Debt may be a part of our way of life but finding yourself drowning in debt is a different story altogether. Millions of consumers are deep in debt these days. According to the most recent survey conducted by the Federal Reserve, an average American owes $4,293 per credit card and spends nearly 10% of their monthly disposable income on consumer debt alone. Add to that figure your monthly household expenses and other debts that need to be paid such as mortgage and car loans.


The weight of these financial obligations that you have to carry every single month can leave you with an overwhelming sense of helplessness. These days, debt and financial problems are one of the top triggers of stress-related illnesses such as anxiety disorder, depression, and even heart attack.

Good thing, there are debt relief programs to help millions of debt-stricken consumers, which is why it essential to know their importance and how each program works for the benefit of those who need it.

A world without debt relief

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Imagine a world without debt relief: You are faced with a huge amount of consumer debt that is accumulating interest, which makes getting out of debt extremely difficult. This usually leaves you with two options: the first is that you continue paying the minimum payments just like what you’ve always done until you stretch your budget so thin you can barely afford the basic needs of your family. What’s worse is that a huge chunk of your payment only goes towards the interest of your outstanding balance. The principal amount remains the same. In essence, it’s like you’re doing nothing to solve the problem.

Another option is to declare bankruptcy. Many people see bankruptcy as the only way out to a debt problem, never minding the repercussions and the impact of this action on their future.

In a world without debt relief, these two extremes are the only options that you have. Unless you win the lottery or by some stroke of luck you receive an inheritance from a relative in the form of money that you can use to pay off all your debts in one go, you are stuck in a catch-22. Either way, you lose.

Why debt relief is so important

Debt relief programs are a game changer. These measures give the indebted person a respite from their huge financial burden, either fully or partially.

When you are enrolled in a debt relief program, financial situation and capabilities are assessed and a plan is carefully laid out in order to address the debt problem in such a way that will benefit you. The best of debt relief organizations will help you not only in having your debts paid off but also help you save money along the way.


Debt relief gives you the opportunity to take control of your finances once again and gain back the confidence that you have lost because of your dire financial situation. Most importantly, it gives you a viable option to actually solve your problem rather than letting yourself get stuck in the vicious minimum monthly payment loop until all your debt gets out of hand and you are left with no other choice but to file bankruptcy. Debt relief essentially stops you from taking that extreme measure and spare you from its repercussions.

Take the first step

There are several debt relief options to choose from such as debt settlement, debt negotiation, and debt consolidation. The first thing that you must do is to take action. Take advantage of the free confidential consultation that debt relief companies offer to help yourself decide which program is best suited for your predicament and current financial situation. Don’t be afraid. That first step is the beginning of your journey to get your finances back in order and lead you to your dream of financial freedom and independence.


Four Things To Consider When Choosing A Debt Relief Company

There are hundreds of debt relief companies across the country that offer debt relief programs to anyone who finds themselves struggling to pay off their debt. It’s easy to pick one right off the bat, just to get rid of the mounting debt that cripples your finances. With professional help from a debt relief company, there is no doubt that you can deal with your debt and get your finances back on track. The question is, are you working with the right company that could provide you with the best solution to your problem?

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Dealing with debt can be overwhelming and stressful so it is essential to know where to get help and the people who will assist you resolve your debt. Below are four important factors that you need to consider before getting the services of a debt relief company:

1. Company Profile

When you are evaluating a company, the first thing you should check is its company profile. It gives you a brief overview of the company’s background – how long it has been in the business, what kind of services does it offer to its clients, its accolades and other achievements

People Gathering Inside Room

A debt relief company’s tenure in the business is extremely important as it speaks a lot about the organization’s reputation, integrity and the quality of service it provides. No debt relief organization will last for a number of years if it doesn’t conduct its business truthfully and decently.

It is also important to take note of the reviews that a debt relief company gets from reputable third-party review websites such as and where you can get an unbiased feedback from actual customers who had actual experience with company’s service.

2. Affiliations

A debt relief company’s membership with the right organization guarantees that it conducts its business to the highest ethical standards and that all of its employees get the training and support necessary for them to do their jobs efficiently.

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You know that you’re in good hands when you see that the company that you want to work with is affiliated with the American Fair Credit Council (AFCC), and the International Association of Professional Debt Arbitrators (IAPDA).

The International Association of Professional Debt Arbitrators ( IAPDA) is a training and certification organization that ensures all affiliated debt relief professionals are equipped with the proper knowledge and skills to help their clients find the best possible resolution for their debt problem.

Accredited members of the American Fair Credit Council (AFCC) adhere to the standards set by the organization to assure that consumers who are looking to solve their debts through a debt relief program have their rights protected and are treated ethically.

3. Services Offered

Debt relief companies offer more or less the same debt relief programs offered by other debt relief companies all over the country such as temporary interest rate reduction and consumer credit counselling. While these eases the burden of debt, these solutions offer only a short-term relief. In the end, you’ll still have to pay back the full amount of your debt plus the fees charged to you by your company of choice.

Look for a company that offers a program focused on saving you as much money as possible while having your debt balance negotiated so that you will only have to pay less the amount than what you originally owe. More importantly, choose a debt relief company that will offer a resolution based on your unique financial situation.

4. Price

Price can be a huge deal breaker for most consumers, especially when money is already tight. Everyone wants to get the value of what they’re paying for and save as much as they can at the same time.

Black Calculator Near Ballpoint Pen on White Printed Paper

Some debt relief companies charge their clients flat out for the initial consultation and would charge a monthly fee for their service once you enrol in a program.

A truly reputable debt relief company offers a free and confidential consultation to get a better understanding of your debt problem and current financial situation to see which program suits you best, how long it will take you to pay off your debt, and how much you could save.

It is also important to take note of how much the debt relief company of your choice charge for their service. A flat fee of 20% for an in-house program is a fair price to pay but if you are going to be billed 25% and above, you better think twice before signing up. What you want is a solution for your financial situation and not another burden on your shoulders.

Final word

Don’t just sign up with a debt relief company just because they are offering an “easy way out” to your dilemma. Use the guidelines above to evaluate the company of your choice. Remember, dealing with debt can be easy only when you’re working with a team that you can trust.



Tax Audit 101: Understand The Process and Know What To Do

Nothing is more daunting to a taxpayer than the possibility of having their tax returns audited by federal or state tax authorities. Depending on the outcome, an audit could mean penalties, a huge tax debt that you may not even be aware of, and for some, it could also mean jail time. But do we fully understand what a tax audit really means and how one gets selected for an audit? More importantly, do you know what to do once you find yourself in this rather stressful situation?

What Is A Tax Audit?

A tax audit is conducted to review an individual or a business’s accounts, tax returns, and financial information to verify if the reported information and the disclosed amount of tax are correct. Being subjected to an audit doesn’t necessarily mean that there is a problem. Once it has been substantiated that there is nothing amiss in your returns, then the audit will be concluded. Otherwise, you may have to provide more proof to the tax authorities for further examination and review.

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The Tax Audit Selection Process

The IRS has a slew of procedures to do statistical analysis and thorough evaluation to verify whether all the information you declared on your tax returns is correct.

First, tax returns are scored using the following computer programs:

  1. The Discriminant Function System (DIF). Tax returns are checked for red flags thru a computer program called the Discriminant Function System (DIF). This system rates the accuracy of all returns submitted to the IRS. The more red flags found on your tax return, the higher DIF score will be, which means that there’s a great likelihood that your tax return will be audited.
  2. The Unreported Income Discriminant Function (UIDIF). As its name states, this system’s main function is to rate a tax return’s likelihood of having unreported income. It analyzes a taxpayer’s income and expenses ratio and sees if it’s within the norm. Any discrepancies on this aspect will be flagged by the system.
  3. The Information Returns Master File (IRMF). This system serves as a huge repository of data submitted by employers and other third-party institutions required to report taxpayer’s income. The IRMF is used to ensure that all necessary information is provided to validate the reported income on your tax return.

Aside from these computer programs, The IRS also reviews other supporting documents just to check any disparity that may lead to an audit. Once selected, the IRS will send you a notification via mail. Keep in mind that the IRS will never initiate an audit by phone.

The odds of you getting audited is fairly low. During the 2017 Fiscal Year, only 0.6% of the total individual returns filed were audited. One contributing factor that may lead to an audit is the numbers you provide on your tax returns, regardless of your income. Undeclared income, large deductions, and credits relative to your earnings may cause tax authorities to further scrutinize your returns.

“What am I going to do?”

Once you receive that dreaded letter from the IRS, you will be given 30 days to respond whether you agree with their findings or not.

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While it is imperative for you to act quickly to resolve this predicament, the biggest mistake that you will ever commit is to take matters into your own hands. Remember, you were selected for an audit due to the fact that there are discrepancies found in your tax returns. Depending on the issues found in your returns, tax authorities may utilize various audit techniques, request for more documents, and ask you further questions regarding your finances. At this point, you cannot afford to make a mistake as it could lead to hefty fines imposed against you.

On the other hand, if you ignore the matter thinking it would go away, you may find yourself in deeper trouble. Unlike other financial institutions, the IRS has the authority to take legal action against those who owe the agency a tax debt. They have the power to garnish your wages, levy assets, or even file a tax lien and eventually seize your property just to have your tax debt paid off.

When you have been selected for a tax audit, it is best that you hire professionals from a reputable tax debt relief company who are in full legal compliance with federal and state tax authorities to handle your case and guarantee that you get the best possible legal solution for your tax debt. These tax professionals understand your rights as a taxpayer. They can assess your situation and propose which among the tax relief programs available can best fix the difficult situation you are in.

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Tax audits are a serious matter. But while it is a disconcerting situation to be in, know that you don’t have to deal with it alone. This is one situation where you would definitely need all the help you can get, especially from tax professionals who are highly experienced in handling the most complex tax debt cases. The sooner you get the help that you need, the sooner you will be able to find a resolution to your problem.


Money-Saving Tips For The Budget-Conscious Family

All parents want to provide the best for their children. However, the cost of child-rearing goes up every single year, with no signs of ever going down. On top of our basic household necessities and our children’s needs, we also have to take into consideration those emergency situations that we may encounter along the way. This is where our budgeting skills will be put to test. Let’s admit that there are times when we are torn between scrimping to save for rainy days and splurging for our children. What we need to realize is that the trick is to strike a balance between the two: we don’t need to blow our budgets just to give our children the best and we also don’t need to scrimp to the point where we are almost depriving our family those little luxuries that they so deserve from time to time.

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If you are one of those budget-conscious parents out there, these money-saving tips can help you save more without having to completely change your lifestyle.

  1. Pay with cash.

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As we all know, a lot of people go into debt by falling victim to the monthly minimum payment trap. Once you get yourself deep in debt, it is hard to get out, especially when you have a growing family to consider. So, if you can’t afford to pay the entire balance in full on your monthly credit card statement, pay in cash. This way, you save yourself and your family from having to pay more than the actual purchase price because of the interest accruing on a monthly basis. Fewer expenses mean more savings for your family.


  1. Organize your grocery and shopping trips.

Before you head out to the grocery, check your fridge and pantry, and make a list of the things that you need to buy. This also applies if you are going shopping. Stick to your grocery and shopping list ALL THE TIME. By creating a list, you can anticipate how much you are going to spend on your groceries and see if you are following your budget or exceeding it.

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You may ask your kids to write down the things that they need before you go out and run your errands. If you are bringing the kids along, learn to manage expectations. You may tell your kids that they can have ice cream before heading home. But if your kids want something else, give them a choice. It’s either of the two – say, your kid can either have ice cream OR buy that toy that he or she likes. But never both. This is a good way to teach your children how to be budget-conscious.

  1. Hold a garage sale every few years or so.

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Get rid of stuff you don’t need by holding a garage sale at your home. Not only this is a great way to earn extra cash for your family, it is also a fantastic activity for the whole family, as well as the community.


  1. Downgrade, if not cancel those subscriptions that you and your family can do without.

Who needs to have a copy of that glossy fashion magazine every single month when you can read the same articles online for free? How often do you watch TV? Do you really need to have premium Cable TV subscription and have all the complete list of HD channels when you only have time to watch the 6 o’clock news or sit down for a couple of minutes to watch cartoons with the kids.

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Magazine and cable tv subscriptions are just some of the few things that your family can do without so it is best to just have it canceled and have the money allotted for these subscriptions allocated to other more important things such as your family’s emergency funds.

  1. Pack your own meals and make your own coffee.

Why spend $2.70 on a caffeinated beverage when you can make your own at home? With all those free online tutorials available these days, you can learn how to craft your own coffee-based drink at the comfort of your own home.

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Preparing and packing home-cooked meals is also a perfect bonding activity for you and your children. Plus, you can guarantee that your kids are only eating the good stuff, lovingly prepared by mom or dad.


  1. Pay all your bills on time.

Most services charge late fees when you pay your bill on x number of days past the due date, so it is always best to pay your bills on or before the due date.

  1. Educate yourself.

 Sometimes, having debt is inevitable. The husband may have missed out on filing his income tax return, thus incurring him a tax debt. Or maybe your college sophomore maxed out for whatever reason that supplementary credit card you have given, and you’re stuck with making minimum payments.

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Before you even get yourself in this situation, it is best that you arm yourself with knowledge on how to prevent being in that predicament or mitigate the impact of a financial problem to your family, assuming that you are already burdened by a huge debt. Knowing what your options are is important. To every debt problem, there is a corresponding debt relief program that may help resolve your money woes. It is also essential that you know who you are turning to for help.

When faced with money problems, it is only right that you seek the help of a highly-accomplished debt relief organization that offers free consultation services. Not only do you get sound advice from experienced professionals on how debt relief programs can help resolve your existing debt problem, you get it for free. Knowing what your options are will help you focus your energies on resolving the problem at hand rather than dwelling on it and eventually resorting to extreme measures such as filing for bankruptcy.


Being budget-conscious isn’t just about expertly slashing your monthly budget to make ends meet and building up your savings, it is also about having a backup plan and knowing what your options are to mitigate the impact of any financial problems that may hit your household. Not only will you survive whatever money-related crisis that comes your way, you will also guarantee your family’s financial security in the future.








Emergency Funds: Why Is It Important And How To Build It

Personal finance management isn’t just about staying away from debt, it is planning way ahead to prepare oneself in the event when an unforeseen circumstance arises that will require for you to have access to a pool of funds. According to, about 57 million Americans are just one emergency away from a financial disaster. This is a very scary thought and an extremely dire situation to be in. We never know what the future holds so it is best to be prepared for whatever life brings us.

What is an emergency fund?

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An emergency fund is basically money set aside needed in the event of a financial crisis such as an illness, loss of a job, when a calamity strikes or even death. This pool of money should be enough to cover at least six to nine months worth of living expenses to give yourself ample time to recover from a financial setback.

How to build an emergency fund?

Before building an emergency fund, it is essential to identify what is considered as an emergency and how long the effect of this dilemma will last. There are small-scale emergencies such as a broken car in need of repair or an appliance that needs to be replaced immediately. Then, there are large-scale emergencies such as illness that require hospitalization and long-term medication, loss of a job or when a calamity strikes such as fire or earthquake.

After identifying what counts as a true emergency, it’s now time to plan and build an emergency fund.

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  1. Review your monthly household budget. Track how much is your actual monthly income and expenses. This is a bit easier if you are single. But if you have a family to take care of, it is best to consider their needs as well and how much the cost will be on a monthly basis. Utility bills, loan payments, and monthly savings all also to be taken into consideration.

  1. Set a realistic goal and timeframe. After going over your monthly budget and have considered each of your family member’s needs, you can now set a goal on how much you wish to save in the next six months or so. If your current monthly budget only allows you to save $200 on your set timeframe, then stick to it. You may work yourself way up eventually unless you are willing to make necessary budget cuts to beef up your emergency funds right away. But if you have access to some extra cash and you got everything practically covered, including your savings, then it’s only prudent to put your extra cash on your emergency funds savings.

  1. Make your funds easily accessible. The essence of an emergency fund is having cash you can easily get your hands on in times of need, so keeping your funds in a place that will require a lot of paperwork before you can withdraw your funds defeats the purpose of having an emergency fund in the first place. Put your funds into regular savings account that you can withdraw at any time without penalty because the last thing you’ll want in a time of crisis is to deal with paperwork and pay penalties just to access your own money.

  1. Have restrictions. Know your limits. Keep in mind that your emergency fund is for serious and unexpected situations. Week-long vacations on some exotic location, Black Friday sale, and retail therapy because you want to blow off some steam or make yourself feel better after a bad break-up do not qualify as an emergency situation. Emergency funds are not also meant to be used to pay off your debts. Any purchase or trips should be thought of carefully and must be according to your budget.

No one wants to be left in financial ruins after a major setback in life. Think of your emergency funds as one way of securing your and your family’s future financially without having to resort to taking out debt after debt just to make ends meet and sustain your family’s basic necessities. Make this one of your top priorities and you will surely have a stronger foundation towards financial security.

Have a backup plan. Just in case…


If building up an emergency fund seems impossible due to debts that you are struggling to deal with, consider hiring the services of a professional to know about debt relief options that you can avail. Debt relief programs, as its name states, offers relief to those who are saddled with debt.  A highly-experienced debt relief counselor can help you explore options and put you in a payment plan based on your current financial situation. This way, you can take care of your debt without having to drain your monthly budget. Once you’re out in the red and have your finances back on track, you can proceed with rebuilding your emergency funds because nothing is more comforting than not having to worry about money, even in tough situations.


Debt Relief Programs – Your Options To Get Out Of Debt


A Freelancer’s Guide to Taxes

Being a home-based freelancer offers perks such as flexible working schedule, multiple jobs you can do at the comfort of your own home, and having more time with your family. But this arrangement also cost freelancers plenty. Working from home means setting up a suitable workspace at your home, buying your own office supplies and subscribing to high-speed internet services to be able to do your job and stay in touch with your clients. You will also be solely responsible for paying your own taxes. This is one of those important things you need to get right every single time because you don’t want to end up with an audit by the IRS.


The Basics

Freelancers are classified by the IRS as an independent contractor. This means that you are taxed on your net income as a self-employed individual. Your net income is determined by your gross receipts less all business expenses that you can deduct.


The IRS allows independent contractors deduct certain business-related costs to offset their expenses. According to the agency’s guidelines on Deducting Business Expenses, “To be deductible, a business expense must be both ordinary and necessary. An ordinary expense is one that is common and accepted in your trade or business. A necessary expense is one that is helpful and appropriate for your trade or business. An expense does not have to be indispensable to be considered necessary.” Here are some good examples of what qualifies as a business expense:


  1. Home Office

All freelancers need a dedicated space in their home where for business purposes. Any part of the house will do (i.e. the attic or the cupboard under the stairs) as long as you can identify that area as your home office. As a general rule, you can deduct 10% of rent, utilities, and property taxes.


  1. Office Supplies

Anything that is considered as office supplies such as printer paper, envelopes, post-it papers, and staples are deductible. A coffee maker doesn’t count as an office supply.


  1. Equipments

If you are using a smartphone and a laptop or a desktop computer solely for business purposes, then these can count as a deductible.


  1. Training and Education

This also counts as a deductible provided that the training you are going to take is necessary to run or for the growth of your business.


  1. Professional Services

Anything you spend on professional services such as payment for that web developer who updated your website or for a blogger who writes articles for you.


Accomplished and Compliant



If you are just starting out as a freelancer and have never filed for tax returns for yourself, it is best to hire the services of a tax professional or a Certified Public Accountant to ensure that you are fully compliant and nothing is amiss in your tax returns. As mentioned earlier, errors and discrepancies may lead to an audit of the IRS and may cause you to incur a tax debt without you even knowing it. These professionals can also offer you the best tax advice and enlighten you more with the specifics on taxes for freelancers.

Should you incur a tax debt due to a filing error or disparity on your records, keep in mind that you should never deal with your tax debt and the IRS alone. Tax relief options are available to help ease the burden it causes among struggling taxpayers. Seek the help of a tax debt relief professional as they are highly-knowledgeable with regards to the complexity of tax laws. Dealing with tax debts requires both a thorough understanding of the law and a careful evaluation of your circumstance, so it  is best to let the experts find a resolution to tax-related concerns in order to come up with the best possible solution that fits your financial standing and situation.


To know more about CuraDebt Tax Relief, visit:


Understanding How Credit Card Works

The use of credit cards has been a part of our daily lives for nearly two decades now. It is a rare sight these days to see people making a purchase and paying in cash upfront. Credit cards give anyone who wields it an easy access to a line of credit, and if you maintain a good credit score, it is easier to apply for another one, with a higher line of credit.

There are many advantages in using credit cards. But why is it causing so much financial problem to millions of cardholders these days? Do cardholders really understand how these plastic thingamajigs work? Let’s  have a closer look at how credit cards really work and see what exactly is causing the problem.

Credit Card Balance and Credit Limit

Your credit card balance is the amount you have charged to your credit card on the purchases you have made but have yet to repay. Every time you use your credit card to make a purchase, the amount is added to your balance.

Each credit card has a certain limit, also known as the credit limit. This is the maximum amount of credit extended to cardholders by the issuers. Once the cardholder uses up all the credit in his or her plastic, that credit card is considered “maxed out” and cannot be used until a portion of that balance is paid off.

Finance Charges and Annual Percentage Rate

A finance charge is a fee that you pay to have a credit. This is set by your credit card’s annual percentage rate or APR, which is the annual rate charged for borrowing and is quoted as a percentage.

Minimum Payment

The minimum payment is the least amount cardholders need to pay on a monthly basis to keep their credit cards in good standing. Minimum payments are recalculated, depending on your card’s issuer. Some credit card issuers calculate the minimum payment amount as two or three percent of the outstanding credit card balance. There some issuers that calculate the minimum amount by taking a percentage of the outstanding balance at the end of the billing cycle and adding the monthly finance charges.

CuraDebt, one of the leading debt relief companies in the country, stresses the importance of paying off your credit card balances in full because if you keep using your credit card and continue paying the minimum monthly payment, you may find yourself in a situation where you just keep on paying that monthly payment without actually having any significant decrease in the balance. The payment goes towards the interest. With multiple credit cards to pay, getting caught in this cycle is the perfect setup for a financial disaster.  Do not forget that other fees may be added on top of your minimum payment depending on the transactions you make on your credit card other than a simple purchase.

Credit Card Fees

Aside from using your credit cards to make purchases, you can do other transactions using your plastic such as balance transfers and cash advances. Keep in mind that you will be charged a fee for these transactions. If you use your credit card overseas, then you will be charged with a foreign transaction fee. Late fees are charged when you pay past your monthly due date.

An Important Note

Do You Understand Your Credit Card Agreement?

Did you know that you can avoid paying finance charges if you pay your credit card balance in full? As stated earlier, finance charges are applied by the issuer to the cardholder’s bill for carrying a balance. No outstanding balance means no finance charges. Paying your credit card balance in full, or paying more than the minimum monthly payment is a great way to avoid having huge credit card debts in the future.

Before signing up for a credit card, it is best to read the agreement and have each point explained to you, like how the monthly minimums are calculated and make sure that all fees are outlined in the agreement. Do this even if you already have 5 credit cards under your name. Not all credit cards are created equal so it is best to get a better understanding of you are signing up for to avoid getting caught in those financial disasters simply because you failed to understand something that is in fine print in that credit card agreement that you inked.


Debt Settlement From A Debt Settlement Company

Debt: The Good, The Bad, And The Way Out

Everyone wants to live a debt-free life. Financial problems brought about by having huge debt impacts virtually every aspect of our lives that is why we do everything we can to avoid it. Debt, in its simplest definition, is just borrowed money used for whatever purpose we have in mind. If we look at it this way, debt sounds neither good nor bad. It’s just what it is. And while it is entirely possible to live a life free from the burdens of having a debt, there are times when taking out a loan is the right decision to make.

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Purpose is What Makes The Difference

As stated earlier, debt is defined as money borrowed for an intent one has in mind. This intent is what makes the distinction between a debt good and a bad debt.

They say that “it takes money to make money.” Good debt is money taken out and used as an investment to help generate income. A loan that was taken out and used to kick-start a small business is an example of a good debt. All business owners expect to earn and gain profit that would soon pay for the loan. Student loans can also be viewed as an example of a good debt. Every student sees a “return on investment” once they graduate and enter the workforce in their chosen field. Real estate mortgages, when used strategically, can also be a form of good debt. A residential property can be rented out, thus making it self-amortizing, and once the mortgage is paid off, the property owners can finally start earning from it.

Bad debts, on the other hand, are debts that are used to purchase anything that depreciates in value and do not generate any income for the debtor. These are the liabilities that have to be avoided at all cost. Cars may be a necessity but it is expensive. Unless you have the money to pay for a brand new car in cash, it would be better to put a hold on your plans for signing up for a car loan. Cars depreciate in value every year. In the event that the car owner decides to sell his car, it would be for a much lower price than its original value. Consumer loans such as credit card debts and payday loans are probably the worst kinds of debt. These debts are often used to make ends meet, or to sustain the “wants” of a person. Bad debt doesn’t do any good for parties involved: the debtor loses money in paying the interest alone, and may soon be buried in a mountain of debt, assuming the debtor no longer has the capacity to pay for it. Creditors lose money on bad debts that are no longer collectible.

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The Backup Plan

Taking out a loan is always a risk. A fresh graduate may not find a lucrative career opportunity right away which may lead to struggles in paying off their student loan. Real estate properties may suffer damages brought about by unforeseen circumstances such as fire or natural calamities and will definitely cause a loss of income. Startup businesses may take a while before it generates the expected income. As for bad debts, these could get worse when a debtor lacks financial management skills and is stuck in the dreaded minimum payment loop.

Good debt and bad debt have one thing in common and that is they are both accruing interest. If the debtor hits a financial snag along the way, unpaid debts, along with its ballooning interest rate can be a problem.

It is essential to have a backup plan in case things don’t work out. Having ample savings to cushion one’s fall during hard times is perhaps one of the best backup plans a debtor may have. Savings should be enough to cover basic necessities and loan payments for at least three to six months. For business owners, emergency funds should be enough to cover operating costs and other expenses. This will give any indebted person time to recover and get back their finances back on track much easier than having no savings or emergency funds to count on.

In the event that a debt becomes too much to handle, an indebted person may consider entering a debt relief program. Debt relief programs, as its name states, offers relief to a person whose debt burden becomes too much to bear. These programs may offer either partial or full relief from one’s debt. Most debt relief companies offer a free consultation to their clients to see which program best fits their current financial situation and capacity to pay. Once enrolled in a program, it is best to commit to the agreed plan to have the debt problem resolved, otherwise, noncompliance to the plan may get a debtor kicked out of the program which may lead to even bigger financial problems.

Final Words

Money is best handled with wisdom and discipline, especially if that money is borrowed. Keep in mind that even those considered as good debts may turn into bad debts when handled thoughtlessly. Most of all, debts should be paid off as soon as possible. Do not let yourself get stuck in the minimum payment trap and suffer the consequences later on. Good decision-making along with sound financial management skills will make any debt less of a burden and more of a much-needed help to anyone who needs it.


How To Get Out of Debt

Let’s face it: debt is a way of life for Americans. We place such a high importance on our credit scores and creditworthiness so we could get more loans and obtain more credit. We religiously make minimum monthly payments to our creditors thinking that it’s the right thing to do. We also have this mindset that as long as we maintain a good credit standing, it’s alright to get more loans or apply for more credit cards. It’s okay to swipe the plastic as long as minimum payment is made on a monthly basis. What you don’t realize is that it is turning into a vicious cycle and the next thing you know is that you have fallen into a trap of your own doing.

What do you do then, when you find yourself drowning in debt? How do you get yourself out? There are three things that can be done: change your attitude towards spending, come up with a plan, and commit to the plan.


Debt is not the enemy


Unsecured loans such as credit card debts and personal loans make up a large percentage of anyone’s debt problem.

If there is one thing you need to keep in mind, it’s neither debt nor the exorbitant interest rates and finance charges that go with it that is the problem. It is a person’s irresponsible and unwise spending habit that is to blame. We all know that once we live beyond our means, and it becomes a habit, we are headed for trouble.

Therefore, the first step to getting out of debt is to make a conscious effort to change your attitude towards spending. We’ve all heard about the cliché that we should live within our means. Try this: live below your means. Prioritize your needs over your wants, and do this willingly.


So, what’s the plan?


Now that you have decided to change your attitude towards your spending habits, it is now time to come out with a plan to get yourself out of debt for good.

To help you reach your financial goals, it is best that you keep track of your monthly expenses. Create a budget planner. Allocate a portion of your income for savings so you will have something on hand when a need arises. The rest of your money may be spent on basic necessities and paying off your debts. If your budget tracker shows that your income is not enough to cover your basic needs and your debts at the same time, it is best to consult a professional to see how to best manage your debts without having to jeopardize your necessities.


The solution


Debt relief programs are designed to help solve debt problems without having the need to take out a new loan. When you consider this option, it is best that you get the services of a reputable debt relief agency rather than solving your debt problem on your own. This is for you to be guided accordingly, and to keep you from being enslaved by your creditors. Once you get yourself in a debt relief program, stick to it. Failure to comply could mean you getting kicked out of the program and would cause even bigger problems on your part. Remember, restoring your financial health takes commitment, not a miracle.


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Is Tax Debt Forgiveness Possible?

Owing debt to the IRS or the State is a scary situation to be in. Unlike having an unsettled credit card debt or other forms of unsecured loan, the IRS or the State can impose legal sanctions against you such as wage garnishments, levy assets, and file a tax lien to seize properties until the tax debt that you owe is satisfied.

This is why it is best to have your tax debt issues addressed as soon as possible, regardless of your current financial situation. Fortunately, you may be considered for an IRS debt forgiveness program that can help you with your predicament.

Does this mean that I don’t have to pay my tax debt anymore?

Just like any lender, the IRS will do whatever it takes to collect on what you owe. And just like any debtor, it is your responsibility to pay off your debt, especially if you have the means and the capacity to do so.

The IRS Forgiveness Program offers a resolution for taxpayers who could not pay their tax debt in one go. However, this doesn’t mean that you are no longer liable to pay the IRS and your debt has been zeroed out. Your financial capacity to pay will be assessed to see which program best suits your situation in order to for you to pay off your debt without causing any hardship on your part. In the event that a taxpayer is undergoing extreme financial hardship, the IRS may put a halt on the collection proceedings until they see an improvement in the taxpayer’s situation.

What are my options?

Here are some of the IRS Forgiveness Programs that can help resolve your tax debt woes:

  1. Offer in Compromise (OIC)

An Offer in Compromise is an agreement between you and the IRS that lets you settle your tax debt for a reduced amount.

2. Installment Agreement (IA)

An Installment Agreement lets the taxpayer pays off their tax debt in low monthly installments.

3. Penalty Abatement

Typically for first-time taxpayers, this program is usually tied up with an installment agreement to reduce the interest.

4. Currently-Non-Collectible

This program is for taxpayers undergoing extreme financial hardship. Financial hardship of a taxpayer means they could no longer afford basic living expenses and put a payment towards their existing IRS tax debt. Only a Revenue officer from the IRS can determine whether the taxpayer is indeed experiencing financial hardship or not.

Can I do this alone?

When dealing with tax debt, it is always best to seek the help of an acclaimed tax debt relief organization. Tax issues are complicated, to say the least, and can be very disconcerting to deal with.

Ask for help. Having a professional handle your tax debt is necessary as they are more knowledgeable with regards to tax laws. This is one situation where mistakes are simply unacceptable because it can be very costly and you might end up having more problems than what you already have. Also, take time to research and read reviews regarding the debt relief organization you’ll be working with. Consider the feedback from the company’s former clients and see if the good outweighs the bad.

It is one thing to know that you will not be alone in facing such a daunting problems as a tax debt, but knowing that you will be working with a team that is worth every ounce of your trust will make all the difference.