Getting Out of Debt For Dummies (For Dummies (Business & Personal Finance))

Get out and stay out of debt the smart and easy way This is a clear and simple guide to getting out from under credit card debt, student loan debt, and all other forms of owing people money. With simple changes and smart decisions, you can start today and enjoy financial stability moving forward. This book covers everything you need to know to take the sting out of those monthly repayments, offering strategies for coping with personal loans, car loans, mortgages, home equity loans, and beyond. Getting Out of Debt For Dummies will help you prioritize and consolidate debt, so you can pay off the most pressing bills first and reduce the number of debtors coming after you. You'll also get pro tips for using credit cards responsibly, building up your credit score, and avoiding debt-generating traps when you make purchases. Getting out of debt doesn't have to be overwhelming. Let this Dummies guide help you quickly and easily repair your finances. • Understand the different types of debt, including good and bad debt • Develop a strategy for managing student loans and getting on a repayment plan • Know what you're signing up for when you use credit cards and pay-later platforms • Negotiate with collection agencies, the IRS, and angry creditors • Design a realistic and painless payback schedule―even for serious debt For the millions who have substantial debt and want to turn their financial situation around, Getting Out of Debt For Dummies offers hope and a straightforward way forward. Title Page Copyright Page Table of Contents Introduction About This Book Foolish Assumptions Icons Used in the Book Beyond the Book Where to Go from Here Part 1 Getting Started with Getting Out of Debt Chapter 1 Eliminating Debt: The Basics Looking at the Different Types of Debt Student loans Credit cards Home and auto loans Home loans Auto loans Miscellaneous debt Government agencies Court-ordered debt Overdue bills turned over to collection agencies Medical bills Personal loans Loans from friends or family Paying Off Your Debt Compiling a list of your debt Considering different payoff methods The snowball method The avalanche method The fireball method Applying additional strategies Make a debt payoff settlement Negotiate with creditors Ask about hardship programs Use balance transfers Make extra payments Use financial windfalls Avoiding Accumulating More Debt Look into refinancing options Save an emergency fund Say no to credit card offers Invest in the right insurance Chapter 2 Facing Financial Facts Answering Some Questions Evaluating Your Relationship with Money Equating stuff with success Recognizing emotional spending Living for the moment Taking Inventory of Your Finances: A Spending Analysis Make a list of your financial assets and liabilities Assets Liabilities Record-keeping systems Review your spending for the past three months Chapter 3 Breaking Down the Parts of a Budget Seeing Where Your Money Goes: Your Expenses Identifying fixed expenses Allowing for variable expenses Needs and wants Value-based spending Knowing Where Your Money Comes From: Your Income Depending on a monthly income Identifying additional sources of income You Gotta Have Dreams: Financial Goals Saving for your future Paying down your debt Putting your financial goals in place Chapter 4 Creating a New Budget Introducing a Few Budgeting Methods Determining Your Budget Categories Planning ahead for the month Reflecting on fixed and variable spending Compiling a list of budget categories Using the Right Tools Tracking your money with budgeting software Looking at budgeting apps Picking the right app for you Taking the DIY approach Taking advantage of your accounts’ resources Practicing Makes Perfect Revisit your budget Create a cash buffer Look for ways to make your system easier to follow Chapter 5 Spending Less and Saving More Containing Housing Costs Reducing rental costs Share a rental with roommates Move to a lower-cost rental Negotiate your rental increases Live with relatives Get on the path to purchasing your own home Slicing homeowner expenses Buy a home that fits your budget Get a roommate (and some rental income) Contain your utility costs Cutting Your Taxes Managing Food and Restaurant Spending Trimming Transportation Expenses Finessing Fashion Finances Relaxing on a Budget Taming Technology Spending Keeping Down Insurance Costs Getting Affordable and Quality Professional Advice Handling Healthcare Expenses Part 2 Making Sense of Credit Reporting and Scoring Chapter 6 Discovering How Credit Reporting Works Grasping the Importance of Your Credit Report What Is a Credit Report, Exactly? Revealing the facts about your financial transactions Personal identification information Public record information Collection activity Information about each credit account (or trade line), whether open or closed A list of companies that have requested your credit file for the purpose of granting credit An optional message or ten from you Maybe your utility, telecom, and rent payments Knowing what’s not in a credit report Providing insight into your character The Negatives and Positives of Credit Reporting The negatives The positives Your Credit Report’s Numerical Offspring: The Credit Score Cracking credit score components What makes up a FICO score? What makes up a VantageScore? The reasoning behind risk factors Chapter 7 Understanding Credit Reports and Scores Getting Copies of Your Credit Reports Where to get your reports What you need to provide When to get copies of your credit reports Perusing Your Credit Reports Identifying information: It’s all about who you are Accounts summary: An overview of your financial history Bankruptcy public records: The most serious element in a credit report Credit inquiries: Tracking who has been accessing your file Account history: Think of it as a payment CSI Equifax’s version Experian’s version TransUnion’s version Your optional dispute statements: Making sure your voice is heard Correcting Any Errors You Find Contacting the credit bureau Contacting the creditor Getting and Understanding Your Credit Scores Ordering your score Telling a good score from a bad one Connecting pricing to your credit score Knowing the reason for reason statements Chapter 8 Monitoring Your Credit Reports and Scores Getting a Handle on How Credit Monitoring Really Works Understanding the Types of Monitoring Services Available Making a Case for and against Third-Party Credit Monitoring Monitoring on your own Knowing when to use paid monitoring Recognizing the protection you have already Getting Your Money’s Worth from Monitoring Services Setting Alarms, Alerts, and Freezes Alarms Fraud alerts Credit freezes Part 3 Taking Action on High Debt and Bad Credit Chapter 9 Getting the Best Help for Bad Credit for Free Knowing Whether You Need Help Gauging your need for outside assistance Handling situations on your own Credit cards Mortgages Student loans Identifying Help You Can Get for Free Getting help with your mortgage Considering credit counseling Recognizing debts that credit counseling can help with Knowing what a credit counseling agency can offer you Finding a great credit counseling agency Deciding on debt management plans Working with an attorney Chapter 10 Coping with Debt Collection Handling Those Collection Phone Calls Knowing what collectors can do Knowing what collectors can’t do Deciding whether to answer the phone Preparing to answer collection calls Knowing what not to say Taking Charge of the Collection Process Asking for proof that the debt is yours Knowing when debts fade away: Statutes of limitations Negotiating a payback arrangement Keeping your promise Identifying Escalation Options That Help Asking to speak to a manager Approaching the creditor Fighting harassment Communicating with Customer Service Before Collection Starts Contacting your creditor promptly Explaining your situation Offering a solution Covering all the bases Keeping Collectors in Check Calling in a credit counselor Referring the matter to your lawyer Freeing Up Money to Pay a Collector Utilizing a spending plan Cutting the fat from your monthly spending Avoiding Collectors Altogether Getting organized Stopping the paycheck-to- paycheck cycle Chapter 11 Reducing Credit Damage in a Crisis Assessing the Damage from a Mortgage Meltdown Understanding How Mortgages Differ from Other Loans Spotting a foreclosure on the horizon Counting to 90 Knowing Where to Turn for Help with Your Mortgage Finding good help for free Working with your mortgage servicer Avoiding help that hurts Considering Alternatives to Going Down with the Ship What to do first What to do for more serious problems What to do to end matters Managing a foreclosure Strategic default: Stopping payments Dealing with Deficiencies Preparing for “Credit Winter” Curing Medical Debt Understanding reporting and scoring rules Reviewing your options for paying medical bills Discovering how insurers get your medical information Monitoring insurance claims for errors Dealing with denied medical claims Managing Student Loans Default timelines Loan forgiveness programs Where to get help Avoiding Car Repossession Repossession: What you can do Dealing with auto loan default deficiencies Coping with So-Called Acts of God and Other Things That Aren’t Your Fault Part 4 Successfully Managing Your Debt and Credit for Life Chapter 12 Starting or Restarting Your Credit in Real Life Debunking Misinformation about Banking and Credit Why you need credit Why credit is safe Obtaining Credit: Starting Out on the Right Foot Establishing a credit file without a Social Security number Setting goals before you set out Establishing a relationship with a financial institution Why you need to save How to get started saving Using prepaid and reloadable cards Fattening up your credit file Continue using your foreign credit card if you have one Ask that an alternative score be used to score your application for credit Take out a passbook loan Get a secured credit card Avoiding high interest, fees, and scams Payday loans Refund anticipation loans (RALs) Check-cashing for a high fee Instant credit rating Foreign bank accounts Overcoming Credit Fears and Mistakes Qualifying for First-Time Cards and Lending Getting a credit card Using other people’s credit Supplying your own data Using secured cards Using savings for credit Chapter 13 Putting Yourself in Control of Your Credit Determining Your Credit Style Transactors Revolvers Other types Balancing Spending, Savings, and Credit Use Spending on your terms Saving for emergencies Using credit to enhance your life Remembering the Importance of Planning Zeroing in on the plans others have for your money Developing your own plans Part 5 The Part of Tens Chapter 14 Ten Debt Don’ts Ignoring Your Debts Falling Behind on Car Payments Managing Money Without a Budget Paying Creditors Just Because They’re Aggressive Making Promises That You Can’t Keep Continuing to Use Credit Cards Borrowing Against Your Home Working with a For-Profit Credit Counseling Agency Getting a High-Risk Loan Asking a Friend or Relative to Cosign a Loan Chapter 15 Ten Ways to Deal with a Mortgage Meltdown Knowing When You’re in Trouble Knowing How Your State’s Laws Treat Foreclosures Nonrecourse or recourse Judicial or nonjudicial Deciding Whether to Stay or Go Walking away Working with the lender to exit Staying the course Tightening Your Spending to Stay in Your Home Prioritizing Your Spending to Build Cash Lessening the Damage to Your Credit Knowing Who to Call Beware of Scams Beefing Up Your Credit Consulting an Attorney Chapter 16 Ten Strategies for Dealing with Student Loans Knowing How Student Loans Are Reported Dealing with the Collection Process Identifying the Best Repayment Option for Your Situation Taking Your Loans to Bankruptcy Dealing with the Prospect of Default Gaining Student Loan Forgiveness Lowering Your Bill While You’re in School Keeping Up with Your Loans After You’re Out Setting Limits During the Application Process Getting Help If You’re in the Military Index EULA