Consequences of ignoring your debt payments

james mullerMany people don’t like to keep up with paying off their debts. Perhaps they think that it is useless because they are not getting immediate benefits from it or maybe because they don’t like to spend all of their hard-earned money every month on debts. If you have defaulted on your credit card or other loans, you will have to face some severe consequences. Try looking for help by searching for a local debt relief office using terms like  Las Vegas debt consolidation service. Ensure that you’re aware of the outcomes of ditching your debts before you decide not to pay them.

1. It will impact your credit

If you have defaulted, no matter if you answer the call of collection agencies, your collection account will be listed on your credit report, which will make an impact on your credit score. When the collection appears on your credit card or loan, your credit score will naturally fall. All the subsequent charges and late payments that you should have paid on time will harm your credit score before a collection.

2. Debt will continue to grow

Debt Consolidation in las vegasYou might have ceased to pay the debt, but that doesn’t put an end to the monthly increase due to your interest. Your debt will double over time while you will act ignorant. Always remember that paying debts in the minimum amount is better than not paying them at all. For getting rid of debt, you might have decided to stop paying it, but it will always come back to you. You have to pay your debt in any way, so it is better to pay it now and prevent it from growing further than to pay twice the amount after some time.

3. Different agencies will try to reach out to you

If one collection agency becomes unsuccessful in collecting the outstanding amount from you, your account will be handed over to another agency. This process will continue until the balance remains outstanding. If you stay stubborn and don’t pay the unpaid amount, you will become a familiar person to most collection agencies, which will affect your credit score badly.

4. Collection agencies will not rest

Until they get the amount from you, they will not rest. You might try to hide somewhere because you are tired of facing bill collectors every now and then, but they will find you no matter what. They will reach out to your relatives, neighbors, and even employers to get information about you. Think how horrible and embarrassing it will be when the people you know will meet or be called by them, who will inquire about you. When you meet your family, they will also ask you questions about your debts.

5. You will get sued

debt consolidation las vegas nevadaAfter all these scenarios, you don’t leave collection agencies with any other option. If you constantly run away from bill collectors, they will end up suing you. If they win the case, a judgment will be passed against you which will permit collection agencies to get the money out of you in whichever way the judge declares.

Types of Household Finance Debts and Their Pros and Cons

james mullerDebt has a bad reputation and it’s not difficult to see why that’s the case. The total household indebtedness by the third quarter of 2015 stood at $12.07 trillion in the US. The wisest thing to do is to stay out of debt, but debt can be very useful and positive if you know how to use it intelligently.

Consumers find themselves using these three common options when it comes to debt: credit cards, personal loans, and home equity lines of credit and loans.

Credit Cards

The best thing about credit cards is that they are readily available and very convenient, but they usually have the highest borrowing cost among the three common options. Credit cards can be a good option at certain times. They are ideal for situations in which you are borrowing for a very small period. They are also the best way to pay when in emergencies. If you can pay off your credit card debt quickly, say in a month or so, then you can use the debt money with no interest and it can be very beneficial for you. However, credit cards aren’t the best source of debt if you won’t be able to pay it off on a monthly basis. Looking for low interest rates is in your best interest (pun intended) because high interest spells disaster, no matter what.

Personal Loans

CosignerA personal loan is an unsecured loan that will let you borrow money at lower rates as compared to the ones that are associated with credit cards. Personal loans are a more sensible option when you have to pay for a larger purchase that can take some while for you to pay off. If you’re looking to finance something unexpected or make a relatively large purchase such as a basement remodel or emergency hospital expenses, personal loans can be advantageous in situations such as these. The fixed interest rate is another reason why personal loans should be preferred in situations where you’ll not be able to pay off the loan quickly. Despite lower interest rates, they may not always be the cheaper option because of other fees such as the loan origination fees, which is something you have to look out for.

Home Equity Lines of Credit and Loans

debtHome equity loans let you borrow from the equity that you have built up. The interest incurred in these home equity products can be taken from your taxes, which is not the case with personal loans or credit cards for that matter. You can borrow substantially more if you have built a lot of home equity. The drawback is that this type of borrowing is made more expensive upfront as it often involves closing costs as well as other fees. Another drawback often ignored but can be financially disastrous is that defaulting on payments will put your home at risk. The rates are also adjustable on home equity loans and will rise as the interest rates do.

Guide to Getting Out Of Debt

james mullerWe live in a modern day society that rely heavily on the credit card. People use their credit cards for small purchases like a dinner at their favorite restaurant to major purchases that involve home furnishings to an automobile. People start acquiring debt the moment that they receive that first credit card during or right after college. It is inevitable, one day that they will be over their head in debt. The monthly payments on their credit cards are just too overwhelming. They don’t know what to do. Perhaps, debt consolidation is the answer for them.

Debt Consolidation Up-close
Debt consolidation is a process that is designed to cover multiple credit card payments for an individual. For example, a person has several credit cards with high interest rates. They are simply unable to make even the minimum payments on those cards. Debt consolidation would combine those cards into one easy and convenient payment with a lower interest rate. The lower interest rate will keep the debt from growing higher, while providing a way for the individual to pay the debt off in less time.

Debt Consolidation Steps
One way to consolidate debt is super easy. However, only those with a good credit history are able to use this method. Simply transfer the balance on your credit cards to a lower interest rate credit card. This works wonders for quickly reducing debt, because less money is applied to the interest, more money is applied to the debt balance. However, those with bad credit will have to take additional steps. They will need to consult with a debt consolidation service to work out the terms of the consolidation. Actually, this might prove very beneficial for the individual. Generally, they acquired debt because of financial mistakes. The consolidation service will provide financial guidance and counseling or they might help the client find a financial counselor to show them options to handle their debt.

 Advantages
Of course, the major advantage is that the individual seeking debt consolidation is assured that all their debts will be combined into one easy and convenient payment that fits their current financial situation or budget. The payments are lower and at a lower interest rate. Therefore, they are able to look forward to living debt free sooner. Of course, it is important for the individual to realize that they are in a bad financial situation and act immediately to solve the problem by seeking debt consolidation as soon as possible.

The science behind debt

Is your credit card edging close to the limit? Have you missed a payment on your home loan? You are not alone. It is estimated that over 80% of Americans – that’s eight in every ten people – are in debt.

While you are maintaining your monthly payments, debt is not a major issue. But it’s all too easy for debts to spiral out of control. Maybe an illness has reduced your monthly incomings, or an unexpected expense means you’ve missed a due date. However, unmanageable debt need not be a shameful secret. In fact, there are many debt consolidation options available to you.

One solution is to obtain a debt consolidation loan from a reputable lender, either your bank or an online financial institution, and make one regular monthly payment to a single institution. This reduces confusion over due dates and minimum payments, and will most likely reduce the interest you are paying too.

You could open a new, lower-interest credit card account and transfer your balances. You can often benefit from an introductory 0% interest offer for up to a year. Make sure that you close the old credit accounts though, to avoid the temptation to overspend.

A final option is to register for a debt management plan – a simple internet search should provide details of credit counselling agencies in your area who can run through your debt consolidation options with you.

Just imagine life without the stress and worry of unpaid bills. Whatever method you choose, consolidating your debt into one combined, achievable monthly payment will improve not only your credit score, but also your quality of life.

Consumer Confidence At A Low

james mullerThe Canadian financial landscape presents a worrisome image right now. The exit of US retail giant target, along with other multi-chain stores sparked a litany of concern. This was on the back of falling oil prices that continued to bring the value of the Canadian dollar down. The real estate market produced an almost artificial boom at the start of the year. And now reports of Mexico’s competitive advantage over Canada in terms of manufacturing are making the rounds. Speculation is rife, and with upcoming elections in October 2015, it is likely that the party with the best plan for economic revival will sway the voters.

The sluggish behavior in the retail sectors is a major finance issue in Canada. It signals the lack of confidence on part of Canadians in the economy. Only two years ago, the same industry was going through a major boom, but with the loss due to falling oil prices, 2015 has been a year of turmoil. The departure of Target was followed by news of Loblaws closing 52 stores across the country. More recently, the retail lease market has shown signs of struggle as Target locations have proven difficult to find tenants.

The retail sector is usually a good indicator of the health of Canadian economy and consumer trends. Moody’s investor service highlights some of the baseline problems causing slow retail sector performance. There has been a slow wage increase relative to inflation. Sustained low oil prices have created a climate of tension amid layoffs, especially in the economic powerhouse that is Alberta. There are also growing trends in household debt. These factors have diminished consumer spending, creating a vicious circle. The low oil prices are believed to slow down dispensable income growth as well. Without a doubt, this is a significant finance issue in Canada. In order to provide the groundwork for resurgence, the interest rates have been at a historic low. The Canadian financial officers have to devise strategies that can increase consumer confidence in the economy. One way to do this is by creating conditions conducive to greater spending.

Is Debt Consolidation for You?

It is rather easy to acquire debt. In fact, one might consider it the easiest thing in the world given all the possibilities credit cards offer nowadays.

debtWhat is not so easy is paying all that effortlessly acquired debt back. That is where the idea of debt consolidation comes in: to help you manage the debt and all the interest rates that come with it with relative ease. But, is it really for you?The word ‘debt’ is pretty straightforward and all too familiar, but coupled with the polysyllabic word ‘consolidation’, it hides a fairly simple concept of grouping all the debts you owe to multiple creditors into one debt that is owed to a single creditor.

From this you can very well infer what is the main positive feature of debt consolidation – it helps you by getting rid of all the different debts (each of which with their own different interest rates) and combining them into a single, consolidated debt that has a unique rate. In other words, it drastically simplifies your fiscal management. Whereas the mentioned benefit of debt consolidation is, as some would say, virtuous in itself, there are however some downsides to it.

Namely, consolidating your debt implies that you borrow money in order to pay your existing debt. But that does not relieve you from ultimately paying back all the money you owe, nor does it shorten the time for doing so. If anything, if the loan term you bargained is long, you could end up paying more money than you would had you not consolidated the debt. In addition to this, it would be profitable if you remembered why it is you wanted the debt consolidation.

Is it so as to ultimately pay all the debt back? Well, is then taking more money the way to go? What is written in previous paragraph is by no means intended to dissuade you from consolidating your debt. I myself believe that the debt consolidation is a way to go since it simplifies a debt management so much, but you should learn to approach it with realistic expectations. This article aims at teaching you just that.