Fortunately, getting out of debt does not have to be that complicated. Not that it’s easy to pay off bills that have grown and grown – especially those that have been building for years! But there are a few simple steps that you can do all by yourself. Without having to respond to any ads. And they work for most kinds of financial problems. Not all. But most.

So, if you’re sitting back and waiting because you’re not sure what to do, here are 5 simple do-it-yourself debt reduction strategies to start with:

1) Set a goal & put it in writing!
Without a doubt, this is THE most important step for getting out of debt. If you’ve not committed to doing it, you’ll fail, plain and simple. Doesn’t matter which company you work with, or which option you choose. YOU must know exactly what you want to achieve in order for it to happen.

2) Pick one credit card and only use it for emergencies.
And get rid of all your other cards. Put them in a drawer. Or a shoe box. Or a safe deposit box. Or a sealed envelope. You can even cut them up and throw them away. If you let yourself keep using credit cards instead of cash, then you’ll keep buying things you can’t afford. And you debt will keep growing!

3) Call all your creditors and ask them to lower your interest rates.
Sometimes this works. Sometimes it doesn’t. If not, wait a month and call again. As you pay down your debt, and make payments on time, you’ll get better rates. So keep trying. Every percentage point you get reduced means more money goes to the balance.

4) Pay an extra $10 or $20 or $50 a month above the minimum payment.
Start with the card that has the lowest balance (so you’ll pay off one card quicker). Or can pick the card with the highest interest rate. Your choice. Just make sure to pick one card, pay as much extra each month that you can afford. And you’ll start paying down your debts faster and faster!

5) Reward yourself once in a while.
If you’ve got a lot of debt, it will take a while to pay it all off. Having the discipline to stick with it month after month is great, and will pay off in the end. But in the meantime, don’t forget to enjoy your life! Give yourself a reward every month, or every other week. It doesn’t have to be a cruise to tropical island (although we’d all like that type of reward). Maybe a night at the movies, or a restaurant, or a weekend away with a loved one. Don’t ruin all your progress with one big expense. But do something fun for yourself – and do it with no worries!

Dealing with debt stinks! That’s the truth, and there’s no way around it. But if you make a goal, work hard, and have some fun along the way, you’ll be making changes that will improve your life for years to come!

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Need help getting out of debt? The author of this article, Kris Bickell, created www.debt-tips.com to help you learn how to find the right debt reduction program for your situation. If you’re considering bankruptcy, then learn the truth about debt settlement programs and find out if it is the right solution for your financial problems.

There is now the new bankruptcy law, which changes the conventional meaning of the word “bankruptcy”. It was April 20, 2005 when George Bush signed the law about “Bankruptcy Abuse and Consumer Protection Act”.

Some people would say that this new law is nothing but unfair rule given by the government again, so lets dig further to the real details about comparing the present and the previous law.

Based on the US Bankruptcy Courts, the main reason behind the creation of the previous law is to offer an honest debtor the chance to start a new life again by relieving their debts and this will also help repay creditors as well as banks in a more efficient manner. On the other hand, the mere purpose of the new law is to repay banks as well as creditors in the right manner as long as the debtor has property available that will be used as payment. But the new law never suggests that debtors will be given the chance to start a new life.

Most finance companies would agree that the old law only allows people to abuse bankruptcy law. They say, almost all people who face this kind of financial problem are those that are nevertheless irresponsible when it comes to their finances. These people are those who only shopped or even gambled their cash away hence the new law will eliminate the chance of filing for bankruptcy for personal gains.

The new bankruptcy law would apply a means test for those people who are filing for bankruptcy. In case the debtor has $100 each month, which is left after the IRS was able to determine the monthly expense plan, then the debtor is forced to pay for five years and file Chapter 13.

Just try to consider the life waiting for people after this new bankruptcy law.

People are not allowed to file Chapter 7 of the Federal Bankruptcy code that will work to eliminate their entire unsecured debt.

Basically, in the new bankruptcy law, there are no provisions for debt problems created by illness, job loss, and other kinds of traumatic events although some studies suggest that these are the cause of some of bankruptcy cases.

Furthermore, with the new law, attorneys are responsible to the veracity of paperwork given by their clients. This simply means that your attorney must be able to search the client’s entire house upside down for possible family heirlooms. This will of course result for the decrease of bankruptcy attorneys or they will simply raise their fees just to cover up all the stress that they need to do for their client.

Luckily, we have devised this simple 5 step guide to ensure your finances don’t snowball out of control and leave you with you with a massive university hangover-

1) In order to stay in control of your money, you need to actually check how much you have on a regular basis. It takes 5 minutes to log into your account and check your balance so you should be doing this at least twice a week. Remember, the more information you have about your finances, the better your purchase decisions.

2) Leave your card at home. Off on a night out? Make sure you leave your credit/debit card safely locked away. Draw your money out on campus first to prevent any expensive impulse ideas. You might need to plan ahead if you don’t live close to an ATM but the money saved in the long run makes it worth it.

3) Only take as much student loan as absolutely necessary. The amount of money at your disposal when starting is frightening and it is so easily accessible. Remember, it’s not yours and you WILL have to pay it back in its entirety (plus interest). By taking the bare minimum, you will reduce your debt heavily and will have more disposable income when you start working.

4) Get a summer job. Student life has the very attractive appeal of extra long summer holidays, far too long in my opinion. Make use of this time and get to work, if you save 75% of your summer earnings you will have a reasonable cash flow for the whole year. If you are really clever, you will land a job related to the industry you wish to work in, leaving you with extremely valuable work experience too.

5) Take advantage of your student status. Being a student means discounts on anything and everything so make sure you have the necessary membership cards to fully exploit your position. Most places won’t be encouraging you to use your discount cards so make it a habit to ask if they are accepted EVERY time you buy something.

In order to leave university with little or no debt, you need to give your finances the necessary respect. It doesn’t take a lot of time but it might take a little planning. One thing is for sure, any time invested in your money is time very well spent.

If you need further help with money, your university will have a dedicated finance expert, advising on debt advice, money management and more.

What is wage garnishment?

It takes place the moment when the lender is given a court order that will necessitate the employer to withhold a portion of the salary that will be used towards repayment of the unpaid debts that is owed by the lender.

But this does not give the debtor all the rights against the lender. There is a State and federal law that will determine the amount of money that will be garnished from the wage based on the level of income. Generally, the amount is 25% or sometimes less of your disposable earnings. Disposable income refers to the amount of money which remains after all the Social Security benefits, state, federal and local taxes, state unemployment insurance have all been deducted.

When is a wage garnishment sought?

As a rule of the thumb, creditors will go for wage garnishment or other kind of legal actions as their last resort in their goal to collect something from the outstanding debt. In case you have defaulted on the conditions of the agreement that you’ve entered with your credit card issuer and if the debtor thinks that they don’t have any option left to do then they will surely count on legal system as their remedy to the situation.

If you are thinking just how much garnishment can really be deducted then you need to understand that your wage can never be garnished by more than a single credit, not unless the primary garnishment did not cover the 25% which is permitted by law. The federal law for the child support as well as alimony would allow up to a total of 50% of the disposable income that will be garnished by the employer in case you happen to be supporting another spouse or another child.

What if you disagree with your wage garnishment?

If your employer receives a notice about garnishment then you need to understand that your employer is bound to follow the law imposed by the government when it comes to wage garnishment. Of course, you will be angry about the whole idea that a percent of your income is reduced, but you can always contact your creditor for other methods of repayment so it would be more convenient on your part.

Bankruptcy is a legal proceeding wherein you can stop your creditors for collecting additional loan repayments. There are several types of bankruptcy proceedings that apply to individuals and private corporations. There are provisions in the bankruptcy act that illustrates the kinds of bankruptcies that can be filed for. Chapter 7 involves liquidation proceedings wherein a certain amount of assets are preserved and the rest are surrendered to the bankruptcy trustee to be sold to come up with funds to pay lenders. Filing for Chapter 11 bankruptcy applies to businesses or individuals with a collective debt obligation while Chapter 12 applies to impoverished farmers. Chapter 13 bankruptcy is perhaps the most common as this is the one that applies to individuals who want to organize their debt obligations. This type of bankruptcy is more like a loan restructuring program.

Filing for bankruptcy can definitely mar your credit record and strip you of your assets. Depending on the type of bankruptcy you are filing for, you may still need to pay a certain amount to your creditors even after filing for bankruptcy. The important thing for you to know is your bankruptcy alternatives. You have to consider these alternatives carefully to be able to salvage part of your assets and your credit rating. Check out your bankruptcy alternatives before signing up for bankruptcy.

If you have no wages nor property that may be put at risk, one of the bankruptcy alternatives would be to do nothing. Because there is nothing that you possess that your creditors can claim to cover your unpaid debt, your creditors will most likely just write your loan off. When they strike your record off their books would be at their discretion. Your loan delinquency record may be kept alive for quite a number of years during which will most likely receive persistent collection letters and phone calls that badger you to resume payments. Additional penalties will also be charged on your delinquent account making your loan amount multiply. However high this amount goes, if you have absolutely nothing to pay it with, it can get written off by your lender.

Bankruptcy alternatives also include negotiating with your lender and loan restructuring. By negotiating with your lender, you can keep your assets and buy time for you to pay off your debt. Financial institutions are actually more concerned about getting their money and not your property. Negotiate with your creditor by expressing intent to resume payments as soon as your cash flow would permit. Loan restructuring, on the other hand, involves the reissuing of your loan balance and arrears in a new loan. Restructuring as a bankruptcy alternative is a less expensive option.

Maybe you’re wondering how you will be able to escape from debts and let me answer that for you – there is no good way of escaping it, but there is a way of preventing and starting all over again.

Let’s see first the advantage and disadvantages of paying taxes. Taxes are everywhere, when we buy our food, clothing, appliances even the single pen is taxable. In short, taxes are just part of life and we can’t just say “I don’t want to pay that tax,” because with these taxes, bridges were made, community projects were designed and constructed – the taxes that were extracted from people are collected by the government so that they can use it for government projects for the betterment of the country.

So again, the answer is no, we can’t escape from paying tax. But how can we get irs tax debt relief? First of all, you have to know the estimated amount of your tax every month. Just give an estimated amount then as much as possible have some additional excess for the estimated total so that you won’t have a problem on the payment. Upon every April 15th, (actually, just to make sure, you should file it before this date) have your tax return filed to avoid any penalty. Remember you don’t want to pay much more than you should be paying just because you didn’t file it on time. But if you can’t do it before or even on the exact day of April 15, file a request of extension. The request for extension should be submitted also before April 15. Being ahead of the deadline is always better than cramming on the later day.

Now the next question would be how can you have an estimated tax amount every month? In a business every single penny that would spend on a certain thing should be listed or at least just have a receipt. It’s not an awful thing to do. You just have to get all of the receipts in everything that you paid using your company’s money since this would make you have an idea of how much you are actually spending every month. So with that, you will have an estimated monthly expenditure then just make a computation on how much tax will be deducted to you per month and after that you will have your estimated tax to be paid. There are places that specialize in tax debt help, and you may want to consider contacting one of these. In case you failed to do these things and you want to resolve your tax debt, then your last resort would be pay your taxes by selling one of your properties or possessions then think of some plans where you can make money and start again.

Debt consolidation loans can be described as a strategy where all the existing loans are combined into one. However, the fact is that the lender, who provides a debt consolidation loan to any individual, actually pays off all the existing debts of the borrower. The advantage of opting for a debt consolidation loan is that these loans are available at lower interest rates. As a result, the total amount that a borrower pays to one lender at the end is comparatively much lower than the amount paid by to clear off multiple loans. Debt consolidation also helps in improving the one’s credit history.

Mentioned below are some useful tips and ways that can help in debt consolidation.

Credit Card Transfers: Accumulating credit, including the accrued interest, can be a matter of worry for many. One good strategy is to transfer the existing debts on one credit card to another. In this regard, one needs to shop around so as to get the best deal. The entire aspect revolves around getting the best interest rate. One should opt for credit cards that offer lowest rates.

Home equity Loans: One way of consolidating your already existing mortgage loan is to go for a home equity loan. Equity that is built up on the home is used as a security or collateral for obtaining the loan. Another advantage of home equity loans is that they are relatively inexpensive and can be obtained at lower interest rates. If used properly, home equity loans are a great money saving strategy.

Loan on Life Insurance Policies: Life insurance policies can be used as collateral for obtaining loan. Also, life insurance policies do have the clause where one can borrow a specified amount of money against the value of the policy. One advantage of these loans is that one doesn’t need to necessarily pay the loan amount back to the insurance company. In case the loan amount is not paid back, the same is deducted from the maturity amount and the rest is paid back to the beneficiaries.

Retirement Funds: One can even opt for loans on the retirement plans such as 401(k). However, one should opt for this strategy only when there is absolutely no other choice. Advantage of taking loan from a retirement plan is that the loan payments are drastically lower. Even the loan gets repaid within very less time. The glitch is that interest and bonus accrued at the end of the year is one the amount present in the plan. Since the amount present in the plan gets reduced due to the loan, the accrued interest and bonus is also less.

Other good means of consolidating existing loans is to obtain funds either from family and friends or else opt for loans from credit unions. An important fact one should remember before going for a debt consolidation is to opt for a detailed consultation with a registered financial planner.

If you’re not sure what I mean, check out the following animated financial documentary entitled “Money as Debt”.

Paul Grignon’s 47-minute presentation of “Money as Debt” tells in very simple and effective graphic terms what money is and how it is being created. It is an entertaining way to get the message out. It is a painless but hard-hitting educational tool and should be viewed by all groups concerned with the present unsustainable monetary system in Canada and the United States.

Click here to view the embedded video.

A woman in North Carolina started with a payday loan of “$50 or $100,” and before she knew it, she was getting one loan to pay another and had racked up $700 in high-interest debt.

These are only two examples of the many people who get sucked into the irresistible rollover gimmick of pay day loans. Friendly store managers reportedly call customers to tell them how easy it is to defer repaying the loan on time by simple writing another postdated check.

What they don’t explain is the concept of compounding interest. And, as I’ve mentioned before, those who understand compound interest are destined to collect it. Those who don’t are doomed to pay it.

Payday loans are short-term cash loans. Borrowers typically write a personal check for the amount borrowed plus the finance charge and receive cash or sign over electronic access to their bank accounts to receive and repay payday loans. On the next payday the loan and finance charge must be paid in one lump sum.

Payday loans can range in size from $100 to $1,000, depending on state legal maximums. The average loan term is about two-weeks and loans cost on average 470% annual interest (APR). Finance charges normally range from $15 to $30 to borrow $100. For two-week loans, these finance charges result in interest rates from 390% to 780% APR. Shorter term loans can have even higher APRs.

Borrowers who obtain payday loans generally have cash flow difficulties, and feel that they have few, if any, lower-cost borrowing alternatives. All they need to get a payday loan is an open bank account in relatively good standing, a steady source of income, and some identification. Lenders do not conduct a full credit check or ask questions to determine if a borrower can afford to repay the loan.

At the end of 2006, The Center for Responsible Lending reported about 25,000 payday loan outlets in the United States and annual loan volume of at least $28 billion, with almost $5 billion in loan fees being paid by consumers.

As the examples have shown, payday loans trap consumers in repeat borrowing cycles due to the extreme high cost to borrow, the very short repayment term, and the consequences of failing to make good on the loan amount. Consumers who use payday loans have an average of eight to thirteen loans per year at a single lender.

Under the Truth in Lending Act, the cost of payday loans must be disclosed to the consumer. Among other information, you must receive, in writing, the finance charge (a dollar amount) and the annual percentage rate or APR (the cost of credit on a yearly basis). However, in a Consumer Federation of America (CFA) survey of 100 Internet payday loan sites, only 38 sites disclosed the annual interest rates for loans prior to customers completing the application process, and only 57 sites quoted the finance charge.

Internet payday lending adds security and fraud risks to payday loans. The CFA warns consumers to exercise extreme caution when using Internet payday loan sites. According to the CFA, small loans involving electronic access to consumers’ checking accounts pose high risks to consumers who borrow money by transmitting personal financial information via the Internet.

Contracts from Internet payday lenders often include a range of one-sided terms, such as mandatory arbitration clauses, agreements not to participate in class action lawsuits, and agreements not to file for bankruptcy. Some lenders require applicants to agree to keep their bank accounts open until loans are repaid.

If you need credit, a payday loan is probably the last place you want to look. Consider other options first such as a small loan from your credit union or small loan company, an advance on pay from your employer, or a loan from family or friends. A cash advance on a credit card may also be a possibility, but you’ll want to understand the terms before going that route.

If you ignore everything I have just said, and still feel that you must use a payday loan, please, for the love, borrow only as much as you can afford to completely pay off with your next paycheck while still having enough left to make it to the next payday.

Click here to view the embedded video.

• Pay with cash whenever possible.

• Stay within your spending limits.

• Avoid impulse purchases.

• Avoid “buy now, pay later”, “interest-free financing” and like offers that merely postpone debt.

• Compare prices before making major purchases.

• Take only the cash with you that you can afford to spend while shopping, and spend only that cash.

• Avoid borrowing to finance “staple” purchases.

• If you cannot avoid borrowing, use the lender that offers the lowest interest rate.

• Avoid bank overdraft charges by keeping close tabs on bank balances.

• Keep a record of all credit card purchases.

• Always pay more than the minimum payment on credit card bills if possible.

• Avoid applying for more than one or two credit cards at a time.

• Consider transferring balances to a lower rate card, making sure the low rate applies to balance transfers.

• Avoid credit cards that charge interest from the date of purchase with no grace period as well as cards that charge interest immediately on a cash advance, plus charge a fee for each cash advance.

FHA mortgage insurance also encourages mortgage companies to make loans to otherwise credit worthy borrowers and projects that might not be able to meet conventional underwriting requirements, by protecting the mortgage company against loan default on mortgages for properties that meet certain minimum requirements–including manufactured homes, single-family and multifamily properties, and some health-related facilities.

Section 203(b) is the centerpiece of FHA’s single family insurance programs. It is the successor of the program that helped save homeowners from default in the 1930s, that helped open the suburbs for returning veterans in the 1940s and 1950s, and that helped shape the modern mortgage finance system.

Section 203(b) has several important features:

Down Payment
Down payment requirements can be low. In contrast to conventional mortgage products, which frequently require down payments of 10 percent or more of the purchase price of the home, single family mortgages insured by FHA under Section 203(b) make it possible to reduce down payments to as little as 3 percent. This is because FHA insurance allows borrowers to finance approximately 97 percent of the value of their home purchase through their mortgage, in some cases.

Down Payment Gifts
The down payment for an FHA mortgage can be 100% gift funds. This is one of the key benefits to the FHA program. Verification of the source of gift money is not required. However, it is necessary that the gift funds be deposited in the borrower’s bank or savings account, or in an escrow account, prior to underwriting approval. Proof of deposit is required.

Closing Costs
Many closing costs can be financed. With most conventional loans, the borrower must pay, at the time of purchase, closing costs (the many fees and charges associated with buying a home) equivalent to 2-3 percent of the price of the home. This program allows the borrower to finance many of these charges, thus reducing the up front cost of buying a home. FHA mortgage insurance is not free: borrowers pay an up front insurance premium (which may be financed) at the time of purchase, as well as monthly premiums that are not financed, but instead are added to the regular mortgage payment.

Fees
Some fees are limited. FHA rules impose limits on some of the fees that mortgage companies may charge in making a loan. For example, the loan origination fee charged by the mortgage company for the administrative cost of processing the loan may not exceed one percent of the amount of the mortgage.

Limits
HUD sets limits on the amount that may be insured. To make sure that its programs serve low and moderate income people, FHA sets limits on the dollar value of the mortgage loan.

FHA Mortgage Insurance Costs
FHA requires a mortgage insurance premium (MIP) for its home buying programs. An up front premium of 1.50% of the loan amount is paid at closing and can be financed into the mortgage amount. In addition, there is a monthly MIP amount included in the PITI of .50%. Condos do not require up front MIP – only monthly MIP.

The mortgage insurance premium paid on an FHA loan is always significantly higher than on a conventional program. On an FHA loan the borrower will be charged a mortgage insurance premium equal to 1.50% of the purchase price of the property and a renewal premium of .500% in subsequent years. By contrast the mortgage insurance premium charged at closing on a conventional program is as low as .500% (with 10% down payment) with renewal rate in subsequent years as low as .300% in subsequent years.

Should you choose an FHA loan?
Many people, especially first-time buyers, use FHA loans because the qualifications are a bit more lenient and they can purchase a house with a 3-percent down payment. While it is possible to get a 3-percent down payment for a conventional loan — and even zero-down loans — interest rates are normally higher than with FHA-backed loans.

So, how does this affect us as individuals?

Approximately 18 cents out of every dollar of total tax revenue collected is immediately used merely to pay the burgeoning interest on the Federal debt. Thus, absolutely no governmental services or benefits are delivered in return for 18 percent (nearly 1 out of every 5 dollars) of our total Federal tax bill.

The interest we all must pay on the national debt represents a “debt tax” that can never be repealed as long as the debt remains at its current levels. The debt tax will consume larger portions of our money as government spending continues to increase.

These are substantial funds that could most prudently be re-invested in the growth of our own businesses, but must be shoveled out instead simply to service the interest payments to the world of strangers who hold these obligations of the Treasury of the United States.

While some of the recipients of these interest payments may recycle these funds into the purchase of domestic goods and services, much of the Federal debt is held by foreigners.

The national debt drains substantial funds out of the business that could otherwise be invested in job creation and entrepreneurial expansion. It also drains substantial funds out of consumers’ pockets that could otherwise be available for the acquisition of goods and services. And this burden inevitably impedes the growth and prosperity of the economy.