Types of Debt

It matters what kind of debt you have, and as you might have guessed, there are several different kinds although most of the debt that the average person finds themselves facing is what’s called unsecured debt. This includes the one that most of us struggle with in one way or the other—credit card debt. As well there are those unpaid student loans that have a way of gathering interest like a stone rolling down a hill gathers moss, and tax debts as well as medical or legal bills that have gone unpaid.

It happens more and more that people find themselves unable to see over the mountain of debt that they’ve created for themselves. Most of them are good people who would love nothing better than to find a way out and there’s help out there. Debt relief agencies like Delray Credit Counseling are experts at studying people’s individual debt circumstances and then helping them find a way out.  
What to Do About It

 The best option is to speak to a professional that can help. A certified debt counselor is the right choice. Professionals like those at http://www.delraycc.com are the people that can listen to your situation and help you find a plan to get you back on track. To start, all you need to do is apply to a local debt consolidation program—they are either usually private or non profit agencies that will supply a free quote on the time and interest that will be required. It’s really quite simple and once a plan is in place, you stand to save a substantial amount of interest on the payments and shorten the time it will take to pay the money back. The debt consolidation company that you select works with your creditors to design a repayment method that will both satisfy them and start you back on the road to financial freedom.

There’s a good reason that this is the best option and it’s simple. By consolidating you debt, you avoid having to claim bankruptcy. While bankruptcy does erase many of your debts, it does not take away some of the ones that can swell to large proportions like child support payments and student loans. As well, once you’ve filed either the Chapter 7 or Chapter 13 versions of bankruptcy, you credit rating is affected for up to ten years and you will find it considerably more difficult to get a personal loan, a mortgage or even a job.   

           There are actually two areas of the total package. One is called the credit rating and the other is called the credit score. The information used in both includes your social security number, your address, where you work and your bill payment history. It’s a composite picture of who you are and how you do business and its put together usually by three companies that vary depending on where you live. It’s important because any agency that might consider lending you money will have access to your credit rating or credit score and many of these agencies like banks actually provide information to keep these records accurate.

  So how do all those bad things like a bankruptcy affect your credit rating? Simple. A bankruptcy can hang around on these reports for up to ten years and a criminal record stays with you indefinitely. Even habitually missing payments stays on the reports for up to seven years.

 But because it’s called a credit rating, it stands to reason that the evaluation comes from somewhere, so there must be a credit score as well. The three credit bureaus in your area put together all the information on late payments, any collection actions as well as any outstanding debts. When they have all this information packaged, you get a score between 300 and 850. Obviously, the higher the number the more credit an institution loaning out the money will be happy to give you. There are certain cut off points as well. It seems that a person with a score at 619 or lower will have a hard time getting a credit card no matter where they live.

 There are several ways to monitor you credit rating or credit score and all the institutions that know about these things stress that you should make the proper inquiries at least once every six months. It’s also possible to pay a monitoring company who will let you know immediately if there are any noteworthy changes.   In America the three major companies that deal with your information are Equifax, Experian, and Trans Union. Although you can contact them and get the necessary information in one of the more traditional methods, going online and paying a monthly fee will get the scores and rating quite a bit faster.  Keeping track of this information is also a good way to monitor for Identity Theft.

First and foremost don’t get pulled in by the claim of interest free time if you transfer the balance from one card to the new credit card.  What they neglect to tell you is that only the balance of the other credit card is subject to the interest free period.  Any new purchases that you make will be charged interest and this can be misleading for many as they do not read the fine print.

Another thing that the bank may not tell you is that they can raise the interest rate on your credit card if you late with payments for other cards.  You need to be sure that you make all of your payments on time so you can avoid these unwanted increases in your interest rate.  This is known as the universal default clause and it is becoming a general rule for most credit lenders.

Another thing that most people are not aware of is that the bank has no limit set on the amount they can charge you on a late payment.  Even if it is just one hour late the fees can be as little as $5 and as high as $30, sometimes even higher then that.  The amount of credit a bank will give you and the amount of the interest rate you will be assessed is based on your FICO score.  This is the score a person gets from their credit history.  Lenders such as banks and credit card companies look at the amount of dent that you have and how many times you have been late on your payment history.

Banks do not tell you that there is no federal limit as to what interest can be charged on a credit card.  You need to be sure that you read the tine print to know exactly what you are getting into with any loan or credit card that you obtain.  Be sure to talk things over with your bank prior to signing any papers.  You need to know what you are getting into completely before the final signing of the papers.

There is usually a 3 day waiting period when a loan is processed.  This is to allow you the opportunity to cancel the transaction.  This is the only window you have in which to rescind the loan or credit.  Again, this is something you need to discuss with the bank prior to signing the final papers.  You need to know what all of your rights are and what penalties that the bank will instill for breaks in the signed agreement.

There are many options for first time investors to get started with $1000 or even as little as $50.  One of the easiest investments that you can get into is a 401(k) Plan.  You do not need any money at all to start with and you can add a minimum of 1% of your pay to the plan with each paycheck.  A great perk of these kinds of plans is that your employer will also put money in at the end of their fiscal year so that means you will get free money each year that is earning money for you.  

This means if you earn a yearly income of $30,000 with bi weekly paychecks, you can have as little as $11.50 taken out for your retirement fund from each paycheck.  This is taken out pretax so you will only see about $9 missing from your check.  Most people recommend that you contribute at least 10% of your pay to your retirement in order to save enough to live a comfortable life style when you retire.  

You can save for college with a 529 plan and you can start it up with as little as $25.  You would then need to have at least a $15 automatic deduction from another account like a savings or checking that will go directly into the 529 plan.  This is a great way to invest in your child’s future and there are great plans that you can get into such as Upromise where you save on things that you buy each day.  

These plans are tax exempt when they are used for qualified education costs of the beneficiary on the account.  With plans like Upromise, you can sign up with different credit cards from yourself as well as family and friends.  Each time they take certain purchases with those credit cards, a percent of the purchase is places into an account for your child for college.  You can then take those savings and use them in a 529 account.  

Another great investment choice would be U.S. Savings Bonds.  All you need to buy one is $25 dollars and you add to it in $25 increments.  Generally you can buy Savings Bonds right through your payroll as an automatic deduction.  The good thing about this is that the interest on the Savings Bonds are exempt from both state and local taxes and most often federal taxes as well.  

Investing doesn’t have to take a great deal of money.  Just do a bit of research before you invest your money so you can go with the best option for your goals. 

A basic savings account is a better option than your savings account, yielding you a small interest payment each month with little or no minimum balance required in the account.  If you need your money to be highly mobile and available at all times, then this is the perfect account for you, particularly if you tend to maintain a low balance at this point. 

If you have managed to save a few thousand dollars, on the other hand, a money market account might be the best thing for you.  This account has a much higher interest rate than a traditional savings account, but also has a much higher minimum balance, often of several thousand dollars.  If you feel comfortable having a few thousand dollars dedicated to the account at a time, then this might be the perfect option for you.  If you can’t afford not to have instant access to that money, however, you might want to stick to a more traditional savings account. 

If you really don’t mind having your money tied up for a long time, though, you can spend your money on a CD, which stands for Certificate of Deposit.  A CD is a special kind of account, which usually has an even higher rate of return than a money market account, but which ties the full balance up completely.  When you put your money into a CD, you commit the money for a certain amount of time.  You cannot deposit or withdraw to or from that account, and the money that you earn on it is often applied less frequently, sometimes annually.  This kind of account yields higher interest payments, but usually have a large penalty if you withdraw your money before the term is up.  If you can afford to have your money set aside for long periods of time, then a CD might be a good option for long term savings. 

Enough to buy General Motors.

For the republicans it’s business as usual.  You vote for the best guy they should put up for president.  But what about the democrats?

Well.  I guess they don’t want to recognize Michigan.  The only major candidate to put her name on the Ballot was Hillary Clinton.  So here are your democratic choices:

A. Hillary Clinton
B. Undecided
C. Other: Write Name Here:_____________________

Here’s the funny thing.  If you choose C your vote doesn’t count.  What?  You read that right.  They give you a choice that invalidates your vote. 

Printing costs must be up because they’ve got a few names on there of guys who’ve already dropped out, so you can’t pick them either.

But the Obhama and Edwards supporters are still out in full force:

“Choose undecided,” they say.  “That way Michigan delegates can vote for someone else instead of Hillary down the road”.  Ok.  Let me get that straight now.  Vote for the guys that didn’t even want to be on Micigan’s ballot?

But what issues are important for Michiganders in this election? That’s an easy one:  JOBS.

1 in 13 people doesn’t have a job here.  So it should be an easy sale for the candidates that do actually want to get some votes out of old Michigan.

I’m a republican.  I haven’t made up my mind for their best guy yet.  But I’ll do some research today and go cast my vote later this afternoon.

It should be an exciting election year ahead.

Think of it like a credit card the government used for spending.  This is in addition to all the money we sent them let me mind you.

Here’s the best part:

All of the money you and I send in for taxes this year will pay the interest on our $115,000.00 share.

When we look for our next president this year.  Let’s look closely on how they plan to handle this problem.

It’s a big problem indeed!

One day the lapdog starts chasing butterflies and before long, Cuddles discovers that he’s lost. Wandering about, he notices a leopard heading rapidly in his direction with the intention of having lunch.
 
The old lapdog thinks, “Oh, oh! I’m in deep doo-doo now!” Noticing some bones on the ground close by, he immediately settles down to chew on the bones with his back to the approaching cat. Just as the leopard is about to leap the old lapdog exclaims loudly, “Boy, that was one delicious leopard! I wonder if there are any more around here?”

Hearing this, the young leopard halts his attack in mid-strike, a look of terror comes over him and he slinks away into the trees. “Whew!”, says the leopard, “That was close! That old lapdog nearly had me!”

Meanwhile, a monkey who had been watching the whole scene from a nearby tree, figures he can put this knowledge to good use and trade it for protection from the leopard. So off he goes, but the old lapdog sees him heading after the leopard with great speed, and figures that something must be up. The  monkey  soon catches up with the leopard, spills the beans and strikes a deal for himself with the leopard.

The young leopard is furious at being made a fool of and says, “Here, monkey, hop on my back and see what’s going to happen to that conniving canine!

Now, the old lapdog sees the leopard coming with the monkey on his back and thinks, “What am I going to do now?”, but instead of running, the dog sits down with his back to his attackers, pretending he hasn’t seen them yet, and just when they get close enough to hear, the old lapdog says.
“Where’s that damn monkey? I sent him off an hour ago to bring me another leopard! ”

Moral of this story…

Don’t mess with old farts…age and treachery will always overcome youth and skill! Bullshit and brilliance only come with age and experience.