DEBT SUCKS, PART 1
A series provided by the Consumer Defense Corporation
Debt sucks. OK, that’s rude. But it’s also true. Many of us have bill collectors calling us at all hours, calling our homes, our relatives, even calling us at work. It’s a downward spiral. We work as hard as we can and we can’t seem to catch a break. We need to make more money than we are, but instead we go to the mailbox and find demand notices from our creditors.
Well, maybe there is finally a chance for you to get ahead of the game. We’ve all seen those, “He made $13,483 in the first month!” Most of those – maybe all of them – are scams. What if you found some real help? A company that really offers a solution.
Can you take a moment to look at your finances? Let’s put some numbers down and look at them in reality. And it takes actually sitting down with a pen and paper.
First, I want to tell you who we aren’t. We aren’t a law firm; we’re not some internet guru trying to sell you some package that promises to make you a millionaire if you follow our step-by-step never make a dime instructions; we’re not a debt settlement company or some debt elimination scheme that is highly suspect that will push you into wage garnishment; we’re not some phony “Christian” or “Non-Profit” company that is neither Christian nor non-profit. What I want to tell you about is a financial solutions company that offers an honest service.
With a program from Consumer Defense Corporation you may be able to get back on your feet to start over again with a clean slate. It doesn’t matter if you’ve got thousands of dollars in credit card debt or medical bills; it doesn’t matter if you’ve had your car repossessed or if you haven’t worked for six months. We have solutions to consider.
First, let’s find out if you need us. How many creditors do you have? Between your house, car, credit cards… all of them. Some can go away, some can’t. If you have a home mortgage, it has to be paid or the lender will foreclose. A car payment not made results in repossession. But the credit cards? Those are where you can save a bundle. Consider other unsecured creditors as well – promissory notes, hospital bills, doctor bills, anything you don’t have property or possessions pledged against. For example, if you bought furniture from someplace like Rooms R Us, if you don’t make your payments they will come and pick it all up. Make sure you’re just looking at unsecured consumer debt.
Now, what is the total amount you still owe? Write it all down or you will either over estimate or underestimate… and underestimate. Next, we need a weighted average interest rate. From eHow, we get the following explanation:
• Find the total per loan weight factor by multiplying the balance of each loan by its interest rate and adding these results together for all the loans to be averaged. Divide the total per loan weight factor by the sum of all the loan balances and multiply the result by 100 to find the weighted average interest rate.
Let’s make that a bit easier to understand. First, go through your credit cards one at a time. Let’s say you have one credit card with a balance of $10,000 at 15 percent interest and another with a balance of $15,000 at 21 percent interest.
Multiply 10,000 times .15 to get 1500
Multiple 15,000 times .21 to get 3150.
Add these together to get 4650.
Add together the initial balances of the loans: $10,000 + $15,000 to get 25,000.
Divide 4650 by 25,000, which equals .186
Multiply .186 by 100 to find the weighted average interest rate of 18.6 percent.
Now you know your weighted average interest rate.
Next, add up the dollars you have to pay on each – the Minimum Monthly Payment. In our example, that would be $1000 a month (4% X the amount owed).
Now we face reality. There’s a website called http://tcalc.timevalue.com Once you are there, click on “Credit Card Payoff” in the second column. Enter your Current balance, the MMP, and the interest rate we calculated. For our example that would be $25,000 for the Current balance, $1000 for the Monthly payment, and 18.6% for Interest rate. Click COMPUTE.
Our example results show that it would take 32 months to pay off the debt and you’d pay $6,878 in interest. WOW! You paid $31,878 to pay of a balance of $25,000. Is there a better option?
Consumer Defense Corporation offers a program called the Walk Away Club. The same amount of debt can be paid off in half the time and for about half the original balance due.
If that sounds good to you, take a moment to visit other pages too.
Check back with us next week for Debt Sucks, part 2, and we’ll show you some How To stop bill collectors from calling you.