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Help to get out of
debt
Debt Help is the stepping-stone to debt elimination
and financial recovery. Debt help analysis guides
you to save money on interest charges. Consolidation
of your credit card debts and other unsecured bills
will allow you to get out of debt as quickly as
possible, save money on interest and late fees, stop
creditor harassment, save your good credit rating or
begin immediately to repair bad credit or negatives
on your credit report.
In
a recent survey it was reported that almost 58%
clients vouched for Debt Management Plan as the best
way to settle their debts. Another 42% client had
filed bankruptcy since dropping off a Debt
Management Plan or DMP.
Debt Management plans can reduce your monthly
payments, interest charges, penalties and some times
even the repayment period. Even if bankruptcy seems
like your only solution, it may not be the right
debt help solution and may cost you for many years
to come. The loss of a job, divorce, credit card
spending and family medical emergencies among other
life style matters can cause negative money issues.
Most economists consider a ratio of unsecured debt
to annual income of 40-50% percent or more, as
being a strong indicator to bankruptcy. This is
taken as a ‘thumb rule’ in most of the cases. So in
order to protect him/her self from such crisis one
should keep his unsecured debt to annual income
ratio lower than 40 to 50%. For example if someone
has an annual income of £18’000, he should keep his
annual debt minimum £7’200 to £9’000 in order to
avoid his/her bankruptcy.
36%
or less: This is a healthy debt load to carry for
most people.
37%-42%: Not bad, but starts to restructure your
debt now before you get into real trouble.
43%-49%: Financial difficulties are likely to occur
unless you take immediate action.
50%
or more: Get professional help from debt counselor
to aggressively reduce debt.
You
should also control from having a large amount of
unpaid outstanding credit or using more than 80% of
your available credit (which causes a high debt to
income ratio).
It
is better to have a debt free life without having a
savings rather than maintaining debts along with
savings. The reason is simple. As the return on
short-term investment, i.e. savings is lower than
the interest payable on accumulated debt, it is
always advisable to pay the debt first rather than
go for the short term investment. Because a
repayment of single debt instantaneously may save a
lot of money in future. In other word, One pound
payment is better than one pound saving.
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