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(单词翻译:双击或拖选)
By Laura Adams.
In today’s show I’ll share tips for managing debt in our current financial environment.
Dealing1 with Tight Credit
Everyone’s on the edge of their seats about the current credit crisis and the volatile2 financial markets. As the economy has declined, many consumers have been relying on credit sources such as credit cards and home equity3 loans for everyday spending.
But we’ve come to realize that the days of free-flowing credit are over. Banks and lenders are lowering credit limits on credit cards and scrutinizing4 new borrowers under their dusty microscopes. For many, this tight credit market will be the catalyst5 to address financial problems sooner rather than later. If you’ve been living above your means, addicted6 to credit of any kind, consider this podcast your personal financial intervention7!
Face the Debt Music
Debt management is not a one-size-fits-all topic, because every debt-holder is unique. Your debt could be the result of many different circumstances such as overspending, job loss, or medical bills. You have to gauge8 your own situation and face up to your ability or inability to help yourself.
Bankruptcy9
If you’re seriously drowning in debt, the worst case scenario10 is to declare bankruptcy. This is the debt management option of last resort. Because a bankruptcy can stay on your credit report for up to ten years it will affect many aspects of your life for a long time. If you’re considering this option, you’ll need to consult a bankruptcy attorney for help with some tough decisions. Next week, I'll explore bankruptcy and foreclosures more thoroughly11.
Credit Counselors13
Anyone who intends to declare bankruptcy must get pre-filing credit counseling from an approved agency within six months before the filing. The agency must be approved by the U.S. Department of Justice in the judicial14 district where you plan to file bankruptcy. You must also complete a pre-discharge education course in order for debts to be officially satisfied.
If you have a debt problem that’s gotten out of control, you should also contact a credit counselor12. You’ll want to seek out a nonprofit credit counseling agency that gets most of their funding from your creditors16, not from you. They may require nominal17 fees, but won’t try to sell you anything. Make sure to choose a company that’s accredited18 with an industry agency such as the National Foundation for Credit Counseling (NFCC) or the Association of Independent Consumer Credit Counseling Agencies (AICCCA).
A good credit counseling agency should be open-minded to every option you have to improve your financial situation. They should help you create a budget and offer free educational resources. Try to meet with them in person if possible.
Debt Negotiation19 Firms
The debt negotiation industry is growing rapidly. These companies are not low-fee, non-profit counselors, but representatives who aggressively work with your creditors. Many claim to be able to reduce debts by 50% or more. Be careful when dealing with these companies, as there have been some publicized scams. Look for one that is certified20 by the International Association of Professional Debt Arbitrators and review fee schedules and contracts closely.
Debt Management Plans (DMPs)
You may be eligible21 to enroll22 in a debt management plan or DMP. These are also called one-pay plans, because the agency collects one monthly payment from you. They distribute the money to your creditors after negotiating lower payments on your behalf. If you enroll in a DMP, protect yourself by confirming the plan directly with your creditors. Don’t send any payments to a counseling agency or a debt negotiation firm until you know the plan is legit. I’ll put a link in the show notes to some facts about DMPs from the Federal Trade Commission.
Debt Consolidation23
Debt consolidation entails24 paying off one debt with another debt. This may make sense if you can get a lower interest rate or even a discount on the principal amount of the loan. Loan consolidation may help alleviate25 pressure with lower monthly payments. But if lower payments are achieved by simply extending the terms of the loan, your underlying26 debt has not been reduced.
Debt Settlement
Debt settlement is another option if you have cash to offer. You or your attorney can contact your creditor15 in writing to offer a final cash settlement by a certain date. This is an effective strategy that could result in a deep discount on the debt. Also, be aware that the IRS considers forgiven debt as income subject to normal income tax.
Correct Bad Habits
In the best case debt scenario, you’re credit rating is still good, but you’re simply living above your means (you know who you are!). Debt is usually the symptom of saving too little and spending too much, a deadly combination. Don’t shoot the Money Girl messenger… but there is no magic formula to make debt disappear. The solution is to permanently27 change your financial behavior by becoming more disciplined with your money. Is it easy? Absolutely not. But the rewards of living life without a credit addiction28 include much less stress and better sleep.
So, the bottom line on eliminating debt and practicing good money management is what you probably already knew, but needed to hear: Spend less than you make or make more than you spend. Then pay the difference to your debts on a regular basis.
Administrative29
Send any questions or comments to........... If you’re not currently subscribed30 to the podcast feed, I recommend doing so through iTunes. It’s free and certainly the most convenient way to get each new show as soon as it’s released. I'm glad you're listening.
Chi-Ching, that's all for now, courtesy of Money Girl, your guide to a richer life.
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1
dealing
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| n.经商方法，待人态度 | |
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volatile
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| adj.反复无常的，挥发性的，稍纵即逝的，脾气火爆的；n.挥发性物质 | |
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equity
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| n.公正，公平，（无固定利息的）股票 | |
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scrutinizing
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| v.仔细检查，详审( scrutinize的现在分词 ) | |
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catalyst
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| n.催化剂，造成变化的人或事 | |
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addicted
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| adj.沉溺于....的，对...上瘾的 | |
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intervention
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| n.介入，干涉，干预 | |
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gauge
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| v.精确计量；估计；n.标准度量；计量器 | |
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bankruptcy
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| n.破产；无偿付能力 | |
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scenario
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| n.剧本，脚本；概要 | |
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thoroughly
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| adv.完全地，彻底地，十足地 | |
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counselor
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| n.顾问，法律顾问 | |
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counselors
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| n.顾问( counselor的名词复数 )；律师；（使馆等的）参赞；（协助学生解决问题的）指导老师 | |
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judicial
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| adj.司法的，法庭的，审判的，明断的，公正的 | |
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creditor
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| n.债仅人，债主，贷方 | |
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creditors
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| n.债权人，债主( creditor的名词复数 ) | |
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nominal
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| adj.名义上的；(金额、租金)微不足道的 | |
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accredited
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| adj.可接受的；可信任的；公认的；质量合格的v.相信( accredit的过去式和过去分词 )；委托；委任；把…归结于 | |
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negotiation
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| n.谈判，协商 | |
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certified
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| a.经证明合格的；具有证明文件的 | |
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eligible
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| adj.有条件被选中的；(尤指婚姻等)合适(意)的 | |
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enroll
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| v.招收；登记；入学；参军；成为会员（英)enrol | |
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consolidation
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| n.合并,巩固 | |
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entails
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| 使…成为必要( entail的第三人称单数 )； 需要； 限定继承； 使必需 | |
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alleviate
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| v.减轻，缓和，缓解(痛苦等) | |
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underlying
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| adj.在下面的，含蓄的，潜在的 | |
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permanently
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| adv.永恒地，永久地，固定不变地 | |
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addiction
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| n.上瘾入迷，嗜好 | |
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administrative
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| adj.行政的，管理的 | |
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subscribed
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| v.捐助( subscribe的过去式和过去分词 )；签署，题词；订阅；同意 | |
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