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Having a large debt problem can be stressful. The stress of meeting minimum repayments can have adverse affects on both your business and private life. Indeed, financial problems of often a primary cause of relationship breakdowns and poor performance at work. Divorce, separation or a sacking from work can only exacerbate the problems. Then there is the phone calls from debt collection agencies or creditors that can add to the stress. So what can you do to avoid getting into a situation like this ? There are a few options open to you when you have debt problems.

Bankruptcy is often seen as an effective way to deal with large debt that has got out of control. However, it should really be seen as a last resort in a process that should start with talking with your creditors. Bankruptcy laws have changed making it harder to be eligible for a chapter 7 liquidation bankruptcy that clears debts. So bankruptcy may not be the solution to your problems. This article will deal with debt negotiation principles when it comes to talking to your creditors.

You may be quite apprehensive about contacting a creditor or debt collection agency about a debt that you owe them. The best way to overcome this fear is to get informed about the laws and practices of the debt negotiation process. This is the case when it comes to debt collection agencies contacting you as this can be stressful and invasive. There are strict laws governing the conduct of debt collection agencies. This is detailed by the Federal Trade Commission. Their website goes into great detail on the subject. If you feel that a debt collector has violated these laws in their dealing with you then you can contact the Federal Trade Commission.

Debt collection agencies are generally pretty impersonal but determined to get you to pay the outstanding debt. In most cases this is because they are paid per result. This means they may be tempted to resort to underhand tactics. By knowing your rights in a situation like this you can ensure that they do not try anything on.

The next thing to consider is your personal financial details. You need to know how much debt you owe. How this debt breaks down in terms of original debt and interest payments. You also need to work out how much you earn each month and how much money you have available to pay off the debt after essential expenses have been deducted. Basically, you need to get a firm understanding of what is a workable settlement or payment plan in the negotiation process. If you are not well versed in these facts and figures you won’t be able to negotiate effectively.

When you know how much money you have to play with, always negotiate to pay less than this amount.

Take notes, save all written correspondence and even tape meetings or telephone conversations that you have with debt collectors. Notify them that you will be taping the conversation. If you come to any agreement, make sure that the agreement is written down.

Never be pressured by debt collectors. If you can’t afford to pay off a debt on their time line then you can’t do it. It’s that simple. Also, If a settlement is agreed to, ask them to amend any of the information they may have put on your credit report. This should limit the impact on your credit score.

Credit cards are very useful and most of us do rely on them at some stage. With so many available we tend to only look at the balance transfer and purchase rates but there are a lot of hidden charges that you need to be aware of.Balance Transfer Fee - if you plan to start transferring balances to your new card check the fee first. If, for example, the transfer fee is 2.5% then work out how much this will cost you i.e. a transfer of $5000 might cost an additional $125.

Late Fees - credit cards must be repaid on a monthly basis even if it’s only the minimum amount. Many banks now charge a fee if this payment is late. Always check the date your payments are due, make sure you leave enough time for your payment to reach the credit card company and clear from your bank. Depending on your method of payment these times will vary, even payments made from online banking services may take several days to clear. Setting up a direct debit for the minimum card repayment amount each month is the safest way to avoid late fees and charges.

Important - many people are unaware of the clause that exists in some credit card companies term and conditions. If you miss just 1 payment on your card you may find that great 0% deal you just signed up for has been ended prematurely by the credit card company for breach of it’s terms and conditions.

There can be many reasons for missing a payment, a simply mix up at your bank, a postal strike delayed your cheque or you genuinely forgot to make the payment, whatever the reason the credit card company will still turn off your 0% deal.

Over Limit Fees - your card will be sent to you with a specific credit limit. If, through balance transfers and purchases, you go over this limit then a fee may be imposed. You can also find promotional rates turned off for breaking this term and condition.

Not Using Your Card - can you believe that some banks will actually impose a fee if you don’t use your card? So the days of holding a couple of cards with no balances ‘just in case’ you may need them could be nearing an end. Check with the credit card provider before you apply, often this is called a service fee, account fee or dormant fee.

APR Rates Explained - The APR rate (Annual Percentage Rate) of a credit card is very important because it helps you compare the repayment cost of credit cards against one another. Usually, the higher the APR on a credit card, the more you’ll have to repay on any sum of money you have borrowed (assuming that all other things are equal) e.g. a credit card with an APR of 13.9% is going to cost you more than one with an APR of 9.9% over the same period of time.

The APR does not include all the costs of a credit card, for example, late fees or over limit fees, but it tells you about the most important one. If you are looking around for a new credit card you usually want a card with the lowest APR rate possible. This is only one factor to take into account though. A credit card may have a low APR but if carries a service fee, late payment penalties or high cash withdrawal fees then this may effect how much you are being charged overall.

When you decided to create a budget, it can be frustrating to find that it is hard to create and even harder sticking to it. Sometime due to over sight, we may have made an unnecessary and expensive purchase that caused us to be disheartened and gave up the budget all together.However giving up is not the way and the answer, rather you should change and learn from it and improved further on the budget. In fact a budget is a great way to keep track of your family’s expenditures and help you to identify it there are ways to reduce expenses and increase savings.

Here are the five steps to create a no frill family budget. Hopefully they make your budgeting job easier.

1.  Gather three months of your income details and calculate your average monthly income.

2.  Next, gather your three months of your monthly bills. Do this for the fixed expenses like the rent, phone bill, car payments and other loans that are monthly. Then add them up and get the average. Do the same for other expenses like groceries and credit card bills.

3.  Review the results of your calculations. Do a detail review of your average monthly earnings against your monthly fixed expenses and other monthly expenses. And at the same time think of some ways to economize. Cut back on some items if necessary.

4.  Once you know how much income and expenses you have, you can then develop a family budget. Do your best to stick to it every month.

5.  And when you have a monthly budget, set up a savings account. This account is where you make regular deposits. Even if you can only save a few dollars from each paycheck, it is very important to start developing good saving habits.

The above are 5 basic steps that you can use in developing and implementing a no frill, easy to stick to family budget. However do take note that each family has different needs and wants. What’s important to keep in mind is that you have the freedom to set up a budget that suits your family’s situation.