

We rate this one a half truth. That’s because debts that were settled will stay in your credit reports for seven years but not forever. They will also grow less critical as time goes by. If you did have that $15,000 in debt settled, it would definitely be a black mark for the first several years afterwards. Lenders would see you had settled your debts instead of paying them off in full and would be less likely to give you credit. When you did get new credit it would cost you more in the form of higher interest rates. Four or five years after your settlements they would have less of an impact, especially if you had stayed current on your debts and had not missed any payments during that time.

6. Debt negotiation will get me completely out of debt

We will rate this one a half truth because debt negotiation may get you completely out of debt. The problem is it might not. Unfortunately, some debts just can’t be negotiated. This includes student loan debts, automobile loans, mortgages, and other secured debts. And some lenders simply won’t settle regardless.

In summary

Debt negotiation can definitely be a path out of debt. However, before you sign up with a debt settlement company, it’s important to consider the half-truths and total lies you’ve just read. You should now be in position to make an informed choice as to whether this is for you or you need to find another way to deal with your debts.

Stuck under a big pile of student loan debts? One thing is for sure, and that’s your not alone. According to Federal Reserve data, 37 million Americans have student loan debt. And 14% of outstanding borrowers have at least one past-due loan. And 86% of the people who took out federal student loans owe an average of $28,000.

What can you do if you all $28,000 or even more, here are seven tips that could help you tame that savage beast of student loan debt.

1. Begin saving during the grace period

If you have federal Perkins loans, you may not have to make any payments for nine months. The grace period on federal Stafford loans is six months. Private loans have grace periods that vary. This means you will need to check this with the company that services your loans. It’s also important to use your grace period wisely. Look at all the various repayment options and determine what you can really afford. There’s an online student loan calculator you could use to determine how your budget would be affected by different repayment plans. You should also start making imaginary student loan payments to your savings account. This will help create space in your budget for your loan payment. And it will help you build up an emergency fund.

2. Change to an income-driven repayment plan

The federal government offers five income-driven repayment plans. They represent a way to link your payments to your income so if your income stays flat, your payments stay relatively low. Of course, if your income increases, so will your payments. The best of the income-driven repayment plans are REPAYE (Revised Pay As You Earn) and PAYE (Pay As You Earn).

Both these plans cap your monthly payments at 10% of your discretionary income. For example, your net income could be $2000 but if your discretionary income was just $500 a month, your payments would be $50.

The only real difference between these two programs is that with REPAYE, your monthly payments are capped at a flat 10% of your discretionary income. With PAYE, your payments would be 10% of your discretionary income but no more than what they would be under the standard 10-year repayment plan.

3. Sign up AmeriCorps or get a public service job.

If you signed up to teach for a year in AmeriCorps, you learn about $5,645 toward your loans, Certain public service certain jobs exist where if your total debt when you graduate is less than your annual starting salary, you should be able to pay off your loans in roughly 10 years. These jobs include firefighter, public librarian, public university professor, public school teacher, and working for a non-profit organization.

4. Be smart about your payments

If you’re smart about your payments it’s possible to get your loans paid off quicker and save a lot of money. One way to do this is through your direct debt. This is where you have your monthly loan payments automatically paid out of your checking account. This ensures you’ll never be late with your payments and many lenders will give you a small interest rate deduction When you do this, the deduction is not huge – typically 0.25% Or 0.50% – but even small bits help. You should also do as much shopping as you can on the Sallie Mae site as this will earn you cash rewards towards your student loan debts. We know of one smart shopper that got $300 in rewards one year by using grocery coupons and booking travel through the Sallie Mae site. That’s the equivalent of one payment a year.

5. Be cautious about consolidating

You might be able to save money by consolidating on your federal student loan debts into a Direct Consolidation Loan. The interest rate on these loans is the average of the interest rate on your current federal student loans rounded up to the next ⅛ of a percent. Plus, you would have only one payment to make a month – in place of the multiple payments are currently making – which should make your financial life simpler.

An option would be to get a debt consolidation loan from a private lender. Even with the Fed’s coming interest rate bump, the interest rate on a private consolidation loan should still be very low.

However, student loan debt consolidation does have downside. Keeping your loans separate offers the opportunity pay down several small loans all at once, instead of having to make one large payment a month towards one big loan.

In summary

The objective of this information is of these tips is to help you avoid defaulting on your student loan debts. Defaulting on a student loan debt is a very bad thing. Even though it’s an unsecured debt, it can’t be discharged through bankruptcy. The government can and will garnish your disposable pay and without getting a court order. It can intercept your tax refunds and even take a cut out of your Social Security. You can run away from your student loan debts but you can’t hide. The federal government’s debt collectors will eventually find you. There is just no benefit to defaulting.

Debt negotiation can be a good path to debt relief as it represents the only way to get debts reduced. Some people have negotiated their debts down to as little as forty or even fifty cents on the dollar. Professional debt negotiation companies can often do as well or better although they do charge for their services. This means you would save less than if you were to handle the negotiations yourself.

Of course, before you jump into debt negotiation it’s important to understand what it’s all about. So, can you correctly answer at least five of the following six questions?

1. Which debts can be negotiated?

A. Auto loans
B. Credit card debts
C. Federal student loan debts

2. DIY debt negotiation requires:

A. The cash required to make lump-sum payments
B. Strong negotiating skills
C. The ability to make your minimum payments

3. How much does DIY debt settlement cost?

A.Usually about $1000
B. Nothing
C. A flat fee of $500

4. I would be a good candidate for debt negotiation because:

A. I have $20,000 in credit card debt
B. A high credit score
C. I can’t even make my minimum payments

5. A reputable debt negotiation company will never:

A. Charge an upfront fee
B. Contact you first
C. Fail to provide an estimate of about how much money you will save

6. Debt negotiation and your credit:

A. Debt negotiation will have little or no effect on my credit
B. Debt negotiation will have a positive effect on my credit
C. Debt negotiation will have a negative effect on my credit

The answers

1. Which of these debts can be negotiated?

The answer to this is B. Credit card debts can be negotiated because they are unsecured debts. Auto loans are secured debts and can’t be negotiated. While federal student loan debts are unsecured debts, they cannot be negotiated due to federal law.

2. DIY debt negotiation requires:

Both A. and B. are correct. If you choose DIY debt negotiation, you’ll need to be able to offer lump sum payments to settle your debts. Otherwise, lenders won’t negotiate with you. Strong negotiating skills are also required in DIY debt negotiation because your opponents will be skilled and tough negotiators.

3. How much does DIY debt negotiation cost?

If you answered C or Nothing, go to the head of the class. Negotiating your own settlements doesn’t cost anything because you do all the work. You will need to contact each of your lenders, find someone with the authority to negotiate with you, and then make your initial offer. It’s unlikely it will be accepted so you can expect a lot of back-and-forth before you arrive at a number that’s acceptable to both you and the lender. In short, DIY debt negotiation can be complicated and time-consuming.

4. I would be a good candidate for debt negotiation because:

The answer to this question is C — that you can’t make even your minimum payments. The fact that you owe $20,000 in credit card debt doesn’t make any difference if you can make the minimum payments. And mortgage payments can’t be negotiated.

5. A reputable debt negotiation company will never:

This one is a little tricky because the answer is all of the above. No reputable debt negotiation company will ask you to pay an upfront fee, nor will it contact you first by – or email. In fact, the FTC has made upfront fees illegal. A trustworthy debt negotiation company will provide you with an estimate of roughly how much money it can save you, as well as how long it will take to settle your debts.

6. Debt negotiation and your credit:

Did you answer C, that debt negotiation will have a negative effect on your credit? Then, you are correct. Debt negotiation will negatively impact your credit two ways. First, it will drop your credit score dramatically. Second, if your lenders report your debts to the credit bureaus as settled, they will stay on your credit reports for seven years. Lenders will see you failed to pay back your debts in full and will be less likely to grant you credit.

In conclusion

Were you able to correctly answer at least five of these six questions? Then, debt negotiation could be for you. But if you were unable to answer most of them correctly, you need to do some homework before choosing this option. If not, you might end up in more trouble than before you chose it.

It’s now possible to get balance transfer cards with as many as 18 or even 22 months interest-free. If you’ve racked up a lot of credit card debts, then transferring your balances to one of these cards could be a great way to consolidate your debt. Plus, you’d have all those months interest free to repay or at least pay down your debt. But important things exist you need to know before you rush off to apply for one of these cards.

It’s not the same as paying off your debts

There are definite benefits to transferring your credit card debts to a 0% interest balance transfer card, but it’s not the same as repaying your debts. All you’re really doing is moving one set of debts to a new card. Here’s an example of what this could mean. Let’s suppose you’ve been paying 13% interest on a $2000 credit card debt. In this case, you’d have to pay $347 monthly for 6 months to repay the debt. However, if you transfer that $2000 to a 0% interest card your payments would be just $334, a savings of $77 in interest. This means the only real benefit from a balance transfer is the money you’d save over the long haul – assuming you repay your entire balance before your introductory period ends.

It would make your financial life simpler

It can be tough trying to keep track of multiple payments that are all due on different days of the month, and that have different minimum payments. Transferring their balances to a new, 0% transfer card would mean remembering just one payment a month. This should definitely make your financial life simpler.

You’ll be charged a fee

You’ve probably heard the old expression that there is no such thing as a free lunch. Balance transfers aren’t free, either. You will almost certainly be charged a balance transfer fee, which likely will be a percent of the amount you’re transferring. In the past, transfer fees were capped but this is no longer the case. A typical fee this year is 3%. This means if you were to transfer $10,000, you’ll immediately be charged a $300 fee. You’ll need to calculate how much interest you’d save versus this fee to know if the balance transfer would really make sense.

That great 0% interest rate will expire

Unfortunately, that great 0% interest rate won’t last forever. It will eventually expire. This could be six months, 18 months, or even longer. But at some point, you will see your interest rate jump up, probably to something like 12% to 18%. If you haven’t paid off your balance before your introductory rate expires, you could end up paying more interest than before you made the transfer. Also, if you are late in making a payment or miss one, that great 0% interest rate will evaporate, and you’ll automatically be charged the higher rate.

Be careful with new purchases

That 0% introductory interest rate may not apply to new purchases as they may not be interest-free. Be sure to read the fine print as the rules of some credit cards stipulate that just the balances you transfer will qualify for the 0% rate, while new purchases will be charged the regular APR. Other cards will apply the 0% interest rate to new purchases, but maybe for just the first six months.

You could transfer other debts

One of the common misconceptions is that you can only transfer credit card balances. The fact is you may be able to transfer loans for appliances, cars, furniture, and other monthly installment payments. The way this is done is by using checks from the bank that issued the balance transfer card.

Determine how payments are allocated

Here’s where things get a bit complicated. If you have a 0% interest on the debt you transferred and an interest rate on new purchases, you can’t tell the credit card company how to apply your payments. The credit card issuers are required by 2009’s Credit CARD Act to first apply anything above the minimum payment to the debt that has the highest interest rate. However, most credit card companies will first apply the total minimum payment to the debt that has the lowest interest rate. This could lengthen the time it takes you to repay the debt, so the best idea is probably to steer clear of using the balance transfer card for new purchases.

You need good credit to qualify

Balance transfer cards are widely available, but the ones with the really great terms are available only if you have good or excellent credit.

In conclusion

Transferring credit card debts to a new one with 0% interest for some period of time could save you significant money – but only if you qualify. But if you can get one, that could be a great way to save money and get your debt paid off sooner, meaning it might be your best option.

No one knows for certain how many people chose debt negotiation last year, but it’s clear that it has become one of the top ways to manage debt. There are two reasons for this. The first is that debt negotiation is the only way to get debts paid off for less than their balances. The second is that it’s a sure way for people to achieve debt relief in just two to four years.

The way debt negotiation works is simple — at least in theory. It’s just contacting a lender and offering a lump sum payment for less than the debt’s balance. If the lender accepts the offer, you send the payment, and the lender treats the debt as paid in full.

If you decide that debt negotiation is for you, there are mistakes people commonly make that you need to avoid.

Not understanding which type of debt you have

There are two types of debt — secured and unsecured. It’s important to understand which type you have. Secured debts are those where you were required to put up some type of collateral to get the loan. The two most common types of secured debt are mortgages and auto loans. These debts cannot be negotiated.

Unsecured debts are where you were not required to put up any collateral. Credit card debts, medical debts and personal lines of credit are all unsecured debts. These debts can be negotiated.

Misunderstanding your creditor’s weaknesses

Whether your debt is secured or unsecured, your lender has weaknesses. The first is that it may be subject to collection laws. For example, if you’re trying to negotiate with a collection agency, it must adhere to rules set down in the Fair Debt Collection Practices Act (FDCPA). While creditors are not subject to this law, many states have similar laws governing debt collection practices.

A second weakness is that it costs a lot of money and time for a creditor to sue you. This is the last resort as creditors know this, plus they could sue and still not collect any money.

Unsecured creditors know if they push too hard you could fill for bankruptcy, and they would then get nothing.

Failing to understand the creditor’s strengths

Secured creditors have the most strength because they could repossess something of value like your automobile.
While unsecured creditors can’t repossess anything, they do have other positions of strength. They can harass you with letters and phone calls and they can sue you for breach of contract. Some will even file suit while you’re negotiating with them. If a creditor files suit and wins, it can garnish your wages and even take money out of your bank accounts.

Using the wrong money

Cash is king in debt negotiation. Creditors are more likely to settle quickly and for less money if you can immediately transfer funds to them. However, don’t use your equity in a secured property to pay off an unsecured debt. For example, you shouldn’t use the equity in your home to pay off credit card debts. Also, don’t use your retirement funds to pay off debts. Do this and you’ll pay a big tax on the money you withdrew, or you’ll need to find some way to pay back the funds very quickly.

Paying more than necessary

Another common mistake made in debt negotiation is paying too much. The secret lenders don’t want you to know is that most unsecured debts are settled for pennies on the dollar. Start your negotiations low with the goal of settling the debt for 50% of its balance. Remember this is an unsecured debt so that the worst the creditor can do is sue you, which it really doesn’t want to do.

Failing to take notes

Debt negotiation usually takes time and is a complicated process. The first customer service representatives you speak with may not have the authority to negotiate with you — regardless of what he or she may say. You could talk with multiple people during the negotiations and even get conflicting information. Always take notes when you talk with a lender. If you can reach a settlement, ask for a letter detailing the amount you will be paying; the customer service representative’s name, email address and phone number (with extension number if appropriate); the date and any other important details. If the customer service rep refuses to provide such a letter, then you must write it yourself, and mail it as registered, return receipt requested.

In conclusion

You could negotiate your debts and save a great deal of money. Just make sure you don’t make any of the common mistakes you’ve read in this article. Understand that lenders have strengths and weaknesses, use the right money, and always take good notes. Do this and it’s almost certain you’ll be successful.

What would you do to get out from under that staggering load of credit card debts? Most people say they’d do almost anything short of committing a crime.

If you feel that you’re drowning in credit card debt, we have kind of good news. It’s possible to negotiate those debts. However, – spoiler alert – it isn’t easy. The credit card issuers aren’t in business to negotiate your debts. Their number one goal is to get paid back every cent you owe. They loan you money via credit cards in good faith – believing you’ll repay them. No bank or credit card issuer is in business to give away money by negotiating debts. That would be a terrible business model.

So, how could you go about negotiating those credit card debts?

It takes three not-so-easy steps.

Step 1: Choose a plan

Don’t even think about contacting one of your credit card companies until you’ve chosen a plan. You have four options.

· Lump sum settlement

· Workout arrangement

· Forbearance program

· Debt management program

· Debt settlement program

There are pros and cons to each of these options. Be cure to research all five before choosing one.

Step 2: List your income and debt

The next step is to take a good hard look at your debt in your income. If you don’t have all your credit card statements, call your credit card companies and ask for a breakdown of your statements. You may find a lot of what you owe is garbage or money you blew in late fees and over limit charges. When you separate these out, you may be shocked to find how much you actually borrowed.

Next, make a list of your income and your spending. You can’t know how much you can realistically afford to pay on your credit card debts until you’ve done this. Break your spending down into two categories – fixed expenses and discretionary spending. Your fixed expenses would include things like your rent or mortgage payment, groceries, insurance premiums, and utilities. These are expenses you must pay first before your credit card debts.

Be sure to build in some wiggle room. If you make your budget too tight, you’re almost sure to fail. Remember that you’ll have expenses that pop up less frequently than weekly or monthly. Your car could need it’s a 3000-mile oil change, your plumbing could back up, or your dog could come down sick. You need to have some emergency money built in your budget to cover these things.

Step 3: Start calling

Now that you know how much you can afford to pay, it’s time to start negotiating. Understand that this will be a marathon and not a 100-yard dash. You’ll probably have to make multiple phone calls to the same credit card company and talk to a bunch of different people. Some of them will even contradict one another. Keep in mind that the credit card companies can and probably will freeze your credit limit after that first phone call.

The first customer service representative you reach will probably not have the authority to negotiate with you – though they may not admit it. Let him or she know you need whatever department handles settlement arrangements, or workout agreements. Every bank and credit card issuer is set up differently, with different department names, policies, and special programs.

When you’re finally able to reach someone with the authority to negotiate with you, write down his or her name and telephone number with an extension. Explain that you need help. Jot down a brief summary of your conversation with the time and date. Keep all of this information together in a notebook.

Be prepared to haggle as this is what negotiating is all about. Begin by summing up your situation. Explain that you’re having a financial emergency. Ask what the credit card company could do or propose your own plan. You may want to use the B word as in bankruptcy. Your ultimate goal should be to get your debts reported as complete, current, and timely.

Last of all, get anything that’s agreed to in writing. This needs to include the fact that the account was paid off (or will be paid off) and when. It also needs to include the amount that will be reported for taxes and what the credit card company will tell the credit bureaus.

In conclusion

Follow the steps you’ve read in this article, and you should be able to negotiate with your credit card companies to get a program that will make it easier for you to repay your debts. Just don’t wait too late to ask for help. You may be well-intentioned but if you don’t take action, you could end up in a financial hole from which you’ll never be able to recover.

There are fewer worse feelings than knowing you’re deep in debt. This will not only mean financial problems, the stress related to it can cause physical issues up to and including heart disease. Yes, heart disease.

The best answer to debt is to pay it off. Of course, you may not be able to do this. You could have lost your job, suffered a serious illness or had some other financial emergency that’s left you living from payday to payday. Or maybe you just made a lot of bad financial decisions. But whatever the case, you’re wondering if you should declare bankruptcy.

A fresh start

There is no question but that a chapter 7 bankruptcy would mean a fresh start – assuming most of your debt is unsecured debts like credit card debts and personal lines of credit. They would be discharged in the bankruptcy so you’d no longer be responsible for them. Another advantage of a chapter 7 bankruptcy is that your wages would be exempt– except for money earned through an inheritance. Finally, it’s usually possible to get through a bankruptcy in three to six months for an even quicker fresh start.

The downsides of a chapter 7 bankruptcy

It’s a different story if the majority of your debt is secured debts such as a mortgage, automobile loans, and student loan debts. None of these can be discharged by a Chapter 7 bankruptcy.

A second downside is that you could have property seized and sold by the bankruptcy trustee to satisfy some of your debts. While you’d be allowed to keep your primary vehicle, you could lose a motorcycle, a boat, a camping trailer and other non-exempt property.

The worst downside is what a bankruptcy will do to your credit, which is trash it. Your credit score will plummet. It will take you several years after the bankruptcy to get new credit, and it will have a very high-interest rate. Your auto insurance premiums will increase. Having a bankruptcy on your credit reports will impact your credit for quite some time. This is because the public record of a chapter 7 bankruptcy will stay on your credit reports for 10 years. You could even lose out on a good job when the prospective employer sees you’ve had a bankruptcy. It’s that serious.

The advantages of debt settlement

Debt settlement will not discharge your unsecured debts as will a chapter 7 bankruptcy, but it can get them reduced substantially. In fact, a good debt settlement firm can often get debts settled for 50% or even 40% of their balances. This means you could end up paying as little as $800 on a $1600 credit card debt.

The second pro of debt settlement is that you’ll have a plan with fixed payments each month. You’ll know in advance how many months it will be before you’re debt-free. You’ll also know how much debt settlement will cost as most reputable debt settlement firms charge a percentage of the amount of debt it’s settling for you. This generally ranges from 15% to 25%. However, most settlement firms don’t collect their fees until they’ve settled all of your debts. This amounts to a 100% satisfaction guarantee since you could drop out of your program at any time, and without paying a cent.

The negatives of debt settlement

Debt settlement will affect your credit score but not as severely as a bankruptcy. Many experts think it will drop your score by around 80 points. While debt settlement will not trash your credit history, it will affect it. When you apply for credit in the future, the lenders will see that you had settled your debts instead of paying them off in full. This could also mean you’ll be charged higher interest rates. If the lenders forgive some of your debts through settlement, this will be reported to the IRS as income, and you will be required to pay tax on it.

In conclusion

The best choice between these two options for most people is debt settlement. It will have less of an impact on your credit than a bankruptcy. You can recover faster from debt settlement, and you’ll be doing a more honorable thing – by paying back part of your unsecured debts.

What do you think of when you hear the term yard sale? You probably think of a bunch of junk sitting on a driveway, where the homeowner raises maybe $30.

Well, as the French would say, au contraire.

You can raise big money for debt negotiation by having a great yard sale, and here’s what you need to do.

12 great tips

Start early. This is a case where the early bird definitely gets the worm. Don’t wait until Saturday morning to start your sale. Start it on Friday. Then, if you still have stuff left over, sell it on Saturday.

Start saving stuff at least six months in advance. If you do this, you’ll not only have more stuff to sell, but you’ll have cleared a lot of the clutter out of your house and garage.

Check first. Does your neighborhood even allow yard sales? Some don’t. Or your town may require a permit. That’s very rare but possible. Do your homework before staging a yard sale to make sure your neighbors won’t complain or that someone from code enforcement doesn’t come by, and tell you to cease and desist.

Don’t be a Lone Ranger. This is a situation where you shouldn’t go it alone. Try to get neighbors involved. They’ll thank you for it, and the more stuff you have to sell, the more successful your sale will be. Think about going door-to-door to get your whole neighborhood involved.

Be sure to check the weather. The last thing you want to happen is to get your stuff rained on. Also, it’s better to hold the sale outside then in your garage. That means more light and space for people to move around and check out your stuff.

Advertising is crucial. It’s vitally important to get the word out. You can make the yard sale signs yourself so long as they’re big enough to read. Test them out by driving by to see if you can easily read them. Make sure your signs include arrows, you address, and maybe even your phone number. Be sure to post your sale on Craigslist and sites such as YardSaleSearch.com. Be sure your advertisement includes a list of highly sought after items like electronics, furniture, collectibles, and brand name stuff.

Group stuff together. Arrange your items in classifications like clothing, books, toys, and so forth. Sort any clothing by type and size, and music and books alphabetically. Space stuff out so that people can move around easily and quickly.

Label and price things clearly. A great way to price things is with removable stickers. You might use different colors for different prices. Consider grouping things together on a table at a fixed price like everything on this table $3. That will keep you from having to label everything individually.

Encourage bulk purchases. People shop yard sales because they love to save money. Group things together like three books for $2 or four DVDs for $5. That way, your shoppers will feel they’re getting more of a bargain, and your redundant stuff will disappear faster.

Be flexible. If it’s getting late in the day, and you have stuff that hasn’t sold, cut your prices. Remember you have two objectives – to make money and to get rid of stuff. If selling stuff cheaper than you had hoped will make it go away, you’re still ahead of the game

Keep it simple. Price everything in quarter increments. You should have at least one roll of quarters, $20 in $1 bills, and a few $5 and $10 bills. Remember the adage, for the want of a nail a shoe was lost. You don’t want to lose a juicy sale because you didn’t have change for a $20 bill. Probably the best way to keep your money available is in a fanny pack.

Don’t be a helicopter. People hate to be hovered over.Don’t follow your shoppers around as they examine your stuff. Give them a wave and a smile to show you’re available, Then, let them browse. You could consider offering your shoppers lemonade, cold water or a soda.

Have an extension cord. If you’re selling electronics, people will want to know that the stuff works. Run an extension cord out from your house or garage, so you can demonstrate that TV, boombox, or CD player. For that matter, you might want to have some music playing as this provides a nice atmosphere.

In conclusion

If you’re trying to amass money to settle your debts, a yard sale can really help. Just follow the tips you’ve read in this article, and you’ll have a successful sale that will earn you big bucks.

Saving money isn’t easy – at least not for most Americans. According to a GOBankingRates survey a whopping 62% of us have less than $1000 in savings. And only 14% of Americans have $10,000 or more saved.

While you never know when a financial emergency will hit, you can be sure that one will. Your house could sustain serious damage or your automobile could need an expensive repair. You could lose your job, or suffer a serious illness.

How can you protect yourself from these kinds of emergencies? You need to have at least $10,000 in the bank.

Saving that much money isn’t easy, but if you follow, these nine steps, you can reach that goal.

1. Learn your spending

You can’t really start saving until you understand your spending. Apps such as Mint can help you determine this. It will both track your spending and divide it into categories, so you can see where your money goes. If you find you’re spending $200 a month eating out, you might decide to do things differently. Then, you have those little things like drive-through lattes that don’t cost much but that can add up over a month’s time. Once you understand your spending, you should find places where you can save money for your emergency fund.

2. Set realistic goals

Nobody climbs Mount Everest in a day, and it’s unlikely you’ll be able to save $10,000 in one year. While your goal should be $10,000, there’s nothing wrong with breaking it down into more bite-sized chunks. For example, your goal might be to save $1000 in six months, then $2500 in a year, then $5000 and so on. It really doesn’t matter what numbers you choose, so long as they are reasonable and doable.

3. Create a budget

If you don’t now have a budget, you need to make one, and it needs to include your emergency fund. Cutting out impulse purchases can help, but this won’t get you to your goal – at least not according to most experts. If you want to realize that $10,000 goal, you need to allocate 10% to 15% of your gross income to your emergency savings. Just make sure that whatever percent you choose, it’s one you can do consistently and without fail.

4. Pay cash as much as you can

Studies have shown that people who don’t use credit or debit cards typically spend 15% to 20% less than those who do. Paying cash also tends to cut down on impulse purchases. This, again, turns into money for your emergency savings account.

5. Treat your savings account like it was a bill

It can be easier to save money if you set up an automatic transfer just like you pay your bills automatically. How do you do this? You should be able to arrange with your employer to put a portion of your paycheck into your savings account automatically. If this is not possible, arrange to have money automatically transferred from your checking to your savings account. In other words, treat your emergency fund as if it was a monthly bill.

6. Open an inconvenient but high-yield savings account.

Find the highest-yield savings account you can. This is likely to be an online account as they tend to pay higher interest rates then your local banks. But what’s even better is to set up a high-yield savings account separate from your checking account in a bank that’s a distance away from where you live. This would make it more difficult for you to access the money on a whim.

7. Save any windfalls

If you come into an unexpected windfall like a birthday present, a bonus, or an inheritance, resist the temptation to spend it on something fun. Stick it in your emergency savings account instead. This will help you reach your goal much faster.

8. Don’t pay off your credit card debts

This may seem counter intuitive because credit card interest rates are much higher than the interest rate you earn on your emergency savings account. But if you’re paying down debt, and not contributing to an emergency savings account, you’re making a serious mistake.

If you can do both, first tackle the credit card with the highest interest rate. When you have it paid off, you can then take its minimum payments money, and sock it into your emergency savings account. If that minimum payment was $50, this would mean $50 more for your savings fund every month.

9. Treat yourself occasionally

Saving money means sacrificing some of the fun things in life and a fair amount of self-discipline. It’s important to reward yourself occasionally to keep going. And you should work the treats into your budget. They could be a weekend at the beach, a new smartphone, or a new piece of furniture for the living room. The important thing is to build money into your budget – whether it’s for a grande latte or an overnight stay at grand hotel – as this will help you sustain your momentum towards achieving that $10,000 goal.