Categories
credit credit card

A Warning On Debt Reduction – The Real Good and Bad News

Have you had to cut back on your spending? There are many reasons to cut back on your spending. There may be the small steps toward rational budgeting, as well as the occasional credit card error, but the result is often quite the opposite. There may be consequences beyond your control, but you need to do everything in your power to avoid them.

Before addressing the obvious facts on the debt reduction imperative, here are a few other things to keep in mind:

Keep spending the way you know you can budget.

Debt reduction is a task for a long-term program that only comes to hand. The best you can do is to make it work for you.

Make sure you do your research on all the available options.

You are the boss; you can and will cut your debt. You are the CEO. You will.

And that brings us to…

The big news today is that debt reduction does not necessarily mean lower APR or lower interest rates. You can accomplish both ends by reducing your credit card balances and/or combining debt into manageable monthly payments.

Debt reduction does mean a decrease in the average interest rate on some credit cards. More importantly, you will reduce the outstanding debt.

But, some may contend that this is a final nail in the coffin for all debt reduction efforts. Yes, there are plenty of debt-relief/precautions programs in place, if you truly need to pay off the remaining balance. But only on a short-term, and only if you will eliminate the balance completely.

Why, I will simply say, is the debt reduction imperative more relevant because it concerns so little branch of society with the necessary peace of mind needed for a long-term strategy of reduction?

In spite of their relative lack of power and influence, the American public is becoming more instrumentally aware of the necessity for careful thought and action.

And we should all be commending our fiscal colleagues for speaking up. Despite the increasingly serious nature of recent events, the American public continues to make wise and sound decisions for their own good. Of particular importance are those responsible for the following statements:

‘ We want to improve the lives of working Americans and this affects all.

‘ Yes, there is a financial cost to having too many credit cards.

‘ We’re all making mistakes.

‘ If we cut back, there is still room in the budget for leaps forward – as well as for further budgeting.

So, yes, debt reduction is important, especially with all the attendant financial difficulties. But it is not the only way to achieve debt reduction and escape from the effects of identity theft.

So, too, can you debt reduction, and the pursuit of a debt-free life. Of course you need debt-relief and prevention strategies in addition to one’s immediate finances. And yes, your financial future is also important. But it also depends on how you prioritize your future actions.

For example, you can use one of the many debt-relief and debt-precautions programs available. These programs can assist you in reducing your outstanding balances and, yes, in eliminating the debts of some of the people who are most important to you.

The program provides you a form of “opt-out” (or ‘yes’) on your unsecured debt. What you do is provide your creditors with a notice that you intend to file a claim against your current creditors, and they will not accept your claim against them unless you pay them on their debt-limit each time. If you do not, then, have a claim made against your assets, and your personal financial future.

Your program gives you the ability to negotiate a repayment date for each of your unsecured debt. If you are unable to reach an agreement and are paying high interest amounts, then you can seek a bankruptcy or imprisonment. In the latter latter case, you must report the case to a public office agency or file a false tax return.

Do not, therefore, continue to make your payments to your creditors on unsecured debt. This will harm your credit rating and you will be viewed as a debt-murderer and worse! You might even be disciplined enough not to make your payments.

Some debt relief programs provide you with the option to pay a portion of your debt in full each month, at the end of the year. These programs are an excellent choice for people who want to go in for a realistic goal of reducing debt and eliminate the overall burden of paying high amounts. On the other hand, some prefer creditors that don’t send their regular clients off to debt.