Credit Card Catastrophe Aviodance Plr Ebook

Table of Contents

Forward

Chapter 1:
Stop Blaming

Chapter 2:
Know Where Your Money Needs To Go

Chapter 3:
Forget The Home Equity Line

Chapter 4:
Sell Unrestricted Investments

Chapter 5:
Snowball Technique

Chapter 6:
Snowflake Technique

Chapter 7:
Cut Them Up

Chapter 8:
Other Income

Chapter 9:
Bankruptcy

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Synopsis

The debt has to be first.

Priorities

Several individuals that I know are in significant charge card debt and sometimes ask my thoughts on how to get out of the state of affairs. While I’m happy to spend time assisting them, it almost always turns out to be a senseless exercise as in 90% of the cases, the individual isn’t truly serious about getting out of charge card debt. Sure, they’re miserable about the payments and the thing they wish for more than anything else is that their charge card statements showed a $0 balance. Wishing for something and doing something to proactively have it are two totally different matters.

Someone I know (I’ll call Tom) makes approximately $85,000 annually and has $20,000 in charge card debt. This debt is sweeping over like the plague and he spends at any rate a couple of hours daily nervous over the $500+ per month in interest payments it takes just to sustain his current balance. Yet, at any rate once a month, he discovers $100 to go on a weekend trip. When I ask him about it, he states that there are particular things that he won’t abandon regardless how bad the debt is.

Tom may never get out of charge card debt with a mental attitude like that. The extra $1,200 annually that he’s spending on the weekend getaways would pay down $6,000 of principal over 5 years, or nearly 40% of the balance. If he could make an extra $50 per week either by working a lot of hours or cutting costs (yes, this virtually means you get on a bicycle rather than driving), he may pay off an extra $11,000 in principal over those same 5 years. That’s all it would take to wipe out the balance.

Rather, he thinks in terms of “my vacation money” or “my food market money”. No, you have one, jumbo pile of money that’s available to you. If you’re in charge card debt, paying monumental interest on your balances, take every extra penny you are able to and pay down the debt.

Set a sum monthly for food, water and shelter as these are your primary needs. You need to think about buying assorted healthy foods and attempt to avoid unnecessary snacks. You likewise need to do your best at work as it’s your source of income to pay for your bills. This is where you start setting your priorities true and right.

Some individuals have their priorities so messed up they even ignore their health just to buy expensive gadgets or travel. Observe that taking care of your own every day needs is your responsibility and priority so avert putting off the important things particularly if you have a family.

Pay your charge card debt. Paying-off the charge card with the highest rate of interest then followed by the ones with lower rates of interest is the most beneficial thing that you can do in order to wipe out your entire charge card debt. Buy things with cash as much as conceivable and control your spending.

Center on saving enough cash for your emergency fund too. This is really significant in case of a job loss or other major unforeseen matters that might happen to you. Ward off the enticement of purchasing things that you are able to just live without and center on building your emergency savings.

Adjusting your financial priorities should be your chief concern. Have a clear list of the crucial things that will cover your monthly disbursements and finances and number each item from the highest to the lowest with relation to their importance and need.

Synopsis

A lot of financial planners will tell you to use a HELOC, or home equity line of credit, to pay down high interest charge card debt. Don’t do it.

Stay Away

I’m not a huge fan of this attack for one easy reason – if you do decide to utilize the nuclear option and declare bankruptcy, your charge card balances are un-guaranteed, while a home equity line of credit is guaranteed by your house.

Practically, this means that you’ve taken a debt supported only by your credit, where the worst a charge card company can do is go to court and get a judgment against you, into a debt supported by your house, where the worst is far more awful – the bank may foreclose on your house and kick you out.

No matter, this is entirely your call as it’s going to come down to what will let you rest at night. If your charge card debt is manageable, and you just prefer to save a couple of thousand dollars in interest expense, a home equity line of credit may add up. If you think there’s even the remote possibility that you might be forced to declare bankruptcy, it may be a tragic mistake that costs you your home.

There are a lot of credit lenders out there today wanting you to put up the equity in your home to get their money for almost any reason you might determine. Among the ways you are able to claim the equity in your house from lenders are by refinancing, securing a second mortgage, a home equity loan, and a home equity line of credit. Are utilizing these ways to borrow money to ease debt a good idea? Here are some good reasons why you shouldn’t use equity in your home to pay off debts:

If you get in a financial tie up, and you feel like you have to default on your new secured debts, the fresh debtors may start foreclosure proceedings to get paid as the house is a secured interest. Creditors who make un-guaranteed loans like charge cards can’t foreclose on your home as their loans are not guaranteed by home equity.

Even in a few areas of a down market, your home might be appreciating in value. That means your equity is increasing with time. When you borrow against your equity to pay for debts, you’ll lose the appreciation the house has amassed if your home is foreclosed on. You will not only owe the guaranteed loan amount, but many times the sale of foreclosed property sells for cents on the dollar. Consequently, the equity you were forecasting to pay off the fresh secured loans won’t be there to pay them off.

Getting into debt appears to be a symptom of a much deeper issue. Using your equity to pay off debts is no guarantee that new debts won’t happen. If new debts occur and you’ve liquidated the only asset you have to the point it already belongs to somebody else, you’ve increased your debt load to the place you might not be able to afford.

So, what should you do to avoid the temptation of borrowing against the equity in your house? You are able to learn to live within your means, stay out of debt as much as conceivable, pay as you go, look for employment that’s resistant to economic shifts, stand back from high interest loans like charge cards if you have to borrow money, and ultimately, keep yourself educated as to the legalities and financial responsibilities that go along with home ownership.