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Archive for March, 2011

Debt consolidation programs can help many people get back on track with their monetary assets while also helping to improve their financial futures during a time when many people may feel hopeless and lost. Many people who are interested in debt consolidation programs are not sure if their specific types of debt will be included in intriguing debt consolidation programs, helping them to eventually escape debt and the financial problems which are burdening them. Debt consolidation is not a loan or something that the individual will be newly responsible for with increased payments. Rather, debt consolidation programs are designed in order to help individuals to pay off the money that they owe to one or more organization, at a faster rate than they would be able to take care of on their own. Here are some of the most popular types of debt that are dealt with in the debt consolidation program.

For the most part, almost all of an individual’s unsecured debt can be consolidated with the debt consolidation program. Companies to which individuals owe money are most often willing to accept the fact that people enroll in debt consolidation and will be making lower payments since these people can also be considering bankruptcy. Bankruptcy is often a more dangerous option for individuals in that it will take seven or more years to recover from such a financial move, which will also result in the unsecured debt company’s complete loss of recapturing any due money.

Unsecured debt is money that a person needs to repay to an establishment, individual or organization that has no property or collateral that could be considered as attached to the owed money. Some of the most popular examples of these types of debt include credit card debt and debt owed to particular stores, many of which will issue to their customers a person credit card meant specifically for the individual store. However, these debts can also include personal loans, medical bills and student loans. Individuals who owe money in back taxes or current taxes can also look to the debt consolidation program with hope since these owed specific and identified monies are further examples of unsecured debt that would be included in the consolidated debt structure and repayment programs.

However, there are also types of debt that will not be covered in such consolidation programs most of the time and they are known as secured debts. Secured debt is slightly different and varied when compared to unsecured debt. This is mostly because the individual who has secured debt needs these items in order to continue to live and function in a manner that would allow them to make payments to creditors or in the debt consolidation program. Shelter and transportation to and from work are two of the basic necessities that individuals need in order to live and prosper. Some of the most popular examples of these types of secured debt include home loans or mortgages, as well as car or vehicle loans and repayment packages.

If you are like most consumers today you want to make sure you are getting the best deal for any product you are going to purchase. This means that you are going to ask your friends, look online and go to stores to get sewing machine ratings to help you make your final decision. Sewing machines start at under a hundred dollars ($100) for basic mechanical sewing machines. By adding stitches, features like button hole settings, computerized stitches and patterns, the ability to do embroidery, quilting options and more you can easily find machines that are now over three thousand dollars ($3000).

How do you make sense of all the brands, models and features? One way is to gather sewing machine ratings on the types of machines you are considering. A sewing machine rating on a long arm quilting machine is not going to help you if you are looking for machines that sew seams and decorative stitches. There are many sites with ratings and reviews of just about all available models. A great site for expert reviews in How Stuff Works with almost two hundred models reviewed and rated of all price ranges and features. Another place to go is the library to look at the Consumer Reports Buyers Guide. They annually review many different models and offer Best Buy recommendations in different price categories. Models are rated on reliability, durability and cost benefit comparisons.

JoAnn Fabrics offers a full comparison chart on all of the Singer Models it sells in stores and online. It divides them into three categories – sewing machines, sewing machines with embroidery and serger feature machines. The chart starts with the number of built in stitches for each machine (7 for the 1507WC and 173 for the 7470 Confidence Model). It shows you how many needle positions each model has (1-13) and the maximum width stitch for each model. The chart goes on to detail what features are available by putting a bullet point in the box for each feature like top drop in bobbin, Drop and Sew Bobbin TM, what kind of work light it has, what kind of drop feed and whether the needle is programmable. This is just for the regular sewing machines. JoAnn’s chart does the same things with the features specific to the other two categories and is a great tool if you are looking for a Singer machine of any type. The only issue I have with this chart is that there are no prices.

When Debt Becomes a Problem

When a debtor faces overwhelming debt that cannot be paid, he must consider several options. Ignoring the problem will not make it go away, although many people attempt to do this, hoping that the statute of limitations will run out on the debt at some point. The problem is, if the individual has employment of any type that is reported to the IRS, the creditors can find him/her.

Other options include one of the two types of bankruptcy, debt settlement or debt consolidation. Responsible debtors who want to get relief in a legal manner, but who do not want a bankruptcy on their credit reports, will consider the remaining options. The difference between debt settlement and debt consolidation are quite specific and, before making a decision, the consumer needs to understand what each entails.

What is the Difference?

Debt consolidation is the process of obtaining one large loan to pay off all creditors who are holding “bad” debt. Bad debt is defined as that for which there is no collateral (e.g., home, car, etc.) and which has been accumulated in the purchase of goods and services which are not permanent. The debtor secures a loan which usually has a lower interest rate and/or which provides for lower monthly payments than the combined total of the former debt.

The relief provided is that the debtor has a monthly payment which he can afford, and, can more easily provide for monthly living expenses. If a debtor’s credit is still good, he can often obtain such a consolidation loan himself, from a credit union, a bank, or through accessing the equity in his home through an equity loan or line of credit, or through a complete refinance of the home, taking cash out to pay off the debt.

The advantage of using home equity is that the interest rates on these types of loans are usually lower than other conventional loans. If the credit rating is already affected by late or missed payments, however, securing a debt consolidation loan may be almost impossible without contracting the services of a consolidation professional. This individual may be able to negotiate lower overall debt amounts and secure a loan for the debtor. There are fees involved for these services, which are usually added to the loan amount.

The one benefit of a debt consolidation loan is this: if the original debt amounts are paid in full, the credit rating actually jumps up a great deal, enabling the consumer to get future credit at very reasonable rates.

Debt settlement is a process of negotiation to lower the amount of each debt a consumer owes. If an individual is strong, assertive and committed, he can complete this process himself, once he is 60-90 days behind in payments on credit card and revolving debt. The creditor, facing the possibility of getting nothing at all, is usually willing to negotiate a lower debt amount for the prospect of getting something.

If an individual is not knowledgeable in the process of settlement or does not have the assertiveness to negotiate from a point of strength, it is preferable to employ the services of a professional debt settlement individual or agency. The major purpose of this process is to lower the total debt amount, not to consolidate existing debt into one larger loan.

Unlike debt consolidation in which debts may be paid in full, the settlement agreement is usually reported to the credit bureaus as a “settlement for less than the original amount.” This damages a credit rating, and the individual must work steadfastly and consistently to repair the damage to the credit score.