Where Does Debt Go? To The Mint!!!

Debt consolidation loan, bankruptcy or debt reduction? Out of these three terms, which one sounds best to you? Okay keep your answer to yourself for a moment. Lets look at them briefly so I can get to my point.

Debt Consolidation
Basically with this type of plan to get out debt; You actually keep yourself in debt but only to one entity or company. Let's say you owe an Alltel dealer $400.00 bucks for your phone bill; you can't pay that! You really can't pay that when you owe the bank or credit union $355.00 a month for your car loan. Maybe you buy a lot stuff you don't need Columbia House Cd's and your subscription is for 12 new items each month. It's a good deal for 90 bucks. I think you get the picture. Anyway you get call from someone or an email and they tell you they'll help get all those bills paid. If you say okay what they're gonna do is pay those bills for you. But! Your gonna owe them now and depending on how much of your debt they paid off and what your payment to them will be; you could be paying 5-10-15 years. These loan officers can give you different interest rates and the option to pay more than the agreed monthly to cut the time it will take to pay of the loan. Really it comes down to paying for instance, $200.00 a month to one loaner instead of $500.00 four ways to past due accounts with service providers and other loaners. Could be a good plan..

Bankruptcy
Debt consolidation may be out of the question if your more than $75,000 in the hole. So you could look into bankruptcy. This is a process of legal proceedings (you have to get an attorney), signing your life away and maybe even panic attacks. This is especially if your filing because you lost your job and the payment for the house, car, home remodeling, college loans and medical insurance is $3,500.00 by the end of the month; and your 3 months behind! Also there has been recent changes in bankruptcy law. These changes make it more difficult to file. One may have to still pay there debts even it they do succeed with the whole thing. Did I mention that part the deal could be a requirement to go through debt counseling? This might work out well for some people.

Debt Reduction
Compared to the two debt resolution above, reducing your debt is the most responsible and noble thing to do. This is where you would call you Alltel dealer (as in the example about debt consolidation) and tell them that you are willing to pay $190.00 dollars right now to call it even steven. Or tell them your make $10.00 payment every week until you pay 85% of the $400.00 you owe. Sometimes companies will do this because they hate write offs. They take a loss anyway, so maybe what you are willing to pay is more than they'll lose. This is something that is possible and logical. True debt reduction is plain common sense and hard work.

My Point
It seems like everyone has to work harder for their money these days and quite frankly it's getting oppressive. There are many factors that determine this; inflation, corporate merging and the fact that to many people are saving to much money (the people that have it); the people that don't have it are spending too much. Money is meant to circulate in a balanced manner. That's why we use the word currency to define it. I don't know what the answer for this is, but we all could use a little more self control; either way. I suggest for those that don't have money to spend; but are using tons of credit, STOP. Stop using credit cards. Decrease your expenses. Try finding ways to produce instead of consume. Learn ways to increase your income then spend wisely. First some may have to learn wisdom and that's a good thing. The weight really does come down on the little guy, but if you take it right, it could make you stronger. This is part of the purpose of this blog.