The job market of today is very much different than that of our parents generation. Good jobs are fewer and farther between, and an education is required for pretty much any job that one can feasibly make a living from. The need for a college education has continued to increase, but at the same time, federal and state aid to help students get said education have continually been cut. This means that students have become dependent on student loans to finance their educations. And this is coinciding with a massive increase in the cost of obtaining an education. What this means is, that when students graduate from college, they are already mired in an excessive amount of debt that their entry level jobs do not always give them the ability to repay, if lucky enough to even find a job at all.

There are two types of loans, subsidized and unsubsidized. Many have had to begin to rely on both in order to fully finance their education. Subsidized loans are ones where the government pays the interest on your student loan while you are in college, that way you simply owe the principle upon graduation, and interest will begin to accrue after that. With an unsubsidized loan, interest accrues the entire time you are in college, leading to a much higher debt load for students who must use these loans to make ends meet.

The education and student loan dilemma

With college being almost a requirement of obtaining a good job, more and more people are going to college. This increases the pool of qualified candidates and makes the competition for the few good jobs out there pretty stiff. The debts that many incur while in college are quite massive, and the salaries of most entry level jobs, even for those with a college education, do not provide enough to finance one’s own living expenses, as well as manage the huge monthly payment on one’s student loans.

Student loan payments tend to begin six months after graduation, putting the recent graduate under a lot of pressure to find something, anything, before that first bill comes in. Many students are shocked when they see the extent of their debts. Unsubsidized loans often really shock a student, as the amount of interest incurred on these loans during the time they were in school can be a bit shocking.

Not paying these debts can cost big time

It is easy to see how many graduates are simply unable to pay their student loan debts, and this can make them vulnerable to a lifetime of financial problems. Student loan debt is yours for life, not even bankruptcy can eliminate these debts. Those who cannot make the monthly payments are faced with a limited number of options from which to manage these debts.

Consolidating your loans seems like a good idea, as all your loans are lumped together and you are given a longer amount of time to pay your student loans. The problem with this is that you incur a lot more interest over the course of repaying this debt, and you can end up paying almost double the original loan amount in the long-run. Deferments are another option, and while you are given a grace period from payments, interest continues to accrue while you are in deferment.

Defaulting on your loans is failure to make a payment over 270 days. When you default on your loan, not only does this negatively impact your credit score in a negative way – meaning that you will have more trouble and should expect higher interest rates on any loans you many qualify for – but you are no longer under a payment schedule with the student loan issuer. This means that they can come after you for the full cost of the loan, even garnishing your wages and seizing your tax returns to recoup their costs.

While student loans seem like an evil of society, for many, they are a necessary evil that they need to make a better life for themselves and their family. Student loan debt, when carefully monitored, can be managed, and it is vital to your overall financial health that you make sure that you fully understand the terms of your student loan agreement. Knowing the terms of your loan, having an understanding of what your payments are going to be, and being prepared for repayment will put you on track for success.

Over the years, there have been many financial scams, more often than not, preying on vulnerable people who are trying to get out of debt. Debt settlement orders are just the latest in these types of scams, but they have the potential for costing those already swimming in debt even more money and wasted hope and effort. The simple fact of the matter is, there is no such thing as a “debt settlement order”, it is just a clever scam to obtain your personal information and make a quick buck off those who are trying to get their financial lives back in order.

How does this scam work?

The offer for debt relief via this so-called debt settlement order is sent through an unsolicited text message, most often targeted at those who are mired in a great deal of debt. These text messages claim that there is a new program that can help eliminate or erase excessive debts. You are prompted to reply to receive more information, as well as to stop receiving further text messages. Once you reply, it is then known that your number is, in fact, a live and active one. Many have reported being inundated with excessive numbers of offers from a number of highly suspect debt relief agencies, even when they simply responded with the prompt “STOP”, that is supposed to indicate that one is not interested in said debt settlement offer.

Debt settlement offers are not recognized by any governmental or financial agency and there is no oversight for this so-called debt relief system. In fact, it is actually a pretty simple scam. A mass number of text messages are sent out to many different phone numbers, some of which are actual, active phone numbers, some of which are not. When you respond, either asking for more information, or asking to stop receiving texts, your information is stored. This personal information is then sold to other financial services companies.

These companies often offer financial advice, and pie-in-the-sky promises that they fail to come through on. Many who have fallen prey to this scandal have found themselves in even more debt by falling prey to the further solicitations they receive. These companies often want an upfront fee for their services, and then when nothing happens, you are just out that much more money.

How can you protect yourself from this scam?

The best advice for how to avoid the frustrations of this scam to begin with are simply to not respond to any text message that claims that there is a new program that will eliminate your debt. If it sounds too good to be true, it more than likely is. If you do not respond, there is no way for the scammer to know if your phone number is active and valid or not, and will thus result in the cessation of calls. Report any unsolicited text messages to the Better Business Bureau.

Be wary of any debt relief company that requires upfront payments for their services. Reputable companies will only charge you a fee if they obtain a successful settlement of your debt. It is recommended that you research any debt relief company before doing business with them to ensure their legitimacy and to protect yourself from being scammed.

With the current economic strain, many have turned to using their credit cards to cover their basic needs. This has led to a massive increase in the number of individuals who are saddled with large sums of credit card debt. The economic stimulus plan provided by the government has led to a lot of confusion, and has led many to believe that there are actual government programs that will help them pay off or eliminate their credit debts. Unsolicited emails and countless websites claim that you can get government help to reduce or eliminate your credit card debt – thanks to the government – if you have more than $10,000 in unsecured debts.

Too good to be true

The rub here is that this is not true. There are no government monies that have been earmarked for the express purpose of helping citizens pay off their debts. These ideas prey on the vulnerable, those who are stuck in debt with no end in sight, and leads them to having false hopes about their credit future. Sometimes, people find themselves even more in debt, as they pay upfront costs to agencies who claim they will help the people obtain government monies to reduce their debts.

The paradox of the minimum monthly payment

For those who can only make the minimum monthly payments on their credit card debts, getting out of that massive hole can seem impossible, and in some ways, while not impossible, it is something that one will be paying off for most of their life. And $10,000, as our example, is not an unheard of level of debt, there are many who are saddled with much more than this. Depending on your interest rate, if you were to simply pay the minimum monthly balance on your $10,000 debt, it would take somewhere between 20 and 30 years to pay off. That is like a mortgage! It is easy to see, that when faced with this debt, that many are so overwhelmed that they will even believe something that seems too good to be true.

There are government programs that aim to help those mired in debt

While many misunderstand the programs that are laid forth by the government, thinking that there are programs where the government will pay off your debt for you. Sadly, there is not. However, there are some programs that are there to assist you. Recent legislation has been passed that helps to aid in the transparency of, and reduce the predatory practices of credit card companies. There have been caps put on interest rates and fees, which would balloon a debt to massive proportions, very quickly.

There are governmental and private agencies that offer credit debt counseling services. Many of these agencies have the ability to act as a liaison between you and the credit card company, often negotiating a settlement deal or payment plan that gives you the ability to pay off your debts, while not continuing to incur more. Not only can these credit counselors assist you in negotiating with your credit companies, they can also help you create a manageable and workable financial plan that can help you get out of debt faster than you thought possible.

Watch out for scams

Unfortunately, there are many out there who will prey on vulnerable people who are saddled with debt and have no way out. These companies are generally looking for one of two things – your personal information, so they can see it to other agencies, or to get upfront fees for providing you a “service” that does nothing to reduce or help you get out of debt. A rule of thumb is, no matter what your situation, or how dire it may seem, if it sounds too good to be true, it probably is. Do not give any personal information to a company without first checking them out. Be wary of anyone who asks for upfront payment for debt relief services, reputable agencies do not do this.

Final Word

It is sad that, even in this day and age, preying on the vulnerable is still far too common. While the government does have programs and mechanisms in place to help, they do not offer monies that will pay off your credit card debts. Those who say otherwise are either scammers or misinformed. You can reduce your debts and find a workable way to manage your finances, but it does not come from a pie-in-the-sky idea of “free money” to pay off your debts. It requires you to work with your creditors and allow them to work with you; to create a financial plan that will allow you to work yourself out of your debt burden and get on the road to financial freedom.

Opening a small business is quite an enterprise, no matter how good the product or service you provide is. A good idea is not the most common barrier to getting a successful business up and running, the truth of the matter is far more simple. The demise of most businesses is a result of a negative disparity between outgoing costs and incoming revenue. Especially when trying to get a business off the ground, managing expenses while seeing little profit can help stop many ventures before they really even get started.

Businesses also often find themselves in financial trouble when sales suddenly drop and shift the company’s ledger from the black to the red. In our struggling economy, this is the fate of far more businesses than one would like to think about. This does not mean that a struggling business is doomed to failure, one just needs a good, comprehensive understanding of the full picture of their financial situation and a reasonable, manageable plan from which to get out of the proverbial hole of debt.

Assessing Your Debt Load

A thorough evaluation of all costs of doing business, both direct and indirect, need to be accounted for. From payroll, inventory, monthly bills, and even taxes, all monies that must leave the company each month to keep it afloat need to be tabulated in detail. These costs are often multifaceted and far reaching. One must also do the same of all revenue streams so as to be able to make a comparative analysis of the information they gather.

Once you have thoroughly inventoried all your expenses and revenue, the picture of the financial state of your business should become a lot more clear. You will be able to then determine which areas of your business can have a little “fat” trimmed from them. Perhaps you are keeping more inventory on hand than is necessary, or longer business hours than is really fiscally appropriate. You might see ways in which you can increase the efficiency of your operations, lowering your overall operating costs. It is easy to become complacent with the status quo – that is, until problems arise – but one should always be keeping their eyes peeled for better business relationships and more fiscally responsible deals.

Establish a Plan of Action

If the business is saddled with excessive loan debt, a solid, workable plan for prompt repayment needs to be designed and put in place. One tip is to contact your lending agency to inquire about possible payment options and debt reductions that might make repaying your debts far more manageable. If it it credit card debt your business is mired in, contact your credit card agency as soon as you notice that the debts are getting beyond your ability to service them. Many credit card companies are willing to make a reduced settlement offer if you are willing to pay off your debt in a lump-sum payment. While it can be difficult to make such a large payment at once, this can really save you a lot of money in the long-run, and can even save your business.

Excessive or unused assets can also be liquidated to obtain quick funds to repay your business debts.

Don’t Give up!

Do not assume that because your business has found itself in a bad way financially, that it is all over. With a bit of effort, changes in plans, and reasonable goal setting, it is entirely possible to get your business out of debt without having to close down. You must first take a deep, detailed look at the true financial status of your business – the debts versus income streams – and then tackle the problem head on, thinking of logical and reasonable ways you can get out of debt and get back to what you do best, running your business!

Many people today have a mountain of debt and they are confused about what they can do about it. When debt becomes overwhelming, it may be a good idea for you to enlist the services of a debt settlement attorney who specializes in handling people’s debt. A debt settlement attorney is someone who specializes in dealing with creditors and reducing the amount of money an individual must repay to those creditors. The attorney will act as a mediator between the creditors and the consumer they represent. Using their special knowledge of the debt collection process, a debt settlement attorney is often able to arrange a settlement for their client for as little as 40% of the original debt.

How can an attorney help you?

Debt settlement Attorneys have a much better chance of negotiating a person’s unsecured debt than that person has on their own. Unsecured debts are things like credit cards, overdue hospital bills, and various other charge accounts that have gotten out of hand. Secured debts are things like mortgage, other loans, or back child support. Unfortunately, there is not a lot that an attorney can do for you regarding secured debts. Most creditors typically prefer a consumer to settle rather than run the risk of them declaring bankruptcy. This is the reason that creditors are often willing to settle for significantly less than the amount owed. Most people would agree that one of the most inconvenient things about being deep in debt is the constant phone calls creditors make in an attempt to collect money. A debt settlement attorney has the legal power to have these phone calls stopped. Once you have enlisted an debt settlement attorney’s services, the creditors are only able to deal with the law firm and are to cease calling the client.

Is it right for you?

There are some pros and cons to seeking the help of a debt settlement attorney. It is an advantage to you to have someone with vast knowledge in the field working for you; however, it is important to know that your credit can be negatively affected. After a settlement, many creditors will not mark the debt as paid, and it can remain on your credit report for several years or until the statute of limitations runs out on the debt. A good debt settlement attorney often has the ability to negotiate the removal of a negative listing from your credit report. This is an important skill of the attorney that should surely be utilized by the consumer. If a person’s credit is already in bad standing, they probably do not have much to lose by enlisting the services of an attorney. However, depending on the size of a person’s debt, and the ratio of secured to unsecured debt, often times bankruptcy is the better choice.

How to find a debt settlement attorney

In recent years, many fraudulent debt settlement companies have popped up all over the country, so it is best to learn as much about the law firm of which you are thinking of enlisting the services. Many states have laws that govern and regulate said companies. It is advisable that you learn the specific laws of your state regarding the issue. Many less-reputable companies will talk only to potential clients about the benefits of settling and will never inform the client of the potential hazards to your credit score. The best place to look for a debt settlement attorney is locally. Check your state’s bar association. The bar association licenses attorneys, so you will know who are reputable. Check with the Better Business Bureau (BBB), reviewing any negative comments or complaints regarding a potential attorney. Also, do not forget to determine and compare the attorney fees. These fees can range widely depending on where you live and how difficult your case will be. Finally yet importantly, determine how much a particular attorney will be able to save you in order to determine if they are right debt settlement attorney for you.

For those seeking credit card debt forgiveness, the laws surrounding this very issue can often be hard to understand and navigate. The majority of people seeking credit card forgiveness will have either considered settling their credit card debt or contacting a creditor and having the debt settled that way. While settling credit card debt will help to relieve strain, potential tax consequences are associated with this process. However, there are a number of circumstances that will aid determining whether or not you have to fulfill a tax obligation following credit card debt forgiveness.

Credit Card Debt Settlement

In order to settle credit card debt, you will need to make contact with a creditor and arrange to pay less than your outstanding credit card balance. The total balance settled upon will be dependent on your own negotiation skills and on the amount that the creditor is able and willing to accept. If your negotiation skills are exemplary, you may be able to settle for around fifty percent of your outstanding credit card balance.

The 1099-C Form

Following credit card debt forgiveness, a creditor will provide you with a 1099-C form. This is, in layman’s terms, a form for the cancellation of debt. This form instructs you to declare the settled credit card debt as income to be taxed during the filing of your taxes. If you are in possession of a $8,000 credit card balance and your creditor is willing to accept a $5,000 settlement offer, it is up to you to report the difference as income when you file your tax forms. In this case, a difference of $3000 would have to be declared.

Declaring Credit Card Debt Exceptions

In some situations, it is not necessary to report settled credit card debt as income to be taxed. If you have been granted relief through declaring yourself bankrupt, you are exempt from the tax rule. Other exceptions to the rule center on the status of both your assets and your liabilities. When an individual’s liabilities exceed their assets, they may not have to report their credit card debt to the IRS as taxable income. However, these laws are often not as uncomplicated as they first seem. For this reason, it is advisable to consult with a tax professional. If this applies to you, you may be advised to file the 1099-C form and the IRS 982 form.

Debt Management Programs

Consumer advocate groups and the banking industry have teamed up to attempt to put together a pilot program to enable credit card companies to provide certain individuals with credit card debt forgiveness. Those enrolled in special debt management programs are allowed to eliminate approximately forty percent of their credit card debt. Those enrolled in the program would typically be given a period of five years in which to repay the remaining money owed. Under proposals of this kind, the credit card companies would not be required to report an individual for bad debt for five years. This means that these credit card companies are able to reduce the losses reported for a given period of time.

Credit Card Debt Forgiveness and Credit Card Companies

When credit card companies exhibit debt forgiveness, they are able to write off the debt and clear their books. This in turn increases the company’s chance of survival. Credit card companies will natural attempt to collect as much as they can on bad debts and exhibiting credit card debt forgiveness is a way in which to do it. According to the credit card industry newsletter, the Nilson Report, it is expected that the banks will write off in excess of $390 billion within the next five years.

The Importance of Your Credit Score

If you are granted credit card debt forgiveness, you are likely to gain a significant amount of relief. However, this does come at a price. It could mean that your credit score ends up becoming reduced. The amount at which it will reduce can stand anywhere between 70 and 130 credit points. This will jeopardize your chances of being granted credit in the near future. Furthermore, when you are granted a loan or other form of credit, this will be at a greater rate of interest and you will be required to meet the cost of several fees too.

You Can Achieve Credit Card Debt Forgiveness

If you are deep in credit card debt, while you may be despairing inside, in reality, it is very possible to achieve credit card debt forgiveness. If you follow this simple guide to credit card debt forgiveness, you can be successful in your quest. The maze will be a little easier to navigate and you will be soon relieved of your debt worries.