Debt Quotes - Page 28

• The Bankruptcy Reform Act of 2005 made it harder for individuals to file bankruptcy, which is always the last resort. Unfortunately, simultaneously consumers racked up so much debt that counseling companies - which are higher up on my list if you need help managing your debt - are sometimes unable to help. So if you fall into this camp, debt settlement may be something to consider.

  Jean Chatzky

  Fall, Lasts, Lists

  Source: www.nbcnews.com

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• The debt settlement company will direct you to stop paying your creditor and instead send the money directly to them each month. The company's goal is to demonstrate to your creditor that you don't have the money to pay up - that's your leverage. After a few months, the company will typically go to the creditor and say, "I'm holding X dollars on behalf of your customer. He doesn't have the money to pay you, so you should take this amount as a settlement or you'll end up with nothing." If the creditor wants to get paid badly enough, it will take the money.

  Jean Chatzky

  Goal, Each Month, Dollars

  Source: www.nbcnews.com

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• You really don't need to hire a debt settlement company to negotiate with your creditors.

  Jean Chatzky

  Needs, Creditors, Settlement

  Source: www.nbcnews.com

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• If you are able to settle, you'll be getting off rather easy. Debt settlement companies can sometimes get you off the hook for a large percentage of your debt - in many cases, up to 50% will be written off.

  Jean Chatzky

  Hook, Able, Sometimes

  Source: www.nbcnews.com

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• You settled a debt instead of paying in full will stay on your credit report for as long as the individual accounts are reported, which is typically seven years from the date that the account was settled. Unlike with bankruptcy, there isn't a separate line on your credit report dedicated to debt settlement, so each account settled will be listed as a charge-off.

  Jean Chatzky

  Years, Long, Credit

  Source: www.nbcnews.com

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• If you're filing bankruptcy, you will likely want to hire an attorney. But for debt settlement, a company is sufficient, or as I said, you can often do the legwork on your own.

  Jean Chatzky

  Want, Said, Attorney

  Source: www.nbcnews.com

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• No company can promise an end date, but if you have multiple debts, the first one should be settled within a year.

  Jean Chatzky

  Years, Promise, Firsts

  Source: www.nbcnews.com

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• One thing I want to make clear: You never want to hide from your debts. It doesn't work.

  Jean Chatzky

  Want, Clear, One Thing

  Source: www.nbcnews.com

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• Once the settlement is completed, the credit card company will report it to the credit bureaus, which will then make a notation on your credit report that that account was paid by settlement. That's going to signal to future lenders that you left the last guy hanging. That's why, as with bankruptcy, debt settlement is an extreme option, one you shouldn't take lightly. It's not just an easy, cheap way to eliminate debt.

  Jean Chatzky

  Guy, Cards, Credit

  Source: www.nbcnews.com

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• Most people don't know this, but if you settle a debt for less than the amount you owed, you are potentially responsible for taxes on the forgiven debt. Look at it this way: You received goods and services for the full amount of debt, but you're only paying for a portion of it - sometimes less than 50%. Anything more than $600 is generally considered taxable, but the IRS will sometimes waive the tax if you can prove that your assets were less than your liabilities when the debt was settled.

  Jean Chatzky

  People, Looks, Irs

  Source: www.nbcnews.com

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• Rolling all of your debts into a single loan is a good idea - in theory. In fact, it can be a great idea.

  Jean Chatzky

  Ideas, Rolling, Facts

  Source: www.nbcnews.com

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• A consolidation makes sense only if you can lower your overall interest rate. Many people consolidate by taking out a home equity line loan or home equity line of credit (HELOC), refinancing a mortgage, or taking out a personal loan. They then use this cheaper debt to pay off more expensive debt, most frequently credit card loans, but also auto loans, private student loans, or other debt.

  Jean Chatzky

  Home, People, Cards

  Source: www.nbcnews.com

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• You also need to understand that when you consolidate credit card debt into mortgage debt - like a home equity loan or a HELOC [ home equity line of credit ] - you're taking an unsecured debt and turning it into a secured debt.

  Jean Chatzky

  Home, Needs, Cards

  Source: www.nbcnews.com

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• If you default on an unsecured debt, you won't lose anything (except points on your credit score).

  Jean Chatzky

  Credit, Default, Score

  Source: www.nbcnews.com

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• When you default on a secured debt, the creditor takes the asset that backs up that debt. When you convert credit card debt to mortgage debt, you are securing that credit card debt with your home. That's a risky proposition.

  Jean Chatzky

  Home, Cards, Credit

  Source: www.nbcnews.com

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• In about one-third of credit card consolidations, within a short period of time, the cards come back out of the wallet, and in no time at all, they're charged back up. Then you're in an even worse position, because you have the credit card debt and the consolidation loan to worry about. You're in a hole that's twice as deep - and twice as steep.

  Jean Chatzky

  Worry, Cards, Credit

  Source: www.nbcnews.com

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• If you have even a smidgen of doubt that you'll be able to stay away from racking up additional debt, don't do it.

  Jean Chatzky

  Doubt, Able, Ifs

  Source: www.nbcnews.com

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• If you are, consolidating at a lower interest rate can help you pay off your debt faster. But if there's even a small chance that you'll spiral back into debt, it's not for you.

  Jean Chatzky

  Pay, Helping, Chance

  Source: www.nbcnews.com

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• When you get the economy growing, that's when you can deal with the national debt.

  Mike Pence

  Growing, Economy, Deals

  Source: www.politico.com

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• Stay on the path that the Democratic Party has us on, we're going to be in a mountain range of debt.

  Mike Pence

  Party, Mountain Ranges, Path

  Source: www.politico.com

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• We can meet the obligations of Social security and Medicare. If we stay on the path that your party has us on, we'll be in a mountain range of debt and we're gonna face hard choices.

  Mike Pence

  Party, Mountain Ranges, Choices

  Source: abcnews.go.com

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• Mike Pence did ask this question about debt and the debt explosion on the [Donald] Trump plan is much, much bigger than anything on the [Hillary] Clinton side.

  Tim Kaine

  Sides, Clinton, Explosions

  Source: abcnews.go.com

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• People think of a business cycle, which is a boom followed by a recession and then automatic stabilizers revive the economy. But this time we can't revive. The reason is that every recovery since 1945 has begun with a higher, and higher level of debt. The debt is so high now, that since 2008 we've been in what I call, debt deflation.

  Michael Hudson

  Recovery, Thinking, People

  Source: www.counterpunch.org

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• The banks' product is debt. They try to tell customers that "debts are good for you," but the customers can't afford any more debt, so there's no way the banks can continue their current business plan.

  Michael Hudson

  Trying, Way, Currents

  Source: www.counterpunch.org

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• We're at the end of long cycle that began in 1945, loading the economy with debt. We're not going to be able to get out of it until you write down the debts. But that's what the IMF believes is unthinkable. It can't say that, because it's supposed to represent the interest of the banks.

  Michael Hudson

  Believe, Writing, Long

  Source: www.counterpunch.org

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