Debt Problems and A-Z of Debt Solution

(PRWEB) February 16, 2005 -- In the present era where financial breakdowns and debt problems rein supreme, some programs like can turn your nightmares into sunny beginnings. The consumer debts in America have reached staggering levels after more than doubling over the past 10 years.

According to the figures from the Federal Reserve Board, consumer debt hit $1.98 trillion in October 2003, up from $1.5 trillion three years ago. There are presently 5 to 7million Americans, who are financially overstressed. The fourth quarter of 2004 found consumers exhibiting little confidence in the economy, with unemployment at 5.4 per cent, individual bankruptcy filings at an annual rate of about1.6 million. Americans pay more than $65 billion dollars in interest to banks annually, and unsecured credit delinquencies are at an all-time high.

According to American Consumer Credit Counseling, the total U.S. credit card debt in the first quarter of 2002 was approximately $60 billion. Credit card debt carried by the average American: $8,562 (Approx.). From 82 million in 1990 to 144 million in 2003— the amount they charged during that period grew by a much larger percentage: approximately 350 percent, from $338 billion to $1.5 trillion.
With the major options a debtor has today clearing your debts is become a lot easier.

Debt Consolidation: According to the survey in 2004, thousands of debt struck people has been benefited by the debt consolidtion program online. Debt consoldation programs consolidate your entire loan onlne in a single amount and your late fees are also deducted. This is the most popular way of solving your debts in the new millennium.

Bankruptcy: Data compiled by the Administrative Office of the U.S. Courts show that the number of bankruptcy filings dropped by about 1 percent during the 12 months that ended June 30, 2004, from 1.65 million bankruptcies to 1.63 million. Personal bankruptcy filings have nearly doubled in the past decade, rising 7.4 percent to more than 1.6 million in the 12 months ending September 30, 2003. “Total bankruptcy filings remain at historic highs. Chapter 7 bankruptcie and Chapter 13 Bankruptcy: Statistics released by the administrative office of U.S. Courts show that a total of 388,864 new non-business bankruptcy filing in the United States during the quarter ended September 30, 2004, including 274,196 chapter 7 filings and 114,454 chapter 13 filings.

Debt Settlement: With setlement, a third party or you yourself negotiate with your creditors to reduce the debt amount. Debt Settlemnet agencies work with your creditors to reduce your debt balance, sometimes by as much as 50-75%. Let's say you have racked up $20,000 in unsecured credit card debts nline. You owe $10,000 to one credit card Company, $6,000 to another one, and $4,000 to a third one. You agree to contract for a five year debt settlement plan oline where you pay $250 a month to the Debt settlement company olnine. $250 a month for five years is only $15,000, so you're saving $5,000 and you'll be debt-free in just five years by opting Settlement Plan.

Debt Management Programs: More than 3 million people contacted a credit counseling company last year for help in managing debts. Credit counselors collected about $7 billion in payments as part of debt-management plans, which typically allow consumers to pay back their credit cards and other unsecured loans in three to four years at reduced interest rates. Clients who successfully completed a DMP felt that it provided a wealth of different benefits, both immediately and long run. Almost 85% of clients felt that the ability to payoff their debt was beneficial and almost 55 % felt that the plan helped stop collection calls. A Total of almost 38% felt that they improved their creidit worthiness and almost 51% felt that they improved their overall financial status.

Credit Counseling: Creditt counseling agencies help you to be debt free, but basically they don’t consolidate your debt. They will work out payment plans with lower interest rate and fees for your outstanding debts. You’ll make one monthly payment to the counseling agency, which will pay all your creditors. Nearly 9 million people in financial trouble have some contact with a consumer creidit counseling agency each year.

Budgeting: Budgeting is also a very important aspect in the debt solution plan. Make a budget plan and curtail any unnecessary expense. In a recent survey of average U.S Budget per household shows that a household allocates 33% of his total Income in housing, 13% in food, 5% in apparel and services omline, 19% in transportation ,5% in Health care ,5% in entertainment , 9% in personal insurance and pensions ,1% in life insurance and 10% for other items.

Home Equity Loan: There has been an increasing growth in the home equity rate in U.S. By the first quarter of 2003, home equity loan growth outpaced credit card growth by an average of 5.6 percentage points, onlin. By the same quarter in 2004, that figure jumped to 8.4 percent. What's more, U.S. home equity debt was at a record high of $415 billion for the second quarter in 2004, which is a 10 percent jump over the previous quarter, the FDIC reports. If home equity keeps increasing at current levels, it's on pace to break $500 billion by the end of the year.
http://www.debtconsolidationcare.com/