Restructuring Debt

Free Credit Report

In this day and age of identity theft, it is vitally important you monitor your credit report.

You can get a copy of your credit report FREE (not a misleading statement like so many of those TV commercials you see that say “offer implies enrollment in a fee-based credit monitoring service).  The for-real-free credit report is available at: AnnualCreditReport.com

According to their website …

AnnualCreditReport.com is a centralized service for consumers to request free annual credit reports. It was created by the three nationwide consumer credit reporting companies – Equifax, Experian and TransUnion.

AnnualCreditReport.com provides consumers with the secure means to request and obtain a free credit report once every 12 months from each of the three nationwide consumer credit reporting companies in accordance with the Fair and Accurate Credit Transactions Act (FACT Act).

Be sure to download your credit report from each of the big three credit reporting companies – Equifax, Experian, and TransUnion.  A lot of the information will be repetitive, but it is important to check out all three.

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SERIES: Restructuring Debt – Part Six

Welcome to the latest series at JosephSangl.com – Restructuring Debt

I am excited to embark on this series of posts because interest paid toward debt is one of the largest obstacles to gaining traction for one's own Debt Freedom March.

Of course, one way to eliminate the interest is to sell some stuff and become debt-free.  But I recognize that for some people, they have debt that they are going to have to focus on and just pay it off.  If this describes you, then I trust that this series helps you gain speed in your Debt Freedom March! 

Part One – Know What You Are Paying

Part Two – Lower The Interest Rates!

Part Three – Lower The Interest Rates! – Continued

Part Four – Lower The Interest Rates! – Continued

Part Five – Lower The Interest Rates! – Continued 

There are many approaches one can take to lower their interest rates.  In Part Two, I covered the "negotiation" avenue.  In Part Three, we covered surfing the balances to zero-percent credit cards.  In Part Four, it was the debt consolidation option.  In Part Five, it was the credit score option.  In Part Six, I will be sharing my most favorite way to restructure debt.

Part Six – CRUSH IT, SMASH IT, HAMMER IT, DESTROY IT

I used to be broke.  I used to have $4.13 in my bank account after paying all of my bills, and I was pumped because it was a positive balance.  Yet, I was sending hundreds of dollars every single month to banks for debt.   I finally experienced my I Have Had Enough Moment (IHHE Moment) and attacked my debt.

I know that the interest is annoying.  I know that trying to get the lenders to lower their interest rates is frustrating and humiliating.  Besides that – much of that is out of our control.  But controlling how we spend our money from now on IS in our control.  Not signing up for more debt IS in our control.  Going to work for sixteen hours a day to eliminate our debt superfast IS in our control.  Selling our car, boat, truck, collectibles, and other niceties IS in our control.  No, it might not be fun, but paying hundreds and thousands of dollars a year in interest is MISERABLE and robs us of the ability to go do EXACTLY what we have been put on this earth to do!

So I end this series with two questions and their answers.

Q:  How much interest do you have to pay when you have zero debt?

A:  ZERO

Q:  How much interest is paid to you when you have money in the bank or invested?

A:  Anywhere from 3% to 12% or more!  Paid TO you!  I decided long ago to choose to have interest paid to me instead of paying it to someone else.

I trust that this series has helped you.  I love hearing the stories.  If you would be willing to share your story or would like to sign up for a free financial counseling session with one of our fifteen trained volunteer counselors, fill out the contact form HERE

SERIES: Restructuring Debt – Part Five

Welcome to the latest series at JosephSangl.com – Restructuring Debt

I am excited to embark on this series of posts because interest paid toward debt is one of the largest obstacles to gaining traction for one's own Debt Freedom March.

Of course, one way to eliminate the interest is to sell some stuff and become debt-free.  But I recognize that for some people, they have debt that they are going to have to focus on and just pay it off.  If this describes you, then I trust that this series helps you gain speed in your Debt Freedom March! 

Part One – Know What You Are Paying

Part Two – Lower The Interest Rates!

Part Three – Lower The Interest Rates! – Continued

Part Four – Lower The Interest Rates! – Continued 

There are many approaches one can take to lower their interest rates.  In Part Two, I covered the "negotiation" avenue.  In Part Three, we covered surfing the balances to zero-percent credit cards.  In Part Four, it was the debt consolidation option.  In Part Five, I will be covering the credit score option.

Credit Scores Matter!

I know.  I am brilliant.  But it matters so much when it comes to reducing the interest that lenders will charge on your existing debt (this is a no-new-debt zone!).  As your credit score improves, your credit card surfing and bill consolidation loan options will improve.

There is a company that actually specializes in consolidating loans for people with excellent credit.  I was told about this company by a banker friend who has been extremely impressed with the way this company is doing business.  It is called FirstAgain.com.  It is actually stated on their web site that "Excellent and Substantial Credit Required".  No need to apply if you have trashed credit, but it looks like a good option for those who are looking restructure their debt and gain traction with their Debt Freedom March.

Of course, there are also companies that specialize in loans for people with horrible credit.  Payday loan joints, title loan sharks, pawn shops, and various other organizations provide loans that have HORRIFIC interest and should never be considered a viable option for someone who expects to gain traction on their Debt Freedom March.  I have yet to meet the first person who became debt free because of their rip-off payday loan.  I have met hundreds who have became completely hopeless because of their rip-off payday loan.

In the sixth and final installment of the Restructuring Debt series, I will be sharing my favorite way to restructure debt.

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SERIES: Restructuring Debt – Part Four

Welcome to the latest series at JosephSangl.com – Restructuring Debt

I am excited to embark on this series of posts because interest paid toward debt is one of the largest obstacles to gaining traction for one's own Debt Freedom March.

Of course, one way to eliminate the interest is to sell some stuff and become debt-free.  But I recognize that for some people, they have debt that they are going to have to focus on and just pay it off.  If this describes you, then I trust that this series helps you gain speed in your Debt Freedom March! 

Part One – Know What You Are Paying

Part Two – Lower The Interest Rates!

Part Three – Lower The Interest Rates! – Continued

Part Four – Lower The Interest Rates! – Continued 

There are many approaches one can take to lower their interest rates.  In Part Two, I covered the "negotiation" avenue.  In Part Three, we covered surfing the balances to zero-percent credit cards.  In Part Four, I will be covering the debt consolidation option.

Debt Consolidation/Home Equity Loan

Another option to consider is to visit your local bank or credit union with your current debts and interest rates and see what they can do to lower your interest rates.  Be careful with this, though.  Banks are very likely to try to get you to use your home equity to consolidate your higher interest debts.  If used properly, this can be a good thing because you are probably going to be able to deduct the home equity loan interest from your taxes. 

But one thing that I see way too often is the fact that folks will consolidate their debts using their home equity and then NOT change their financial behavior that led to the debt in the first place.  The results?  A mortgage, home equity loan, AND the high interest debts have showed back up.  My advice is to prove to yourself that you truly have changed your spending behavior for at least six months before using this option.

I speak from experience here.  Several years ago, I obtained a debt consolidation loan for several credit cards and some department store debt.  We paid $315.60 a month (I still remember the amount) for FOREVER.  Finally the day came when the last payment was made.  Guess what?  Our credit cards were loaded back up with an amount equal to what we had consolidated in the first place!  We had not changed our spending behavior, and it cost us.   If we had consolidated the debt AND stopped our financial misbehavior, it would have been a great decision.

I know that Couple #3's Debt Freedom March has been significantly improved by obtaining a 401(k) loan.  I am NOT a big fan of this type of debt consolidation, but they had explored the "negotiation" and "surfing" options thoroughly and had run out of other options.  As a result, they have decided to obtain a 401(k) loan.  Guess what?  It has lowered their interest SUBSTANTIALLY and if you check on their monthly progress (HERE), you will see that this move has given them the traction they so desperately needed.

In Part Five, I will be sharing a resource available on-line that can be a huge help to those with excellent credit who are looking to lower their interest rates. 

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SERIES: Restructuring Debt – Feedback

I am PUMPED to hear how people are applying the Total Interest Tool taught in Part One of the Restructuring Debt series.

I would love to see how you are using the tool to formulate your plan of attack for restructuring your debt and gaining traction for your Debt Freedom March!

For example, Kings Pray has blogged about how he used the Total Debt Interest tool.  You can read that post HERE.  Be sure to click on the link in the blog that actually shows the tool with his Total Debt Interest calculation.  I love transparency and people being real.

If you blog about it, please comment below and provide a link to your post.

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