Foreclosure and Debt

Foreclosure and Debt. Swear words your mother would make you bite a bar of soap for saying in the current economic state our country is in. They are not easy situations to find yourself in, to tell anyone about, or to get out of. Suze Orman was on ABC's "The View" this morning discussing financial issues, and while a lot of people don't like her she does make some sense.

Credit card debt is a major problem for so many people, it plays a major role in leading people to foreclosure. So many families in foreclosure that we have helped have had a lot of bad debt, credit cards, medical bills, second mortgages, and the list goes on and on.

Suze Orman's solution to this is to get a credit card with a Credit Union
instead of a "bank". Credit Union's can only charge a maximum of 19%apr
vs. the regular banks which I have seen as high as 30% apr.

How many people have you told that you are in debt? What an embarrassing thing to admit to others, be they your friends or co-workers, family or neighbors! Debt is something that people hide from so many people they have a hard time admitting it to themselves. When was the last time you added up all your bills vs. your income?

Suze Orman suggests letting the secret out of the bag and letting people
know about your debt. It's not a dirty secret, and odds are once you open
up about your problems others will too.

Suggestions on a plan of action:

1. Write all your debt down on paper, a copy of your credit report can help with this.
2. Write a list of all your expenses, don't leave anything out.
3. If your expenses exceed your income make reasonable cuts to your budget.
4. Call your credit card companies and ask them to lower your annual percentage rate.
5. Medical Bills? Call the hospital or collection agency and ask for an itemized bill. If you have some extra money offer them a settlement....but have them send you confirmation in writing before sending the money. You can also do this with bad debt on your credit report, often times the companies would rather get something than nothing.
   
6. Find ways to make extra money, have a yard sale and use the money to make extra payments to pay down your debt.
7. Stick to your plan.

While these are just some quick ideas, once you start the ball rolling to paying off your debt and make a plan for yourself to follow it will be easier to stick to the plan. If you have children you can include them in the conversation on how to keep expenses down, children often think of things adults never think of, their minds work differently and are often less stressed than adult minds. Plus, it helps them to be involved to see that even their own parents have problems and to learn problem solving skills to work on the problem.

Suze Orman suggests www.creditcardconnection.org to find a
local credit union to help with lowering your debt. You can also visit
Suze's website www.suzeorman.com and see her helpful ideas.

Debt doesn't accumulate overnight, and neither will you get rid of it overnight. But it is possible to get yourself out of the whole, as long as you can stop yourself from digging. You are not alone, remind yourself that most of the country is in the same position as you, with some careful planning it is possible to get yourself out.

Be careful of using credit agencies to help yourself get out of debt. We have heard of many companies that take people's money month after month only to never pay any of the bills. This happens with mortgage help services too. DO NOT pay anyone to reduce your mortgage without first asking your mortgage company about the Making Home Affordable Program which helps homeowners in trouble stay in their home.

If you want to buy a house and you have an income that has been consistent for the last 6 months to a year, now is a great time to buy a home. It's an even greater time to buy a rental property. There are more people wanting to rent than there are houses for rent in the Lake County and McHenry County area.