Reduce Debt, Reduce Stress with Gerri Detweiler

Last night I interviewed Gerri Detweiler, Ultimate Credit on Reduce Debt, Reduce Stress. WOW! Gerri's a wealth of knowledge. I've never been comfortable referring people to credit counseling organizations. Did you know that the Department of Justice maintains a list of credit counseling organizations? Visit www.justice.gov and search Credit Counseling Agencies. According to Gerri the first consultation with a credit counseling agency does not affect your credit score and it's usually free.

If you're struggling with debt use this simple calculation to determine if you can pay it off without help. Begin by totaling your minimum credit card payment on all your credit cards. Let's say you owe $1,000 per month on 5 credit cards -- multiply $1,000 by 20% = $1,200. If you have $1,200 available each month you should be able to pay your credit card debt off in 3 - 5 years. According to Gerri, the next step is to pay the minimum payment on all accounts except the account with the highest interest rate. Pay all the remaining money on that account until it's paid off. Move to the next account. This is called snowball method. Check out www.zilchworks.com -- an online calculator recommended by Gerri Detweiler. They offer a free trial service.

I was astounded when Gerri explained that if you reach a settlement agreement and the credit card company writes off $600 or more, they must send you a 1099 to show the amount written off as income. Let's say your outstanding debt is $100,000; you pay $50,000 and the company writes off $50,000, you'll receive a 1099 for $50,000 income. There's an exception, but Gerri's advice -- consult with a tax professional when you are going through the process.

If you want to learn more from Gerri Detweiler on Reduce Debt, Reduce Stress listen to my interview with her online at www.moneywisewomengetsmart.com. The MP3 download will be posted by March 12, 2010.

Visit Gerri's websites at www.reducedebtreducestress.com , www.debtcollectionanswers.com and www.ultimatecredit.com .

Warmly,

Marcia Brixey

Comments

[ADELINE18Mcconnell]

I took my first loan when I was a teenager and this supported my family very much. However, I need the financial loan also.

[ChristineWithRegence]

Want to get ideas for how you can take charge of your own health care costs? Check out Whatstherealcost.org.

[Betsy DeMatteo, Ohio State University Extension]

Thanks for sharing this info!

Another site that helps you calculate how to use the "Snowball" or "Power Payment" method to get out of debt is www.powerpay.org. You create your own accounty on the site and it is completely free (instead of a free trial). It has been developed by Utah State University Extension.

I also recomend the publication "In Over Your Head", which just came out this year from Ohio State University Extension. It's free online at http://ohioline.osu.edu/b891/b891-2009.pdf
It walks you through how to get free of debt, and it is particularly relevant for families struggling with job loss.