The Truth about Debt Consolidation

Due the economic tight, they need money for consume or other things. Some people borrow money to unsecured loan such credit card because the approval process is easy and they will get money soon. They   do not have to guarantee your asset to unsecured loan; however, most unsecured loan charge high interest. They use credit card to buy anything and finally the bill bubble. They are difficult to settle the debt because they have no money. A telephone call often disturb them o pay the debt payment soon and it make you mad.
Some people choose debt consolidation in order to settle the debt. They think the debt consolidation will help to settle the debt. They will pay the debt with low payment each month so they can pay off the debt and they still have money to fulfill monthly expenses.
However, some finance experts doubt in debt consolidation. Only few people are success to settle the debt with consolidation. Debt consolidation does not work for most people though the debt consolidation sounds great. We can negotiate the interest that increases your debt.
I agree with Dave Ramsey’s argument that the debt consolidation makes money off of you. Who are people want to loss in their business? I do not think there are no people who want loss in its business. So the creditor does not want to loss too. They will find a way to return back their money with the interest.  It is better than the debtor will not pay their debt.
For example you have debt $30,000 that consist a two year loan $10,000 at 12% and a four-year loan at 9%. The monthly payment for $10,000 loan is $517 and $583for $20,000. You need to provide a least $1000 a month for your debt only. It must be hard to provide thousand dollars a year.
With debt consolidation scheme, you do not have to provide $1000. Perhaps you just pay $640 per month on 9% interest by negotiating to creditor and rolling into one. However it does not mean decrease your debt but you should pay more. The lower payment means you longer the loan. You will pay $46,080 to pay off the loan. Just pay “only” $ 40,392 if you pay $1000 monthly. The difference is $5,688 that you should pay if you decide to use debt consolidation.
Do you want to pay more? Some people think they can settle the debt if the creditor ease them. To me I will settle the debt soon. I contact the creditor to pay off the debt soon. I will sell my asset such as stock mutual fund or precious metal and tight budget to reduce the monthly asset. I will not go eating out unless I pay off the debt. I prefer to pay the debt than eating out. 
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How to avoid bankruptcy

Due to the despair economic, some people are forced to declare bankruptcy. They have no money to fulfill their basic need such food, cloth, and other. Some people are fired by the company. Every company should decrease the productivity and they should also minimize the employee expenses or employee salary.
Of course the employer will be difficult to pay the debt especially the employee who has much debt. They have no money to pay the debt because the company has fired them.
This is not a good news. By filling bankruptcy, the people will be difficult to reach wealth.  Here are some tips to avoid bankruptcy:

1. Debt consolidation
Some careless people borrow money and they think they can pay the debt. Unfortunately, the crisis makes the interest rate high. If you have so much money, you can decide to debt consolidation. You can select the low payment and the low interest. It may enlighten your spending. However, you will need more time to settle your debt.
If you have much cash, you have to pay all debt immediately because he interest rate might increase over many times next
Be careful to find debt consolidation, Sometimes it loads you. The debt consolidation does not work for every people.

2. Talk to the creditor
If you borrow the money from family, you can talk to them. I believe your family will understand with your trouble. Certainly, you should be honest to your family. Do not lie to them because they will not lend some money to you. 
Contact the creditor that you are difficult to pay the debt recently. You can ask them to enlighten the payment. You can pay the interest first and pay the principal when you have much money.
It is not easy to talk the creditor but you should try it. The creditor may be difficult to approve your request because they may have no money. The kind creditor may help you.
If you borrow the money from the bank or financial istitution, you have to write the letter. Tell to the bank that you are in difficult condition but you will pay the loan when you have money.  The bank may ask you to pay the interest first and you should pay the principal later.
It is impossible to cut your debt. Debt is still debt that you should pay. You will not run from your obligation to pay the debt.
3. Sell your asset
When the people have so much asset, they will sell the asset to avoid bankruptcy. They can payoff the debt with the asset. Perhaps you have two car in your garage. Sell one of them to pay off the debt. You can sell both of them if you are able to go o office by bus or train. When you have money, you can buy again. You can also find some antique in your warehouse. Perhaps you can sell it at antique store.
The gold bar is the most liquid asset. While the gold price is so high, you can sell to generate much profit.  Perhaps you still save some gold bar and jewelry, you can sell it. If you do not want to loss them, you can pawn the metal a pawn shop and get cash from it. If you want the gold back, you should redeem the gold a pawn shop. The pawn shop may get benefit from his transaction and you should pay it. However, you get some cash from the pawn.
Surely, you can sell the investment asset such as stock, bond, mutual fund, and ETF. You may not take benefit from selling your investment but you can use the money to settle the debt soon. In my opinion, we should prioritize paying debt than investing. After settling the debt, you can put your money to investment again.
Selling asset is a good way to avoid bankruptcy. You may loss some asset but you can avoid bankruptcy.
4. Create a tight budget
Seek out the ways to trim down the spending side on your budget. Earmark some money to settle your debt. Reduce the spending that you can. See your budget list and find some item that is not too important.
For example: You can reduce the eating out. It can save hundredss dollars a month. You will not die when you stop eating out. You are better to cook the food at your home and eat it. It is more health than eating out.
You can trim down the food spending by:
- Buy in bulk to reduce your food and beverages spending. The supermarket gives rebates for buyer who buy in bulk. You can also save your gasoline cost too.
-Use the coupon to cut the food cost. You can get free product too with the coupon. Some coupon may cut a dollar but it may help you too. There are some coupon in newspaper, magazine, internet and else. You are better to hunt I and buy the item that you need. Do not buy item that you do not need even one penny because you will burn your money for something that you do not need it.
If you buy cloth every month you can reduce the spending. Buy the cloth once in two or three month. It can save hundreds dollars a month. You can also buy cloth when the sore give the discount. Try finding some coupon from internet.
Some people usually go to office by car. This habit is very expensive because you need to buy the gasoline everyday and need money to maintenance it. They can consider go to the office by car or electric train because it is cheaper. You can use the car at the weekend only.
You should obey the tight budget which means you should not spend more than the budget. On the other hand, you are needed to earn more than the budget.  When you can earn more money you can avoid yourself from bankrupt.