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Avoid These Debt Reduction Pitfalls

Carrying a lot of debt almost seems to be the American way. But the challenges debt can pose are no laughing matter. Debt has the ability to negatively affect your future plans, outlook on life, ability to retire comfortably, and even enjoyment of life. Unfortunately, many of us know from experience just how much impact debt can have on one's life. Yes, debt is one of life's great stressors. Consider how much better you would feel if your debt were completely eliminated. You would be free to spend your money on whatever you want rather than debt payments. Oh, what a different, liberating lifestyle you could have! Getting out of debt can be one of the very best things you can do for yourself and your family. Eliminating your debt requires conscious effort and a plan.

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Avoid These Debt Reduction Pitfalls

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  1. Avoid these debt reduction pitfalls “Debt is the worst poverty”-Thomas Fuller

  2. Debt: A Stressful Way of Life • Debt has the ability to negatively affect your future plans, outlook on life, ability to retire comfortably, and even your ability to enjoy life. • Consider how much better you wouldfeel if your debt were completelyeliminated.

  3. Managing Debt Without the Repercussions • Rather than being a slave to debt, you can effectively manage and eliminate it. • Identify the way that’s best for you and avoid the pitfalls that could come with your choice. Your answers to debt elimination are only a click away.

  4. 6 options for eliminating debt

  5. Know the Dangers ofDebt Elimination Solutions • Potential Pitfalls:

  6. “Rather go to bed supperless, than rise in debt.” -Benjamin Franklin

  7. Debt Settlement: How it Works • Stop making payments on your debt. • Negotiate a lesser amount than the true balance as payment in full. • The creditor will likely take something now rather than risk getting nothing later.

  8. Debt Settlement: Potential Pitfalls

  9. Debt Settlement: Potential Pitfalls

  10. “I say to you never involve yourself in debt, and become no man’s surety.” -Andrew Jackson

  11. Debt Consolidation - Home Equity Loan:How it Works • If you’re a homeowner, you can use a home equity loan to pay off debts, providing there’s enough equity in the home. • Get a handle on your debts with a low-interest loan that’s easier to qualify for. • Pays off your debts, leaving you with a single monthly loan payment

  12. Debt Consolidation - Home Equity Loan:Potential Pitfalls

  13. Debt Consolidation - Home Equity Loan:Potential Pitfalls

  14. Debt Consolidation - Home Equity Loan:Additional Pitfalls • Avoid the temptation to rack up new debt in addition to the home equity loan. • Taking on new debt that has collateral (like a home equity loan) to pay off unsecured debt (like credit cards) makes your personal liability greater. (You’ll now lose your home if you don’t pay.)

  15. “There are but two ways of paying debt: Increase of industry in raising income, increase of thrift in laying out.” -Thomas Carlyle

  16. Unsecured Debt Consolidation Loan:How it Works • Similar to the home equity debt consolidation loan, except you don’t need collateral • Pays off your debts, leaving you with a single monthly loan payment • Depending on the source of the loan and your credit, the loan may have a lower interest rate than your debt. It might also be much higher!

  17. Unsecured Debt Consolidation Loan:Potential Pitfalls

  18. Unsecured Debt Consolidation Loan :Potential Pitfalls

  19. Unsecured Debt Consolidation:Additional Pitfalls • These loans commonly come from those finance companies that send you loan offers in the mail. • Similar to some credit cards, the interest rate might be pretty good until you make a late payment; at that point, the interest rate will skyrocket. • That new interest rate may be applied all the way back to the beginning of the loan as well as to your current balance.

  20. Unsecured Debt Consolidation:Additional Pitfalls As with the home equity loan, avoid creating additional debt by using your credit cards all over again!

  21. Credit Counseling: How it Works • The credit counseling firm works with your creditors to eliminate penalties and fees and lower your interest rates. • Make one payment each month to the credit counseling company, who then distributes the money to your creditors. • The credit counseling company pays itself out of these funds.

  22. Credit Counseling: Potential Pitfalls

  23. Credit Counseling: Potential Pitfalls

  24. Credit Counseling: Additional Pitfalls • Beware of unscrupulous firms! • Compare your savings on your debts to the firm’s total charges to determine if this option would be beneficial for your situation.

  25. “Do not accustom yourself to consider debt only as an inconvenience; you will find it a calamity.” -Samuel Johnson

  26. Bankruptcy – Chapter 7:How it Works • Chapter 7 bankruptcy will essentially wipe out all your unsecured debt. It won’t help you with your house or car loan. • Any non-exempt assets that you own can be seized by the courts and sold to pay your creditors. However, most of your assets might be exempt. • State laws surrounding bankruptcy can vary dramatically; educate yourself before you take the plunge.

  27. Bankruptcy – Chapter 7:Potential Pitfalls

  28. Bankruptcy – Chapter 7:Potential Pitfalls

  29. Bankruptcy – Chapter 13:How it Works • Partially discharges your debts – you make payments to the court on the rest. • You can keep more of your property than with Chapter 7 (if you have a significant amount of personal property). • Stops foreclosures on your home. • State laws vary considerably.

  30. Bankruptcy – Chapter 13:Potential Pitfalls

  31. Bankruptcy – Chapter 13:Potential Pitfalls

  32. “He looks the whole world in the face for he owes not any man.” -Henry Wadsworth Longfellow

  33. A Debt-Free Existence is Possible !

  34. Be Sure to Consider the Effects on:

  35. Give yourself the gift of being debt free. Get started today!

  36. We hope you enjoyed your Special Report! Curtis Roese is an experienced professional with extensive experience in personal finance and small business matters. Curtis writes and publishes articles, courses, guides and special reports on his personal finance blog. Common Cents Wisdom is a website with hundreds of informative articles, special reports, resources to assist you with all of your financial concerns and a free monthly newsletter. Sign up to receive your free eBook "Common Cents" and get started today on the road to financial freedom!

  37. This Free Course Includes: • A Complete 80+ Page, 16-Module Home Study Course in PDF format • Companion Worksheets and Cheat Sheets • Budget Helpers, Worksheets, and Trackers • Bonus Audio Interviews with Financial Experts • My Secret Resource List of Helpful Money Sites, Tools, and Calculators • Bonus #1: Boosting Your Value Without a Formal Education • Bonus #2: Building a Wealth and Prosperity Mindset • Bonus #3: 25 Ways To Protect Your Identity • Don’t Delay! Get Your Free Course Now!

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