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Tuesday, February 26, 2008

Spend today and pay (dearly) tomorrow...

"From homeowners in Michigan to Wall Street financiers, Americans at every income level are caught in a full-blown credit crunch. While problems in housing-related credit are now familiar even to casual readers of the financial pages, the rot of bad debt is spreading. "In addition to mortgages, there are also indications that people are straining in credit cards, auto loans and student loans and default rates are starting to rise," says Nouriel Roubini, professor of economics at New York University.
In the Federal Reserve's January survey, 55 percent of U.S. banks said they had tightened lending standards on prime mortgages in the past three months, while 60 percent had done so for home-equity lines of credit."
(Newsweek.com)

You do not need to be an Economy Guru to understand how and when you can fall in heavy debts and from there to bankruptcy.
You earn 2 and spend 3.
The 1 is the borrowed money.
And the 1 of today plus the ones of the days that follow won't make the situation better.
One thing is sure: soon, the sooner you would like to, you have to face your situation and find a way how.
But how?
First step is acknowledging you have to do something and not just let your debts to drawn you.
And this is the unavoidable step.
Second you need the help of somebody who knows how to and you need to follow his advice.
Do you know what IVA is?
It is the binding agreement between you and your creditors.
And your road to "redemption" begins from here.
With the help of a licensed insolvency practitioner, you work out what you can realistically do to pay back the 1 in excess of your negative balance in a reasonable period of time.
If most of your creditors agree, then you can begin the hard road in an easier way, since all your debts and the future interest on them will be frozen at the time that the IVA proposal is agreed.
If you can manage to maintain your monthly payments, then you could be free of debts in five years or less.

Let's face the "worst case scenario", where your creditors won't agree to an IVA.
You still can propose a Structured Repayment Plan with the aid of Clear Debt.
It will probably take longer than five years, but you will be able to reach your goal.
But your goal shouldn't just be "without debts", it should be "without making debts".
While borrowing money to invest in a job or a career you think will give you a better income and most of all will allow you to pay back the borrowed money, making debts without knowing you will be able to honour is the stupidest thing one should do.
And it is better understanding before than crying later.
Many of us have been brought up with the false idea than the future will always be better than the present and spending today and paying tomorrow is the normal way of living.
But many of us have understood that this is rarely the case.
Very often spending today means not being able to pay tomorrow and THERE IS NOTHING like a FREE LUNCH, even less a FREE LOAN or a FREE MORTGAGE or a FREE DEBT.
If you spend today you will pay dearly tomorrow...
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