A blog beautiful: February 2009

I can blog blog blog about fashion, dining and wines but really how many percent of our population is interested in these things right now when they are more concerned about saving money, debt elimination and business cycle contraction.

It’s hard to be uber jolly and hip when your debt is up to your hip, when your friends just got laid off from work and big companies around you are closing.

We live in the world of “life takes visa” which really means I’ll give you $500 you give me a thousand. Remember the time your friend invited you to Galley Bay Resort & Spa in Antigua? Or Saint-Tropez? You called visa and after hearing “to-check-your-balance-press-one-you-have-10,000-dollars…” your off to buy your swimsuit 1, 2 and 6 plus tanning lotion, plane ticket, hotel reservations etc…or that Gucci dress that makes your heart skip a bit. You have no money in the bank but you have in you credit card! So voila!!

Five months later you can only afford to pay the interest rate and your principal or the amount you owe is not moving. You can’t use your credit card anymore as you’re over the limit but your debt is going higher than ever. This might not be your case at all but if you’re reading this, you might be someone I know, someone who got nothing important to do today or you are in dire need of some debt relief in order to taste “la dolce vita.”

Below I summarized the types of debt relief solutions available. Decide which one works best for your situation and research companies before actually dealing with them as there are a lot of debt relief services scams who might have interest rate higher than all your interest rates combined.

Debt Consolidation is when you combine all of your bills into one monthly payment,
Therefore making it easy for you to pay those bills and stop or lower late fees.

Debt Settlement is also called debt negotiation may help you save up to 60% overall by getting credit card companies to agree to reduce your credit card debt or lower your monthly payment. This may affect your credit score as your account will be marked as ‘paid as agreed’ or non payment. But it’s better than bankruptcy.

Debt mediation is a form of debt negotiation but normally involves a very large amount of credit card or other unsecured debt. Mediation may be handled by an attorney or law firm that specializes in working on your behalf to negotiate debt settlements for you.

Debt Reduction is when you reach the end of the road and don’t know if your going right or left. What the company would have you do is ignore your creditors for up to six months while at the same time saving all of your money to use to negotiate which might be less in the long run. However this will demolish whatever credit score you have. So you may want to avoid this unless there are no other options.

Debt Management where companies will help you handle your finances. This is a sloooowww process, this could take up to 5 or 7 years and the only thing eliminated is your interest rate you will still have to pay your principal and is more time consuming.