How to Check Your Debt With the Ease of Your Computer

When it comes to handling your finances, the issue of how to check your debt online can be a very tedious, undesirable chore, but only if you let it be that way.

There is probably no better way to stay up to speed with your finances than to do a simple online check, but you have-to-have some sort of system in place, otherwise you will waste more time and effort than you should.

Checking your debt online is one of the easiest things you can do, with a lot of facilities in place, erected so that you can conduct a safe, quick check of where your creditors stand with you.

The most popular way is by simply taking a manual approach to proceedings, by keeping records of each of your creditors and making use of each of their online debt-checking facilities. If you ask them they will most likely point you in the right direction, but this is usually present in the form of a clients' login section of your creditors' websites, and they never go out of their way to conceal this from you. In fact, this feature is probably the easiest to spot as it has marketing implications to it, in that there exists an exclusive club, for members only, including you, albeit a club for people who owe money.

It is always good practice to keep as much backup data as you can, about all your credit and any payments you may have made up to so far, as anything could happen that could call upon your need to make reference to these records.

Something like a dispute may ensue, during which you will have all the data available to back up your arguments, but that is hopefully a situation that will never have to be entertained.

It helps to be safe however...

While making use of individual debt checking facilities, offered by each of your creditors, you should supplement that with an all-in-one, online solution. You can make use of debt management facilities, which are available for the sole purpose of storing data about your credit management.

You don't have to worry about security, although it is suitably catered for, as you won't be dealing with any hard currency. What you will be dealing with is information concerning your creditors and your payments.

Only information like receipt numbers, invoice numbers and payment dates will be stored in this manner, with the whole idea behind it being that you have all your data in one, central location, which you can apply some analytics to.

Adding up everything you owe and calculating how much time it will take to pay back everything, for instance, are two of the most popular features such platforms are used for and you can probably see the usefulness thereof.

In addition to all the analytical features, you have the added advantage of having yet another location to store backup data, which can come in useful as mentioned earlier.

Make use of the technology that is available to you and check your debt online.

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How A Debt Review Company Can Help You

Debt is something that seems inevitable to most people. However, debt can become a real issue when you are overly indebted. Once you cross a certain point, you might require professional help to set your finances right. A debt review company can help you in different ways to pull you out of the financial mess that you find yourself in. Here is a list of benefits that you could enjoy when you enlist the services of a debt review company.

First of all, you will be assigned a qualified debt counselor to review your particular case. Since they are experienced in finance management and debt counseling, you can rest assured that you are in good hands.

Probably the greatest danger of being in debt is your vulnerability to legal action that creditors can take against you for non-payment of debt. You could also have a considerable amount of tension and worry when you are in a financial bind. This is where a debt counselor can really make a difference. Within a span of five days from the date of commencement of the debt review process, you would be protected from any kind of legal action that your creditors wish to take against you.

Your debt counselor would act as a middleman between you and your creditors. The very fact that you would no longer have to deal with your creditors directly will take the pressure off you considerably. The debt review company would act as a buffer and shield you from any kind of hostile actions by your creditors.

Debt counselors are professional negotiators and can communicate effectively with all kinds of creditors. They will be able to effectively represent your case with your creditors and work out a good solution on your behalf.

Your counselor will then restructure your monthly payments so that you can make your payments in manageable installments. You will no longer have to default on your payments for lack of funds. The debt review process would take into consideration, your income and your expenses and work out a way to make your payments from the money that you have left over after all expenses are met.

For this process to work effectively, you need to extend your full cooperation to the debt review company. You have to wholeheartedly follow their advice and meticulously implement their suggestions. If you would do that, you will find yourself getting out of debt pretty soon. Within a short span of time, you could be totally debt-free and ready to start a new life of total financial freedom.

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Three Factors to Consider in a Debt Management Program

If you have found yourselves mired down in debt with maxed-out credit cards, your first step is getting together and developing a budget that starts chopping away at that stack of bills. Debt management includes other options if you're seriously in trouble. Which method: credit counseling, debt consolidation, debt settlement or -- heaven forbid bankruptcy -- depends on several factors.

Secured
You may have seen the reality TV program Pawn Stars. Pawning is a simple definition of a secured debt. You take your engagement ring set and give it to the pawn shop for a pre-determined length of time in exchange for a loan. When you pay back the loan you get the rings back. If you don't pay the loan back, the pawn shop keeps the rings. The lenders for secured loans such as cars, boats, furniture and your house are not usually agreeable to any sort of debt management solutions. You don't pay, you lose the asset. The exception would be a home mortgage lender which may be open to loan modifications.

Unsecured
These are credit cards, store cards and personal loans. There is nothing for the lender to repossess if you default on the loan. Most creditors when faced with the reality that the debtor is in trouble are willing to work with you. Getting something for the loan is better than no payment at all. Creditors, both secured and unsecured review your credit report on a regular basis. It's obvious which are getting paid and which aren't. The collection efforts may increase from those that are getting farther behind.

How Much You Owe
A few thousand dollars in credit card balances might seem frightening to someone who is used to paying their balances in full every month. You might just have to tighten your belt a little and use the extra money from reducing expenses to get rid of the debt within four or five months.

The story is different if you find yourself only being able to make the minimum payments. If that's the case, credit counseling may be the answer. The counselor will work with you to come up with a budget that allows a hefty payment to your creditors. He'll then work with the unsecured creditors to get them to waive any late fees, decrease the interest rate and accept your new payment arrangements. Debt settlement is asking the creditor to accept a partial payment as payment in full. If they feel there's a good chance you'll declare bankruptcy they may be willing to take the partial payment.

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3 More Factors You Should Consider in Debt Management

Are you slowly sinking below a flood of debts? Are your credit cards maxed out and you can only make the minimum payments? If so you should consider starting a debt management program. Your first step is gathering all your financial information and creating a budget that begins to chop away at that stack of overdue bills. Debt management includes: debt consolidation, credit counseling, debt settlement and as the last resort bankruptcy.

How Much Debt
Take a good look at how much unsecured debt you have. If it's only a few thousand dollars it might take just six months to pay it all off. Debt over $10,000 requires more intensive action. If your total debt compared to your income is more than 30 percent of your income, you are in trouble. Credit counselors will set up a budget with you and then negotiate with your creditors to lower the interest rate, waive late payment fees and membership fees. They do not negotiate to decrease the amount owed. If you do that it's called debt settlement.

Income
You might not think income has any impact on debt management but it does in the sense that creditors can garnish up to 25 percent of your wages if they win a judgment. Rather than settling with you for less than what you owe, or agreeing to spread out payments, the creditor may decide to pursue litigation. Income is not reported on your credit report. However, if you are going through debt settlement or credit counseling, creditors can find out through the budget paperwork you complete.

Your income also affects whether you qualify for a Chapter 7 bankruptcy or must go for a Chapter 13. The difference is the Chapter 7 gives you a fresh start the minute the bankruptcy is finalized while the Chapter 13 is a three to five year repayment plan of your debts. That repayment plan pays off as much debt as your discretionary income allows.

Assets
Your bank accounts, stock portfolio, house, car and personal property are at risk if a judgment is obtained by a creditor. The creditor will obtain a court order that requires you to disclose all your assets. The credit counselor may encourage you to sell assets and put the proceeds towards the debt. If you declare bankruptcy, the assets that are not exempt may be sold by the bankruptcy trustee and used to pay down debt. The exemptions vary by state. Florida allows you to exempt all the equity in your home while Arizona only allows up to $150,000.

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What OFT Expects Of A Debt Management Company?

Cash does not come simple and easy these days. It is a reality that a lot of people work hard to try and make ends meet every day. Apparently, if the earnings are not enough for every day expenses, most often than not, we are inclined to borrow funds from our peers or various loan providers when we can no longer stretch our budget. And when we fail to manage our finances and were not able to differentiate needs from wants, or perhaps due to unavoidable circumstances like job lost or being ill for a long time, we end up being unable to work out our debts when they are due.

Unless perhaps we informed our creditors of our situation and they understood the circumstances, then the interests continue to stack up and debts gets too big that we can no longer afford to pay them off. Now, we have to work them ourselves first through self-negotiation and getting into a compromise agreement. If after exhausting all our efforts and everything did not work, we need to consider another option, and that is tapping a debt management organization.

"Why is it necessary?" you may ask. A debt management company mediates between lenders and debtors. Obviously, there are some benefits when we allow someone to do the things on our behalf. Our negotiation becomes effective if there is a third party involve. There are several dozens of debt management companies, which are authorised by the government and are under strict monitoring of the Office of the Fair Trading (OFT) to act as third party individuals.

The OFT sees to it that the third party debt company handles their clients with utmost care as they may be heavily indebted and that only specific need and restricted solution should be in place. They must carry out a realistic and reliable assessment of client's personal circumstances and financial position to better gauge the problem and bring about applicable solution.

The OFT also expects debt company to set aside money-making interests when any measures to be done will be detrimental to their clients. It is true to say that certain advice is not appropriate to everyone in matters concerning how to deal with their debt problems. Hence, a debt company must see to it that any advice given and action taken are accurate, timely, clear, and sufficient and in accordance to their specific circumstances.

What OFT simply wants is transparency. It may be in the service being provided to their clients or in the process of marketing of their services to the public. If you are engaged in certain debt management company and does not carry out what mentioned in this article, get an advice and call the OFT.

The Debt Support Company is an independent ethical, debt management company that works to put you first.

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Do You Pay Down Your Mortgage Or Invest In An RRSP?

It turns out that the answer to this question is very personal and not hard and fast. There are a number of factors to consider such as your mortgage rate, your rate of return on RRSP (Registered Retirement Savings Plan) investments, and the time remaining until you must collapse your RRSP. There are also intangible factors like how you feel about risk, loss and volatility, time and effort expended on investing, and whether this should be minimized or not. It is possible to do both - alternating between paying the mortgage only in some years, and emphasizing the RRSP in other years. This article is to make you aware of these factors as they apply to your situation, allowing you to make more informed decisions.

To decide how to allocate among the two options, there are a series of questions that need to be answered. People tend to put money in separate "buckets", and treat them as separate, but in actuality all of your money is really in one bucket. As an analogy, if you pour liquid into a tank, and there is a leak at the other end of the tank, what is in the tank is the net result of what is being poured into it and leaking out of it. In terms of money, the net income generated is what you are earning on investments, less what you are paying in debt interest. Your financial situation should be considered as a unit to make decisions that benefit the whole picture.

As for assumptions, this article assumes you have both a mortgage and an RRSP, and you can afford to invest in your RRSP over and above what you are paying on your mortgage. If you have a mortgage but no RRSP, the question might be "should I start an RRSP or not?" A second assumption is that your TFSA (Tax Free Savings Account) is not part of the decision, as the tax treatment of the TSFA is different than an RRSP. As a third assumption, taxes will be disregarded in terms of comparing mortgage rates to investment returns. The basic reasoning behind this is all many possibilities exist with respect to taxes. When you contribute money to an RRSP, you get a tax refund for the money deposited. When you withdraw money from the RRSP later on, you will pay taxes on the whole amount being withdrawn. The tax rate may differ between these two dates, and your income situation and the timing of the withdrawals will also affect the tax rate. The longer the money sits in an RRSP without being withdrawn, the greater the effect of compounding, and the less of an effect taxes will have in terms of whether an RRSP is worth having or not. Should you lose money investing in an RRSP, the situation would be much worse, as you may be taxed even if you lose money on your investments depending on how you withdraw the funds. If you decide to keep the RRSP until it needs to be converted into a RRIF (Registered Retirement Income Fund), there will not be a one-time tax bill on deregistering the RRSP, as the taxes would be spread over your time of retirement. Since, there are so many possibilities, the tax effect is ignored, but should be considered on an individual basis as part of a long term financial plan. A tax calculator is provided below for information about your current tax rate. Lastly, the interest paid on the mortgage in this article refers to only the interest amount - it is not including the principal. The principal on a mortgage is paying back the loan, and you own a house or property in exchange for that loan.

The key question of this article is "How much do I pay on my mortgage, compared to how much do I earn in my RRSP?" If your RRSP return exceeds the rate of return (or interest rate) on your mortgage, or you make more money in your RRSP then what you pay out in interest for your mortgage, then put as much money into the RRSP as you can. This assumes the RRSP return is higher than the mortgage return on a consistent basis (I would use 5 years as a time period), after all fees and losses. If the reverse is true, pay down your mortgage as much as possible, and forgo the RRSP contributions until this is no longer true. The phrase "until this is no longer true" could mean your mortgage is paid off, your investment returns have increased, or your priorities have changed for a variety of reasons. This question should be revisited each year or when your financial picture changes substantially (a divorce, children being born, children leaving home, job loss, illness, a new home, a large one-time expense, a large change in your debt situation, an inheritance, or a large investment gain to name some examples).

For the mortgage, the rate could be fixed, but if it is variable, you should look at 5 years of interest rates to get a better idea instead of the last year only. The idea is to know what the mortgage rate will be in the future. This may be easy to figure out, if the rate is locked in for so many years. However, you may have a large change in the interest rate once you renew if it rises or falls dramatically. If this is true for you, then assume the present rate for now, but use a higher rate when the renewal date approaches.

For the RRSP, look at the return you have achieved over the last 5 years after fees and losses. Looking at the RRSP side of the equation, your return would have to be consistently better than this mortgage rate. The easiest way to do this is calculate the total of how much money you contributed to your RRSP over the last 5 years, and take the latest total market value and subtract the two figures. Divide this difference by the number of years that you are using as an estimate - in this case 5 years. This calculation is very approximate, especially if you have large variation in contributions over the years. If you have large annual changes in your RRSP balance, I would do this calculation each year. Find the sum of the gains or losses for each year to calculate how much you made net of all of the money you contributed and all the fees paid out. If you withdrew money from your RRSP over the last five years, this should be subtracted from the money you contributed, since this money reduces the book value of your account. If you subtract present total market value less all the money you deposited and withdrew from your RRSP account, and as an example have a total of $20000 over 5 years, this is an average of $4000 per year. If the balance after all the money deposited or withdrawn over the 5 years amounted to $40000, then you have a return of about 10% per year ($4000/$40000). It should be noted that this method is not factoring in the effect of compounding, so it is not entirely accurate. Since the numbers being input are used to estimate a future decision, and these numbers are uncertain, they serve to provide an approximation of what to consider in the decision process, as more exact numbers are not likely to make a difference in the decision.

So far, the calculations are the only thing considered. What about other factors like time expended to make this decision, effort to manage money, and stress/risk with respect to volatility and losses? If you manage the money yourself, and it takes a fair amount of time, and it causes stress, and the returns are not that high, is it worth to manage it? A mortgage paid down is risk free, requires no research, wastes no time and results in little energy expended. You know exactly what the return will be because it is written in the contract (unless it is a variable rate mortgage). You also know your fees of discharge, transfer, appraisal, renewal, and any other fees which should also be accounted for in this calculation. RRSP Investments will take more time to research, make trading decisions, and deal with market volatility. If you use an advisor or broker, the time spent with them and making sure they are doing a good job is time that you must factor in. The same applies with your mortgage broker or your bank with changes in your mortgage.

For most people, money has a psychological and emotional component to it. People make decisions about money based on habits. All of the blind spots in people's mindset: fears, passions, beliefs and so forth are evident in their relationship with their money. The decision to have an RRSP or a mortgage may well be coming from earlier beliefs, and how money is invested also comes from these beliefs - so the best decision would also feel appropriate and have a sense of integrity and consistency for you. If it doesn't, the numbers are likely not telling you the whole story, and you should ponder the question a bit further to see what the blind spot is that is causing this feeling. The conclusion is that the decision is indeed personal, and will fit your situation well if handled properly.

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South Africa: Debt Is Nothing to Be Ashamed Of

The amount of people becoming over indebted is ever-increasing world-wide. The European credit crises' influence on the South African sector is still unknown, but financial advisors have been speculating if Absa's affiliation with its main shareholder and European bank, Barclays, has something to do with the decline in Absa's shares. The bank also had to write off much more bad debt than they anticipated, especially in the mortgage sector. If one of South Africans' main financial institutions is showing signs of credit difficulties amongst its clients, there might be reason for worry.

However, consumers aren't taking financial advisor's advice to heart. It's certainly not showing in the rise of unsecured loans and car sales. South Africans' appetite for loans might be a sign of some greater financial difficulties, but the South African Reserve Bank reassured the National Credit Regulator that this is not the case. The NCR's main concern is responsible credit lending and therefore it is their responsibility to ensure that a credit bubble doesn't rear its head in the future.

Admitting that you are over indebted before being issued a creditor's letter can save you time and money, but many consumers don't even respond to a letter 129 after they have received one, never mind seeking debt help the moment they cannot keep up with all their repayments. The letter 129 informs a consumer that they are 30 working days late with their repayment and that they have 10 days to smooth things out with their credit provider. It also informs them that they can seek debt counselling to restructure their credit instalments according to their affordability.

Yet, many consumers don't take the chances they get and seek the help of a debt counsellor when it is almost too late. According to the South African law, once a consumer has received a letter 129 for a debt, that debt cannot be included in the debt review unless some other arrangement can be reached with the credit provider. This means that all the consumers other debts have to be restructured around their living expenses and debt that they have already received a letter 129 for. The more debts they are in arrears for, the less there is that a debt counsellor can do to organize a way for the consumer to afford their debt.

The aim of debt counselling is getting out of a bad debt situation, not just making debt payments more affordable. It is therefore imperative that a debt counsellor can calculate a way for the consumer to afford their repayments and living expenses. The National Debt Mediation Association (NDMA), a non-profit organization established by the credit industry to combat over-indebtedness of consumers, warns consumers that it is extremely important that they contact their credit provider once they have received a letter 129. The debt counsellor can do this on the consumer's behalf or the consumer can seek the help of an alternative dispute resolution agent. The NDMA is the national alternative dispute resolution agent for registered South African credit providers.

With all these channels put in place for consumers to avoid over indebtedness or remedy their situation if they should be over indebted, why are consumers still facing legal action from creditors on a daily basis? In most cases, consumers didn't use the tools to their advantage or in cases where the consumer didn't have an income, debt counselling wasn't an option when they couldn't repay their debts anymore. However, South Africans are seeking the help of debt counsellors more frequently, especially in the last year, but it is still nowhere near the amount of consumers who are over indebted.

Could South Africans be too proud to seek help? Of course you can remedy your own situation, but this is simply not a practical approach and few people have the knowledge and time to negotiate with creditors or the discipline to stick to a tight budget and avoid the lure of their credit cards.

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A Structured Settlement

Process for Receiving the Money

After a few years of payments company may come into the picture. They will suggest an agent who will buy the structured settlement contract at a lower price than the settlement value. The complainant will need to do this in order to acquire a lump sum of money. If the complainant neglects this matter, the company may refrain from repayments as stated in some settlement contracts. Therefore, the complainant must read the contract to make sure they are following rules set down.

The structured settlement company will be happy if you follow their structured settlement contract. Even though, the contract may be sold for a lower price but you could still gain a large amount of money if you choose to be paid in a lump sum of money. On the other hand, you can also search for a note buyer to fix the issue related to your contract. The note buyer earns their profit for a longer period gaining interest on the contract but they can easily sell a note. They can also reinvest in the future.

Five Things to Consider in Selling your Settlement

Since you already know the process for receiving the money, its time to know the things that are needed to be considered when engaging in structured settlements. Benefits and disadvantages are the first things to be considered when selling.

1. Legal Restrictions

This is the nature of some settlements contracts, so read carefully and have a legal representative look it over too. Just like a legal document, there are legal restrictions that need to be followed by both parties.

2. Contractual Restrictions

Aside from having, legal restrictions some contracts will be valid only for one client. Therefore, it would be difficult to resell them once the contract is over.

3. Tax Considerations

He or she may pay less tax or even be tax-free totally. He or she may pay less tax or be tax-free when he or she decides to be paid by installments. On the other hand, if he or she decides to go for a lump sum of money, he or she may be subject to tax liability since he or she will receive a large amount of money.

4. Low Offers

Since you will receive a contract or a note, you need to seek for low offers. To seek low offers, you can compare prices and choose the lowest price.

5. Seek a Lawyer or an Accountant

When reviewing documents you need to find a good lawyer that specializes in these types of contract. By letting a lawyer review the contract, you will be rest assured that your rights are being protected in case of future complications. If you needed the sale of your structured settlement to be approve in the court, your lawyer can lend you a hand in the process. On the other hand, an accountant can help you decide between the options of installments or a of lump sum of money. They can help you setting up a reasonable price of the structured settlements.

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