How to Negotiate a Debt Settlement Yourself

Would you like to negotiate settlements on your debt accounts? You might believe that you have to pay a firm to negotiate a debt settlement for you. However, if you can talk, read, and write, there is nothing they can do for you that you can’t do for yourself.

Follow these important tips if you want to do the negotiating yourself and save some money. With skillful negotiation, it’s possible to get your debt reduced by as much as 75%!

Not paying your debts in full will have serious negative repercussions on your credit report. But keep in mind that continuing to be late with your payments can be just as bad.
It will be more difficult to get additional credit in the future for a while, and the account that you’re settling will be cancelled.
Be sure your negatives don’t outweigh your positives.
As long as you’re making payments, your creditors won’t work with you on a settlement. You’ll need to miss some payments first.
They must think that a settlement is the only way they can get paid.
For example: that you plan on declaring bankruptcy if you can’t reach a compromise (wherein they might not get paid at all)
Just like the used car salesman never gives you his best deal at first, your creditor will hold back initially. Have the patience to wait them out.
You should be able to settle for paying a maximum of 50% of the principal at the time you first started defaulting on your payments.
Don’t ever write a check based on a phone conversation. Be sure everything is in writing and on company letterhead.
Many people have thought they were settling their debt, only to realize that they had been mislead and were merely making a payment that was applied to the original balance.

Settling your debt is something anyone can do; you don’t have to pay thousands of dollars to a debt settlement firm. It may seem nerve wracking, but remember that the person to whom you’re speaking does it all day, every day. If it’s your only option besides bankruptcy, be aggressive and patient.

Be certain to get everything in writing. What is said on the phone means little, unless you can prove it. Follow these tips to get your best deal. You really can do it yourself!


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Bankruptcy: Your Alternatives

Should you file for bankruptcy or not? This is a decision many are wrestling with. The truth is, you probably have more options than you realize. Here are six of the best:

#1) Negotiate

Initially, you should call up the companies you owe money to and attempt to arrange an alternative payment plan. In many instances they will be willing to work with you.

#2) Hire a credit counsellor

This is more effective than the first option, unless you are a master negotiator. Sure it’s more expensive, but it’s usually much more effective. And in most instances your creditors are more willing to work with a legitimate company than an individual.

What will they do for you?

They basically help work out a more favorable repayment plan. But in most instances these firms will only deal with unsecured obligations.

What’s a “more favorable plan?”

They generally attempt to do either one of three things: get the grand total reduced, get better interest rates, or lengthen the amount of time you can pay it back by. All of these will make the payments easier to deal with.

How do the counsellors determine who they will work with?

They will want to know how much money you make. They have to know this to figure out if it’s possible for you to pay off your debts with the new terms.

So if they decide not work with you, do you have to file bankruptcy? Not necessarily. There are still more options.

#3) Get a debt consolidation loan

This is where you take out a loan for the amount of your home’s value in order to reduce your debt. Obviously you stand to lose your house if you can’t pay your debt. Therefore you need to think long and hard about this. It is worth speaking to a certified professional before making such a big decision.

For some, having a monthly loan payment is much more manageable than credit card debt. This is because the interest is applied all at the beginning, so it doesn’t keep accruing.

#4) Lower your expenses

This is the simplest and easiest method. Just take a very close look at where your money is going.

Check your credit card for the past month and notice the charges. Cancel any monthly payments from companies you aren’t using. Chances are, there are more than a few in this category. Focus on the big expenses, because those are the ones that are making the most difference.

#5) Sell nonessential items

Think about getting rid of that second car you own. Consider taking out the money in an investment portfolio and using that to pay things off. Sell your TV. All these things can make a big difference.

#6) Get a loan from a loved one

This is obviously not a good option for everyone but in some cases it may be the right thing to do. Only you can decide for yourself. Just be sure you have done your research carefully before you make your decision.


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How To Get and use a Credit Report to Improve Your Finances

Everyone has heard of a credit report. But many people don’t know exactly where to get it, or what to do with it when they have it.

What is a credit report?

It’s basically a track record of your past financial performance.

What does it track?

It looks at when you have paid your bills, the amount of credit you currently have on your cards, how much debt you owe, and so on. In other words, it is a snapshot of the past seven years or so of your financial habits with respect to credit and debt in your life.

Your past record is an indication of future performance. It can helps help any would-be creditor determine whether or not to give you a loan, mortgage, or credit card. It also determines what the interest rate will be. Even college loans are awarded based on your credit history. In other words, if you don’t have a good financial record, this could affect your entire financial future, and that of your children.

What counts as a good credit score?

Generally, a credit score of at least 700 these days is considered to be a good one that will help make it easier for you to borrow and will also offer you the chance for the best interest rates.

Who tracks it?

The three major bureaus are Experian, Equifax, and TransUnion. You can get a free copy of each report once a year. They will not all be identical, but they will be similar. You can also get one every 4 months to keep tabs on your reports and make sure there is nothing incorrect on the reports.

The most important thing is to check once you get your report is that there are no errors. If there are, you need to get the report fixed quickly so that it does not damage your credit rating.

It also helps prevent identity theft.

Since you can track all your financial history, it will be easy to see if there are charges you don’t recognize. The bottom line: make sure you look carefully on each report to verify that everything is correct. This could easily be the difference between getting that loan or not, or getting a good interest rate or a bad one. Therefore, it pays to do your best to try to establish a better credit score for yourself, for a better financia future, not caught in the credit crunch.


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How to Get Started With Credit Repair

Credit Repair- Getting Started

There are all kinds of credit repair tips out there. The reality is that if you have bad credit, there tons of simple solutions. It’s very possible to improve your credit and even completely fix it in a very short time period.

How? Here are four most of the most effective strategies:

#1) Credit counselling

This will not only give you strategies for better money management, but the company will negotiate with the creditors on your behalf as well. In many instances they can reduce the amount you owe substantially.

Since they are very experienced in the industry, they have a much better chance of negotiating better terms for you than if you were to do it yourself.

#2) Look for mistakes on your credit report

One very simple and easy method to quickly improve your credit is to just scan your report. Anyone can get a copy of their report for free at least once every 12 months, so it doesn’t cost you a dime.

What if you find errors?

Then just call up the credit bureau and let them know. They will look into it. If they verify that indeed they made a mistake, they will erase it from your report.

This will instantly improve your credit score. And since mistakes are quite common, there’s a good chance of this working.

And don’t give up.

Even if they don’t remove something the first time, keep after them. It might take two to three months, but eventually you can get that erroneous late payment taken off.

#3) Pay on time

This is one of the simplest methods to raise your credit. It’s so obvious it might not seem worth mentioning, but it’s one of the most important tips of all.

What if you can’t pay on time?

If this isn’t possible because you have too much debt, attempt to get a consolidation loan. This might reduce the amount you owe, and it also makes it easier for you to pay them.

#4) Build up your investments

Instead of spending on things you don’t need, start putting a certain percentage of your money away every month for investing. This is easily one of the best methods to repair your credit.

But be wary of scams.

Remember, there are many firms that go after people with bad credit. They claim they are going to help them you raise your score. But often times they just take your money and disappear.

How do you spot those companies?

Basically, if they charge you a huge upfront fee, you know they are dishonest. Also, if they say to dispute everything on your credit report even if it’s right, it’s certain they are not legit.

By implementing these tips, one at a time, you can improve your overall credit rating and start reaping the benefits of having a high credit score.


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Investing: What You Need to Know about Hedge Funds

While nearly everyone has a good understanding of mutual funds, if you work outside the world of finance, hedge funds are likely a little more mysterious to you. You may have wondered what all the fuss is about and whether or not hedge funds might make sense for you.

They’re not for everyone; continue reading to find out more about this interesting investment vehicle.


Hedge funds are privately managed investment funds that utilize sophisticated and frequently risky strategies to provide high returns to wealthy investors.

Estimates vary, but there are around 7,000 hedge funds at this time. These funds exhibit a tremendous amount of variety between funds, just as there is between different mutual funds.

Hedge funds are very loosely regulated and are only open to investors that meet stringent requirements. Hedge funds are quite popular and are estimated to have nearly two trillion dollars of capital invested.

At the most basic level, they’re quite similar to mutual funds, but the differences are very significant.


While mutual funds must register with the Securities and Exchange Commission, hedge funds are exempt from this requirement due to a clause in the Securities Act of 1993. There is frequently talk of requiring hedge funds to register with the SEC, but it has not yet come to pass.

Even though they don’t register with the SEC, hedge funds are still subject to certain regulations. For example, they’re not permitted to advertise to the public or ask potential investors to join.

Instead, the manager of the hedge fund must already have a relationship with the potential investor or they must be introduced by a qualified party; this is usually a broker associated with the hedge fund.

Hedge funds will only accept “accredited investors”; these are private investors with net assets totaling over $1 million or $200,000 in annual income, with separate requirements for institutional investors, partnerships, and others.


Mutual funds are limited in the types of investments in which they can invest. Some of these requirements are somewhat self-imposed; they can only invest within the parameters laid out in the prospectus they provide.

Hedge funds, on the other hand, can invest in nearly anything they think might make a profit.

For example, if a hedge fund manager believed that silver was going to be a good investment, he could invest in silver coins, silver mines, silver bars, or nearly anything else a creative mind can think up.

Hedge funds can also utilize derivatives, which are discussed further below, while mutual funds are prohibited from investing in derivatives.


Mutual funds are required to maintain a minimal level of diversification, which provides protection against significant losses. It also limits significant gains.

Hedge funds aren’t required to spread out their investments. Technically, a hedge fund could invest all its money in a single investment if it so desires.

This lack of required diversification provides a hedge fund with a great deal of opportunity to do extremely well or to do very poorly.


Hedge funds are permitted to employ a very high degree of leverage. Since they can invest in derivatives, many hedge funds take full advantage of that allowance and use it to drive higher profits.

This is how using leverage works with derivatives:

‣ Derivatives are essentially contracts between two parties that specify particular conditions that must be met by a certain date before the contract can be executed.

‣ Perhaps the easiest type of derivative to understand is the option to purchase stock, or a “call option.” This gives the holder of the call option the option (but not the obligation) to purchase a stock at a given price before some specific date in the future.

‣ If the stock rises above the agreed upon price (the strike price), the holder of the option can purchase the stock at that price. So they’re guaranteed to be able to buy the stock at a lower price than what the stock is selling for at that later time – which is a great deal as long as the price of the stock does go up.

‣ A single option gives the holder the right to purchase 100 shares of the stock. However, most options expire without the price of the stock rising high enough for the option to be exercised. The money paid for the option is then lost.

‣ However, the cost of the option itself is relatively low compared to the amount of stock that can be controlled. Options provide tremendous leverage and can provide spectacular returns, when they work out. Note that there are a very large number of different types of options.


Mutual funds provide publicly, by law, their net asset value (NAV) on a daily basis. Hedge funds typically only provide valuations on a monthly or quarterly basis.

With a mutual fund, you always know where you stand as an investor, but an investor in a hedge fund can only find out how they’re doing on a monthly basis, at best.


Another difference is the fee structure. For most mutual funds, the only fee is a management fee, which is usually quite low (0.5 – 1%). This fee is paid regardless of the fund’s performance.

Hedge funds also charge a management fee (around 1-2%). In addition, they charge a performance fee as well, which is commonly 20% of the profits, but can be as high as 50%!

Many experts, including Warren Buffet, believe that performance fees are a bad thing. This is because the hedge fund manager gets such a significant portion of the profits, yet doesn’t share in the losses.

Considering the management fee is still a very significant amount of money, the hedge fund manager is potentially very well rewarded for taking huge risks, yet can still make over $1 million a year even if the fund loses money.

All in all, though, the manager has an incredibly high incentive to make the hedge fund hugely profitable because he gets a good share of those profits.

With such a large portion of the profits going to the manager, why would wealthy investors enjoy hedge funds? The answer is easy. They may share their profits with the manager, but they also stand to gain a huge profit themselves.


Hedge funds appeal to qualified investors due to the potential for much higher gains. These gains are achieved through a lack of constraints on the fund. These include the freedom to utilize
leverage, take advantage of nearly any investment, and not be constrained in any way by diversification rules.

The fees can be very steep for hedge funds, with the performance fee putting a lot of the profits in the pocket of the hedge fund manager.

These potentially high rates of returns do not come without disadvantages. Hedge funds can lose an astronomical amount of money quickly if the market moves in the wrong direction and the fund is heavily leveraged.

Are hedge funds for you?

If you don’t meet the requirements to be classified as an accredited investor, you still have some work to do before the question is an issue for you. For those with the necessary financial position, it really becomes an issue of risk and potential reward; both are very high.

There are thousands of hedge funds, and just like mutual funds, some are great and some are less than great. As always, perform diligent research before you invest your money in anything new.

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Bankruptcy Basics-What You Need to Know

Bankruptcy – Things You Need to Know

Are you considering filing for bankruptcy? Before you do, here are some very important things you must know.

Don’t make the decision rashly.

Make sure you take time to educate yourself about the proceedings. Bankruptcy will impact your credit for ten years down the road, so it’s by no means the “clean beginning” many view it as. And in some instances you still have to pay off your obligations.

Before you decide, you need to figure out what possessions you will be allowed to retain, which ones will be liquidated, etc. In some instances you might even lose your job. You need to factor all this in.

What chapter will you file for?

This is the first thing to think about, and it makes a big difference. Should you be earning higher than the average income of a comparable family in your state, you won’t be allowed to go for chapter seven.

This is where your debts are completely wiped out, and is obviously the one most people would prefer. Your only choice would be to go for chapter thirteen, which is a repayment plan. This is mostly because you have the income to make it work.

In this case you are given a trustee who determines which of your things must be liquidated in order to cover your obligations. In most instances you can retain your residence, but some areas will take this as well.

But you might not have to file.

First you need to think over your money situation long and hard. In many instances there are options. Think about whether you have sufficient cash flow.
If you are only able to make the lowest payment possible, and are constantly using your credit card because you don’t have money available, bankruptcy may be something to consider since sooner or later you are going to run out of credit line.

If things are still relatively manageable, here are three effective alternatives to bankruptcy:

#1) Track your spending

Take a long and hard look at your spending habits. This shows you the primary places where your money is disappearing. This will help you figure out where you need to get it under control.

#2) Get credit counselling.

This sometimes helps you lower your obligations. But these companies will only work with you if you have a certain level of income.

#3) Get a debt consolidation loan

In many instances getting a secured loan against your home is smart, because this will give you the cash flow you need to pay down your credit cards. The risk, of course, is that your home will be repossessed if you can’t make your payments. But if you’re sure you can make the repayments and are committed to it, this may be a smart option to consider.

The bottom line is that bankruptcy should be your last resort if you have no other options. Therefore, leave no stone unturned in your effort to avoid filing for bankruptcy, in order to take control of your financial future.


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How to Rebuild Your Credit Quickly

If you are not happy with your credit score, do not just sit there feeling powerless about your financial situation. There are several key steps that you can take to begin restoring your credit.

Many people think they they are stuck with a bad credit score for life, but a few strategic moves on your part could soon have you raising your credit score systematically in order to get that loan you want, the home of your dreams, and more.

1-Pay down debt.

Plan to pay down any debt you have now.

2-Pay on time.
Be sure you always pay on time to avoid penalties, fees and further damage to your credit report.

3-Pay as soon as the bill comes.
Don’t leave it sitting around til the last minute. The sooner you pay, the less interest accruing on the balance.

4-Make an extra payment.
Even $10 extra can help you start to pay down your debt strategically and boost your credit score.

5-Obtain new credit

This is simple but very powerful. In many instances, people who don’t have good credit also do not have a credit card because they lost their privileges of owning one. Some never reapply for one because want to use cash to avoid going back into debt. But the reality is that if you ever want to apply for a loan or necessary credit, it’s important to start rebuilding your credit strategically. Just be sure not to apply too often, as the inquiry on your credit report could actually cause it to go lower.

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