What Is Debt Resolution?
We are here to help you understand debt resolution.
Debt resolution is a process designed to help qualified individuals in a financial hardship pay off their debts in less time than by making the required minimum monthly payments to creditors.
Understanding Debt Resolution
The credit boom that started in the mid to late 1980s had an indelible impact on national economies of the United States, the United Kingdom and many others in the northern hemisphere. The trend of household “buying what you could not afford” became so pandemic and almost institutionalized in our way of living that credit came to be seen as an automatic entitlement.
Credit became not just a convenient way of providing a house, to last you and your family a long time whilst increasing in value and offering you long term security, or a car, to ensure your control over personal and work related travel, but a means to do and have so much more. Credit, over the years, has been facilitated and extended to enable our access of funds, which we do not have ourselves, for investing in or buying almost anything.
Credit has been given for much more than house or car purchase; it has enabled investment in business, development of ideas, been called upon to buy new household items when old ones have died and many more life enhancing human needs. Many people want to purchase a house for themselves to live in and equally many who want to buy for renting to others. Business innovators and young opportunity seekers want investment to get ahead in life. Some of us just want things to run smoothly and need a helping hand when things go wrong as there is not sufficient cash at the right time to tide us over sudden financial shocks in our lives.
Banks are the first option for finding a loan. Many banks are only too pleased to help their regular customers and as long as they are reasonably sure repayment will take place they will sign a loan agreement with you.
It is important to know that as soon as you take a loan for whatever reason, then you are in debt! There are also plenty of other financial institutions, individuals, and companies that will provide a loan for you, and whichever you turn to for your loan, your debt starts from the day you sign your agreement to the terms of your loan.
It is very important for people to understand that there are two kinds of debts. It is convenient and common to make a distinction between healthy debt and unhealthy debt and it is moreover important to know what that distinction is.
Healthy debts are those debts accrued for the important basic needs in life, such as housing, and other assets - a car, a business loan, an extension on the house, that increase in value over time and for which – for most of us - complete purchase at the outset is just not a possibility. These assets are subject to declaration for tax purposes and are part of everyone’s daily living in today’s world.
These debts will be paid back over longer periods of time, are negotiated around your earning capacity and maybe extended when more funds are required, or reduced more quickly when small unexpected windfalls come your way: promotion at work, lottery win or unexpected legacy.
Unhealthy debt are the debts that we accrue following purchase of items which reduce in value over time. These could be lap tops, cell phones, and any number of gadgets: PlayStations, X-boxes, televisions, selfie sticks, in fact any “thing” that we want that we can’t immediately afford will be made available through a loan gained from somewhere. Our lifestyle is propped up by loans: subscriptions to gyms, book clubs, wine consortiums, a package holiday or two a year, long weekends away, Christmas presents, anniversary dinners, and so on. Today, many people, both adults and young people are in habit of getting into this kind of debt only too easily.
Unhealthy debt is also accrued when people start believing they can pay fuel bills, other debt burdens, and other ongoing daily living costs such as food, and clothing, by taking out more loans and becoming ever more entrenched in debt.
Unhealthy debt does not help any individual’s domestic economic status nor does it help our communities. Families are torn apart by debt, marriages fail, homelessness may result, drug and drink problems can escalate, and crime can start from indebtedness. Unhealthy debt has destroyed the lives of many Americans and that is why Financial Rescue offers financial advice and services to help those with debts they are finding difficulty in managing so that these intense and profound problems do not manifest themselves and cause harm and damage to more people.
Financial Rescue advises that there are a number of different ways to manage debt. Some are basic and some are advanced, and we hope that this information will assist anyone worried about debt to manage their situation more effectively.
Categorizing of your debt is quite important. It is essential to have an overview of your domestic lifestyle and the debt that you are in. Your ability to see your whole picture in its entirety is of crucial importance and your capacity to do this will help you start the process of managing your debt instead of letting it control you.
For instance, categorization will enable you to have in your mind an overall picture of all your current debt. You should force yourself to categorize all your debt into that which is healthy and that which is unhealthy. When you are able to do this you will see which debt is benefiting you and which is not. Healthy debt can be examined and if you need to negotiate better terms of mortgage, then do so. Financial Rescue may be able to advise on this, please do contact us.
The unhealthy debts should be listed under short term, intermediate and long term category headings. The interest rate for each item in every category should be noted. There is less likelihood of renegotiation per item in your unhealthy debt list as these are not house or car buying purchases or long term business investment.
Consider Prevention of Debt
Always consider a behavior change! Our own impulses often turn out to be hasty. What we think is an immediate need often turns out to be an unnecessary desire. Keeping up with the neighbors by buying furniture when what you have is fine, buying to have the best suit or dress in the office, choosing a too expensive cruise holiday instead of a quiet break, can all add up to massive debt that will not help your financial situation or your health.
Take the time to think over your decision to whether to buy a product or not, and resolve to make a wise decision. You may eventually come to the decision that 70% of the things which you previously thought you really needed were in fact nothing more than impulsive buys that you never needed.
Do not be lured into the bargain buying syndrome! There are many people who are easily persuaded to buy by “discount” and “special deal” tags. Since you would not have bought these goods a full price, then it indicates they are not needed at discount price either.
Take a deep breath and avert your eyes when stores announce their sales, or at least make sure you only enter a sale when it is to buy something that you really need and have the option, now, of getting it cheaper. If you are in debt, then the last thing you want it extra unnecessary costs piling onto already existing and rising debt. This will just make life harder.
Many of the clients we meet with, come to realize that they have spent on items that they have found pleasing to the eye rather than on items that have any practical use, or have bought something that will somehow make their lives better. The cost effectiveness of this is an illusion. They golden rule for people managing debt is to only buy the things that a really necessities.
In Need of Help?
If your debt is managing you then please consider talking to us. Financial Rescue will consider many options with you. Credit counselling may be the answer, or debt consolidation. You may even consider debt settlement or resolution, something in which Financial Rescue has many of years of experience. Talk to us today and we can help you start managing the debt.
The Answer To Your Debt Settlement Concerns
Financial Rescue has the answer to your debt settlement concerns.
Most of our clients pay off their balances within 36 months with one low monthly program payment.
To ask additional questions and to find out if you qualify, contact us today.