Finance Tips

One popular way people deal with medical debt is through consolidation. If you are struggling, medical debt consolidation is one way to attack it but it does have its downsides. Consolidation comes through either a financial institution loan or through the use of a debt management company. Like any other debt consolidation method, there are pluses and minuses – costs and benefits which you need to understand.

Consolidation Through A Loan

One type of medical consolidation is achieved through the use of a bank loan. The loan can be secured or have collateral behind it – in which that collateral could be your house or other assets you have. A secured loan is a much better loan than an unsecured loan. An unsecured loan is a loan in which the bank has no collateral in case you fail to repay. Therefore, a secured loan (refinance, home equity, loan against your 401k etc) usually carriers a much better interest rate. In both cases, your credit score is a huge factor. The lower your credit score, the more likely you are to obtain a higher interest rate. Taking out a loan is only advisable if the interest rate you can obtain on the loan is lower than your medical debt interest rate, it prevents your credit score from being degraded, and or of it prevents you from filing for bankruptcy.

A debt consolidation loan is not beneficial if it is at a higher interest rate than your current medical debt interest rate. However, it can be beneficial in lowering your monthly payments so they are more manageable. However, realize a loan usually results in your paying more principal in the long run because your payments are lower. This type of consolidation can be difficult to obtain although usually a secured loan is much easier to obtain then a non-secured loan.

Consolidation Through Debt Relief Company

Another way to consolidate your medical debt debt is by signing up with a Credit Counseling or Debt Relief Company. These companies can negotiate with your creditors (hospital, doctor’s office, or collection agency) to potentially settle for a lower amount and set you up with reasonable payment plans or payment plan you can afford. If you are the type of person that feels better with assistance then sign up for a “Medical Debt Consultation” at the top to see if you qualify. However, you can also contact your creditors yourself and negotiate yourself (interest rates and payment plan). Make sure when you pursue assistance, that you ensure your credit score will not be negatively affected. You want to reduce your interest rate (if any) and balance but with reporting to the credit bureau as “paid in full” or “paid as agreed” instead of “settled.” In other words, talk to your credit counseling or debt management company that you want options that don’t require your credit being degraded any further.

In summary, debt consolidation, when it matches your needs, can be a viable option for medical debt. Always compare your interest rate with a bank loan, and if you are unable to obtain a loan work with a credit counselor or debt management company. Always consider the consequences and benefits no matter what you do. Moreover, ask questions in whatever consolidation method you select.

Don’t let them fool you. All those solicitations you receive in the mail for credit card applications are meant to reel you in and hook you. Big time. In addition, new bankruptcy laws in the US and higher monthly minimum payment requirements are in place to help stem defaults on loans and to force consumers to pay down debt quicker. All of this sounds great, but credit card companies want to keep you in debt as long as possible. Please read on for all the stimulating details.

If you have had problems in the past paying down debt, do not think for a moment that you will have it any easier in the future. Thanks to legislation introduced by Congress and signed by the president earlier in 2005, filing for bankruptcy to escape debt has become more difficult. Much more so. In addition, credit card companies have raised your monthly minimum payment levels, in some cases doubling the minimum amount you must pay. Consider this last step a side issue related to the new bankruptcy legislation; the credit card companies are not legally obligated to raise minimums but they were pressured into doing so in exchange for passage of the new bankruptcy law.

Do not even think for a moment that credit card companies want you to get out of debt.

For starters, credit card rates have been rising steadily for over two years. As the prime rate goes up, your credit card interest rate goes up. Unless, of course, you have a fixed rate and you have been paying your bills on time. However, one late payment and, uh oh, you are in big trouble.

If you are late making a payment, even just once, you will likely be hit with a one time late fee charge of $29 or $39. In addition, that “sweet rate” you negotiated last year may automatically disappear. Zero percent financing can quickly turn into an 18.9% interest rate in no time and enforced retroactively too. Even “lower rate” cards with annual percentage rates of 10%, 12%, or more, can suddenly reflect rates of 24.9%, 29%, 35%, or even higher!

This is all perfectly legal too!

Read your credit card disclosure agreement – as if anyone even bothers to do so – for all the boring details. Exceptions and rules are the name of the game; there is a trap laying wide open for you to step on.

The next area of socking it to you is an old one: annual fees. Yes, they are back; for years, credit card companies — in order to remain competitive — waived annual fees. Originally, it was one small way for them to extract some cash from you: you paid them something every year even if you paid off your card monthly.

If you are like me, the whole concept of charging someone to access credit is absurd. Companies make a mint off of high interest rates as it is; throwing another fee on top of things is both apparent and transparent! Now, annual fees are back. Oh, sure, credit card companies must notify you in writing of these changes before they are put in place, but they certainly hope you won’t cancel your account in response to the “new” fee or that you will forget the notice completely and simply pay the fee. Do they think that we are stupid? I believe so!

There are two other areas where credit card companies attempt to pull a fast one on consumers: your payment due date and payment mailing address.

Your payment due date, which may have been “static” for years, could suddenly have been moved up. This means that if you are used to paying off your Visa card on the 24th of the month, it may suddenly have been moved to the 16th the following month. Without notifying you of the change either!

The address where you send your money may have changed too. Is this a big deal? It certainly is if you mail your payments in. Let’s say that you live in New Jersey and your XYZ Bank card payment goes to a South Hackensack post office. If you mail your payment in five days before the due date, you probably allowed enough time for your payment to get to the bank. Warning: Watch out that their payment address hasn’t suddenly been moved to Ohio. Your next payment will likely end up being late.

Oh, so you pay online? Don’t think that the bank credits your money immediately either. I have seen it take five days for money to electronically leave my checking account and be wired to another bank’s account. The post office moves a live check faster than that!

A moved payment due date and a changed payment address are designed to make your payments late so that the credit card company can charge you a late fee and raise your rates.

This is perfectly legal as well. Is it ethical? Hey, we’re talking about the financial services industry. What else do you expect?

Financial institutions make money off of consumers through interest rates and fee services. Please do not think for a moment that any credit card company has your best interests at heart. They don’t; they are in business to please their shareholders. Get informed and take action when one of these “perfectly legal” practices is pulled on you. You can get fees canceled and have your credit card rate lowered if you complain; back it all up in writing in order to preserve your rights.

A savvy consumer is an informed consumer; learn what tricks credit card companies use and fight back. Annually order free credit reports from Experian, TransUnion, and Equifax to make sure that unfavorable reports from creditors have not been unfairly tagged to your record. Visit the Federal Trade Commission’s site at [http://www.ftc.gov/bcp/conline/pubs/credit/freereports.htm] for the best way to obtain credit reports.

Have you ever wondered just how important your credit score is to your financial decision making process? When you consider that your score will determine whether you will get that new car or house that you have had your eye on for some time it’s no wonder many people share the same thoughts. The fact is , that even small credit problems can cause you to be turned down for a loan now and a few years later. It is important for you to know what your credit score is, and if it’s not very high then you need to learn how to improve it.

There are a lot of things that can negatively affect your credit: unpaid credit card bills, and even an unpaid traffic fine can give you a negative mark at the credit bureau. A short list of other things that could hold your credit back would be: having a loan go into default, having a loan being sent to collections, filing for bankruptcy, home foreclosure, and maxing out your credit cards.

Ignoring your credit card bills, or not paying your bills at all, is probably the worst thing you can do to your credit score and this is one reason you need credit and collections management tutorials. A late payment is much better than no payment at all. Lenders are looking for people who have a history of paying their financial obligations.

If you’re getting annoying phone calls from third party collectors then this is probably not the right time for applying for credit. When a debt is in the hands of a collection agency, it means that the original lender has given up collecting payment from you and decided to hire someone to do it for them. These days home foreclosure has become a big problem.

Many lenders are sympathetic to having problems of making your mortgage payments or having your home in foreclosure; however, this does not mean that you will have an easy time getting another mortgage loan. Instead of filing for bankruptcy, or going through a home foreclosure, you might try to see a consumer credit counsellor and get these management tutorials to help you.

If your credit is poor, don’t give up. Instead go see your lender and ask them to help you make a plan to improve your credit score. Many people who have a very poor credit rating have been helped to the point of obtaining loans and mortgage much faster than they ever thought possible just by making a credit repair plan with their lender.

Some people who have been turned down have found that their score was just below the limit and were able to make very small changes to obtain a loan by getting credit and collections management tutorials.

Traditionally people who have been through bankruptcy have experienced problems in obtaining a mortgage but in recent years this has all changed and now there are more bankruptcy mortgage lenders than ever.

Bankruptcy Mortgages

The impossibility of getting a mortgage after bankruptcy would appear to be a thing of the past. There are now a plethora of bankruptcy mortgage lenders on the market.

Many people view bankruptcy as a fresh start only to find that it is just the beginning of their troubles. Getting any kind of loan or mortgage after bankruptcy can be a real headache. Even after being discharged as a bankrupt, after the usual three year period, you may still find it very difficult to obtain a mortgage. Regardless of your previous mortgage repayment record, few high street mortgage lenders will consider your mortgage application. From their point of view the risk of lending you money is simply too high. However, don’t give up hope too quickly, there are now specialists in the bankruptcy mortgage lender field who will consider lending you money. While bankruptcy may remain on your credit record for up to ten years, and may result in higher interest rates, filing for bankruptcy will not totally prevent you from receiving a mortgage.

How to Choose a Bankruptcy Mortgage Lender

Many people find that choosing a bankruptcy mortgage lender, even in the current market circumstances, is not as difficult as they first think. There are a number of traditional mortgage lenders who simply will not even consider lending to those after bankruptcy and so they are fairly easily wiped from the list. This leaves you with a limited number of mortgage lenders. The best way to ensure success with these is to work hard to improve your credit rating by paying your debts following the bankruptcy on time. By taking a few simple steps you may find you are able to obtain a good rate from a sub prime lender.

For those with a history of bankruptcy looking to get a mortgage then it is highly advisable to visit a specialist mortgage broker who has specialist experience of the market and can scan for the latest deals and offers. By choosing a good bankruptcy mortgage broker, you ensure that you will receive multiple offers from a variety of sub prime lenders, allowing you to make an ideal rate comparison.

The question is: what constitutes a good bankruptcy mortgage broker? You need to ensure that the bankruptcy mortgage broker is giving you impartial advice and is not trying to take advantage of your situation. The best way to do this is to ensure that the mortgage broker you use is FSA approved and that you go to several brokers who will offer you a variety of bankruptcy mortgage lenders for you to compare. You will need to pay particular attention to the fees charged.

The American economy seems to be recovering, albeit on very wobbly legs. The housing market, however, is still in rough shape. Many American homeowners are unable to meet their debts, either because of adjustable rate mortgages that got ahead of them or because of recent job losses. Whatever the reasons for their struggle, many homeowners are now facing foreclosure and weighing all of their options. After a bit of research, many narrow down their decision to one of two choices–short sales or filing for bankruptcy. While neither is a particularly appealing option, homeowners will likely have to consider both and then decide on the lesser of two evils.

While foreclosure is a dirty word for many Americans, bankruptcy is usually thought of in even lower regards. It conjures up destroyed credit scores and financial futures. In actuality, bankruptcy is designed as a way for someone to get something of a fresh start financially. Essentially, it relieves a debtor of many of their debts, albeit with some fairly harsh penalties. Normally bankruptcy involves the total liquidation of a debtor’s assets. Any money made through the liquidation is divided amongst those that they owe money to, according to different factors. Bankruptcy will indeed decimate your credit score and make it almost impossible to receive any type of loan for quite some time, seven years in general.

Short sales are an alternative that many Americans have begun to utilize. Essentially they involve the sale of your property for a lower amount than you actually owe the lender for it. It may be hard to convince a bank to agree to these arrangements, but under certain circumstances they will. Your credit will still be negatively impacted, but not quite as dramatically as if you slipped into foreclosure or declared bankruptcy. There are certain tax implications that may make it more difficult to go with this option, although for many people it is a much more attractive course of action.

The sad truth is that there is no easy way to escape foreclosure. Whether you elect to filed for bankruptcy or attempt to get your lender to agree to a short sale, you’ll still face repercussions, especially in your credit score. No matter what path you take, the years ahead of you will be difficult. But a bit of research will help you decide on the right course of action. Consulting a professional may be a very wise idea, as the intricacies involved in any of your options are likely to be complex.