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It's time to go on a debt diet.

Carrying around a few thousand dollars in credit-card balances may have seemed perfectly acceptable a few months ago. But in this financial crisis, it can be downright dangerous to your financial health. Credit-card companies are jacking up rates and fees, making it easier to fall deeper in the hole. And during a recession, when the possibility of layoffs looms larger and most of us feel increasingly vulnerable, debt becomes even more pernicious.

Unfortunately, even if you are determined to be more disciplined, paying off your debt can be just as slow and frustrating as trying to work off those irritating love handles. Just as we have to keep eating when we're dieting, we still may have to use our credit cards for travel and other needs.

Read full article: The Debt Diet: Ways to Trim Unsightly Bills


Resources:
Debt Consolidation Information
Debt Consolidation Companies

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When faced with serious debt problems, people run to credit counseling agencies for help. True, there are many reputable non-profit organizations that offer credit counseling and help on financial management. However, there are also many organizations that pretend to offer credit counseling but charge their clients with unreasonably high fees for their services.

The Federal Trade Commission (FTC) warns the public against such credit counseling agencies that claim to be non-profit but asks for unreasonable payment from their clients who are already swamped in debt. Some of these fake credit counseling agencies use deceptive tactics on customers who do not have any idea that they’re dealing with the wrong credit counseling agency.

What is a Debt Management Plan?
For instance, some credit counselors may advice consumers to enroll into a debt management plan. With a Debt Management Plan, the consumer will be submitting a monthly payment to the credit counseling agency. The agency in turn, will divide the payment and distribute it to different creditors. It is true that creditors can give lower interest rates and even waive penalties for those who are paying through a debt management plan.


Read full article: Checklist for Those on Debt Management Plan


Resources:
Debt Consolidation Information
Debt Consolidation Companies

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Q: As credit tightens, what options are available to consolidate debt? What are some of the safest ways for consumers to consolidate debt?

As credit markets continue to struggle, many consumers are concerned about how to best manage their current debt load. If you are fortunate enough to be a homeowner and still have some equity left, a consolidation refinance may be one option to consider.

While most credit cards have variable rates of interest, home loans have the option of a low permanently fixed rate. Even with the financial crisis in full swing, mortgage interest rates are some of the lowest available in the finance marketplace. Underwriting criteria have toughened up in recent months, so you actually have to prove you can pay back the new mortgage.

Read full article: Financial Focus: There are still ways to consolidate your debt


Resources:
Debt Consolidation Information
Debt Consolidation Companies

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WASHINGTON – Federal bank regulators have rejected a request by banks and consumer advocates for a program to let lenders forgive huge portions of credit card debt.

The Office of the Comptroller of the Currency rejected the request for a special program that would allow as much as 40 percent of credit card debt to be forgiven for consumers who don't qualify for existing repayment plans.

An unusual alliance of financial industry interests and consumer advocates, represented by the Financial Services Roundtable and the Consumer Federation of America, made the request to the Treasury Department agency on Oct. 29. It demonstrated the urgency of the situation in a deepening economic crisis: consumers — even those with strong credit records — defaulting at high levels on their credit cards, while banks battered by the credit crisis bleed tens of billions from the losses.

Read full article: Regulators nix credit card debt forgiveness plan


Resources:
Credit Builders
Credit Reports and Repair

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IF YOU'RE A homeowner saddled with debt (and we're talking about high-interest debt like the kind you pile up on credit cards), then a home-equity line of credit, or HELOC, might be a good escape hatch. After all, the average credit card now carries an annual percentage rate (APR) of around 14%, whereas the average APR for a $30,000 HELOC is about 8.2%, according to Bankrate.com. And that's before you consider the tax break on your interest payments.

From a pure number-crunching perspective, consolidating high-interest, nondeductible debt into a HELOC or a home-equity loan, or HEL, is a no-brainer. Of course, your home is the collateral for such a loan, and foreclosure could leave you bunking down in Mom's den. So look in the mirror. If you're the type who will simply accumulate more debt once you've wiped the slate clean on your credit cards, forget the loan.

Read full article: Ready to Consolidate That Debt?


Resources:
Free Debt Consolidation Articles
Free Debt Consolidation Companies

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