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April 2019

Info of Debt Counseling

The law states that clients who are no longer able to meet their debt obligations should choose debt counselling before any legal actions are filed against them. Also, see to it that you learn about the benefits and drawbacks of this service.

Once you choose debt counselling, your creditors will be notified by your debt counselor. This is an advantage on your part since you will be able to show your creditors that you are sincere about changing as well as serious about your predicament. Also, your debt counselor will help you organize your finances by merging all your existing loans into a single file. This will allow you to make only a single repayment per month. Your creditors, in turn, will send your payment to your creditors.

Your repayments are going to be restructured for any outstanding debts; but your debt counselor will still set aside a fair amount for your food, transport, and other necessities. Until you are under debt review, you will not be subjected to legal charges for non-repayment of debt. In addition, there is a good chance that your credit ratings will improve once you choose debt counselling.

This service also typically involves engaging in negotiations with creditors to set up a debt management plan for the client. This plan may help you have reduced interest rates, fees, and payments. Moreover, your debt counselor will help you avoid stressful situations such as having to deal with your creditors. Instead of answering calls or sending payments yourself, your debt counselor will do these things for you. He will even be the one to make clarifications with your creditors.

Keep in mind that although debt counselling offers plenty of benefits, it also has several drawbacks. Fees, for instance, are inevitable. Even if you choose a non-profit company, you will still have to pay a fee. Nothing is completely free since the company still needs to pay their employees, get legal requirements done, and file paperwork to stay in business. Also, you have to be very careful when choosing a debt counselling company. Choose one that will have your best interest at heart.

Many debt counseling companies are either funded by creditors or are in close ties with creditors; and even though your credit status can improve in the future, being under debt review can also hurt your credit score. Your credit score may go down because your creditors will tell the credit bureaus that a debt counsellor is handling your trade lines. You will also not be able to use your credit card and your accounts will be frozen. You will not even be allowed to apply for new credit or credit extension.

Grabbing Success From Debt

When I got my first credit card, I was so excited that I wanted to pay everything that I need through it though I have cash. I seemed to be able to handle things at first but after few months I lost control of my spending. I have been spending beyond my earnings. Since I was very busy during those days, I was not able to check my credit score. It was so bad that after about a year my credit score has gone low.

I started to hold things up. I began to live a very simple life trying not to spend a penny a day but it still didn’t work. I needed to ask for help. I started to look for solutions online and it seemed that I get no answers from forums and other group discussions until I decided to search for possible credit counselor or credit counseling service in my area. I was so happy that they were able to help me even though I was not talking to them in person. They helped me through the process online and everything seemed to work like magic.

My credit counselors worked with me in creating a working debt management plan and they also negotiated with the creditors to ensure that I could really pay on time and that I would not be paying the compounded rate that I was supposed to pay. The main thing that must be checked out when looking for a reliable credit counselor is to look for some companies or organizations that have good reviews and have been known for the services that they offer. They may be a bit expensive at times but they are worth the price.

Consequently, everything that failed should be a lesson learned and never go back to the same experience again. Experiences of other people can be a good guiding lesson that we must follow. Had I read about handling credit cards wisely before, I may not fall into this problem. But anyhow, I really learned a lot from it and I wanted to share the same experience that more people may avoid what had happened to me. Furthermore, I would just like to say that seeking help from credit counseling service really works most of the time!

Wisdom of Warren Buffett

During the 2008-2009 stock market crash, when the nation was in a total panic, he invested $5 billion with Goldman Sachs and got a terrific deal. According to “What Buffett deal says about Goldman Sachs”, 3-28-2013 Forbes, Buffett agreed to give Goldman $5 billion in late September 2008. In return, Goldman handed over $5 billion in preferred shares and a warrant that would allow Buffett to purchase an additional $5 billion shares at a price of $115, even though the shares were trading at $125 at the time, so in the money from the beginning.

For the preferreds, Goldman agreed to pay Berkshire a yearly 10 percent dividend, with option of buying back the stock at any time for 10 percent more than what Berkshire had paid, which Goldman did in April, 2011 for $5.5 billion. Linus Wilson, a finance professor at the University of Louisiana at Lafayette, who has looked at the Goldman deal, puts the dividends at $1.3 billion. So that gives Berkshire a total return of $1.8 billion on the preferreds.

Now come the warrants. In the deal struck on Tuesday, Buffett’s firm won’t have to put up the $5 billion to buy the 43.5 million shares it has a right to purchase, which would be worth $6.4 billion today. Instead, Goldman is going to give Buffett the difference in stock at the time of the deal. Buffett’s return is the same, but he’s left with a much smaller stake in Goldman. All told, that means Buffett is walking away with a $3.2 billion profit on his four-and-a-half-year-old investment in Goldman, for a return of 64 percent. A classic value investor move. Swoop in when others are selling, and pick up dollars for pennies. Buffett’s legend is secure.

The investing public might need Buffett to remind them to “Be Fearful When Others are Greedy”. In a September, 19, 2013 interview on CNBC, Buffett said that “Stocks are more or less fairly priced now. “We don’t find bargains around but we don’t think things are way overvalued either. We’re having a hard time finding things to buy.”

The stock market reached its low around March 9, 2009, and it’s been more or less a booming market for almost five years. However, January 2014 saw the Dow-Jones stock market index dropped 5.3 percent and the S&P 500 slid 3.6 percent, their worst monthly percentage declines since May 2012. “When the first month of the year is negative, the chances of finishing the full year in the plus column drop to roughly 50-50, according to the Stock Trader’s Almanac (Source: “S&P 500 ends January with a loss: Bad 2014 Omen?” by Adam Shell and Kim Hjelmgaard, found in 1-31-2014 USA Today).