Posts tagged "debt relief"

Americans have been suffering through a struggling economy and have been looking for ways to seek debt relief for a several years. Here's a sign of how things have changed: The average citizen in Canada now has a net worth larger than the average American, even though Canada has also been dealing with a fairly high national unemployment rate.

According to recently released data, Americans typically have a net worth of about $319,000, while Canadians have a net worth of about $363,000. America's 8.2 percent unemployment rate certainly doesn't help. (Canada currently has an unemployment rate of 7.2 percent.)

There are many homeowners in recent years who have lost their homes through foreclosure when they've fallen behind on their mortgage payments, or because of federal tax liens over significant amounts of income tax owed to the IRS. In what some are calling a second foreclosure crisis, some homeowners are losing their residences because of tiny state or local tax debts, sometimes amounting only to a few hundred dollars.

Many states have antiquated laws that provide for state or local government to quickly collect overdue property taxes or even more minor fees for sewer and water services by selling investors' tax liens on a homeowner's property. These investors, after paying the amount owed to the state or local government, then have a claim on the home. The homeowner is expected to pay interest on the debt to the investor. If they neglect to pay the interest or the principal owed, the investor in some cases can ultimately foreclose on the property and take possession of it.

Financial planners and doting parents often dole out similar advice: "Be sure to save enough money for emergencies." New data out, however, shows that many Americans aren't taking - or perhaps can't take - this advice to heart.

As Americans struggle with debt and file for bankruptcy, saving money might seem like an unattainable goal. Indeed, according to recently released researched, 28 percent of Americans have no emergency savings.

The troubled economy has increasingly made homeownership out of reach for many in the U.S., especially young families. Those who do own homes often fall behind on house payments in the event of a job loss or major illness, especially if they lack health insurance, leaving them exposed to the possibility of foreclosure.

High unemployment has caused many young people to delay getting married, starting a family with children, beginning careers, or starting to save to build up the funds needed for a down payment. For a large number, homeownership is not even thought of as in the realm of possibility anymore.

It seems that every time you buy something at the store, the cashier asks if you would like to apply for a retailer credit card. It can be hard to know which cards offer good perks and which end up being costly. Some of them offer opportunities to save, which in the long run could help some consumers with debt relief.

Let's take a look at some of the major types of retailer credit cards. You might be surprised at how many differences there can be between them.

In the best of housing market times, the pre-recession era of 2005, less than 1 percent of all homes sold were properties in foreclosure. At the other end of the spectrum, in the first quarter of 2009, 45 percent of all home sales were foreclosed homes.

Over a quarter of the more than 233,000 homes sold during the first quarter of 2012 were homes in the foreclosure process or already repossessed by mortgage lenders, according to RealtyTrac. Compared to the height of the economic collapse, a 26 percent foreclosure sales rate might seem like a tremendous improvement.

Back in the first quarter of 2010, the percentage of home loans at least 30 days late peaked at 10.1 percent. The rebound has been slow, but the numbers have trended downward. For the first quarter of this year, the number dropped to 7.4 percent from 7.58 percent in the previous quarter, according to new reports.

That's a promising sign that the economy is brightening. That means those who have faced debt problems have a little more money in their pocket to pay their bills. The delinquency rate is the lowest since 2008, when had been just under 7 percent.

Data compiled by the credit reporting agency Equifax Inc. reported that consumers in the U.S. currently shoulder the burden of approximately $10.9 trillion in debt. This was the amount recorded as of the end of March. Many are having difficulties with debt management, although consumer activity is up, which is a positive sign. The total accumulated debt is down approximately 11 percent from the $12.4 trillion high recorded in October 2008.

Loans entered into between the years 2005 and 2007 currently comprise a huge 72 percent of all loan delinquencies, even though the total debt involved is only 36 percent of outstanding loan balances. A mere 12.6 percent of accounts reported as delinquent by creditors stem from loans or lines of credit commenced in 2009 or the following period to the present.

Many consumers experiencing debt problems in today's troubled economy may find those problems heightened if they succumb to making common mistakes with their credit cards. Such errors can damage credit ratings, be an expensive detour, and lead to time-wasting aggravation. Fox Business has a good overview of the most common mistakes. Here are a few of them.

• Paying a credit card bill late. Some credit card companies regard even barely late payments the same way they would grossly overdue bills. Such payment practices can lead to penalties and cause interest rates on an account to increase, and sometimes even double. The biggest impact may be on the consumer's credit score, as the timeliness of paying off credit card debt accounts for over a third of the calculation of those scores.