A press release from Think Money, a leading financial solutions company, looks at ways to enjoy Christmas on a tight budget but warns that things may still be tough for people with existing debts.  One of the solutions available on the Think Money website is a debt consolidation loan that consolidates unsecured debts into one lower monthly payment, making debts more affordable and simpler to manage.

If you’re so worried about your finances that you’re considering cancelling Christmas this year it may be worth talking to a debt adviser. You may find that having a solution in place means you’re able to enjoy Christmas after all – and have peace of mind that your finances are back on track.

Are You Cancelling Christmas? is a post from: Thistle Debt Consolidation

The biggest advantage of these loans is that you will only have one payment per month instead of several payments to various creditors. It will give you control over your finances and help you to plan better for the future.

If you opt for consolidation loans, your creditors could freeze charges and interest on your outstanding debt because they know that they will now get a definite and regular payment from you.

If any of your creditors considered legal action, this might convince them to stop. Legal action is the last thing you want because you don’t know how this will affect your credit rating.

Peace of mind and restful nights – that is what you will have if you are not constantly contacted by your creditors. They are, however, not obligated to accept the plan and may still ask for the outstanding money but mostly this is not the case.

Do remember though that a consolidation loan does not mean that the debt is written off, as it is still your debt and will have to be paid in full. Unfortunately, secured debts such as mortgage loans are not covered by debt management plans.

Lending criteria differ from lender to lender, so check and see what the requirements are at the bank or other institution where you are applying for a loan.

Income: The creditor will need to know that you can repay the loan, so you will have to prove that you have a regular and stable income with which to pay the loan.

Payment history: Have you paid your debts in the past on time? Late payments, sometimes only once or twice, can prevent you from qualifying for loans, or you will be given a higher interest rate.

Stability: Do you move around a lot or have you stayed in the same place for at least two years? Do you own a home? This will be seen as a stabilizing factor in your life.

Equity: It is difficult to lend money, especially large sums, to someone with no security or collateral. If you own property and can put that up as collateral, you should not have a problem.

Home ownership: If you own a home and you renege on your payments, the lender can always foreclose on your home and sell it. This way they will get their money back.

Make sure that you can afford the monthly repayments suggested and that you are happy with the terms of the loans suggested. What will happen if you miss a payment?

Keep the following in mind. What will happen if you used your home as collateral and you can’t keep up with the payments? Are there costs involved, e.g. penalties if you want to pay off the loan early?

Put your mind at ease and determine exactly for how long you will be paying and how much you will be paying back in total. Also, make sure if the interest rate is fixed or not.

How Can A Loan Help You Out Of Debt? is a post from: Thistle Debt Consolidation

Firstly, it can be a good idea to work out a budget. Many people find that they build up significant debts without even realising it, simply because they have not been keeping track of what they spend. However, by working out what you can afford to spend in various areas of your life, this is far less likely to happen You may also find that you are spending much more than you realise on certain items, and may want to make the effort to cut back.

Think carefully about taking out any loans, or agreeing to certain repayment strategies. Use sites like lovemoney.com to make sure that you sign up to use the most suitable credit cards for you, and never count your chickens before they’ve hatched. For example, you should avoid making purchases which don’t require payment until a year later, if you are assuming that you will have the money by then for one reason or another. Often it is better to simply wait until you have the available balance in your account, and then pay for your purchases immediately.

It is also important to remember to save. Even if your budget takes up almost all of your current income, it is always a good idea to save at least a small amount each month. The smallest of savings soon add up, and can provide a useful source of emergency money in unexpected financial circumstances. By following these simply steps, you can help to minimise the risk of future debts.

How To Minimise Future Debts is a post from: Thistle Debt Consolidation

Standing at $12.1 trillion, the nation’s current debt ceiling will be pierced yet again. For those who don’t know, the debt ceiling is the cap on how much the country will allow itself to have in debt. You could look at it like a credit limit on a credit card. At the end of August, the national debt had reached $11.8 trillion, just $349 billion short of the current cap.

This debt ceiling is meant to curtail spending and serves as a big warning sign to legislators. It will be a serious undertaking to approve another change in the current ceiling. Yet, the facts are clear: Congressional members really don’t have a choice but to raise the ceiling.

Essentially, if they do nothing, the country would technically go into default on its debt. A ridiculous prospect but serious nonetheless since the ripples from such an event would cascaded through the economy.

In such a scenario, Treasury bonds would become due but the Treasure would be unable to borrow more money to repay the holders of those securities. Of course, the government could find additional funds to head off the default by borrowing money from sources like the federal employee retirement trust fund.

Already, the Treasury Department has been quick to post statements that it will do what it can to preserve the flexibility of national debt management. This may mean cutting back on those funds deposited in the financial rescue reserve so the money could be made available in case the ceiling isn’t raised in time. Still, such measures provide only temporary relief.

Though it is almost certain that legislators will throw support behind an additional increase, it is also clear that the issue itself is going to be a focus for controversy in both the House and the Senate. It is possible that the debate may be mired with the current struggle over health care reform.

Are Dads Getting The Recognition They Deserve? is a post from: Thistle Debt Consolidation

The banks have not been sympathetic to their plight either, and the variety of programs designed to keep consumers in their homes have been developed due to government push-backs for the most part.

Recently, Citigroup announced a new program called “Foreclosure Alternatives”. The program will be rolled out in Florida, Illinois, Michigan, Texas, New Jersey, and Ohio.  In basic terms, the program allows homeowners who are close to foreclosure remain in their homes. In order to be allowed to do so, the homeowners must turn the property deed over to the bank.

The initial phase of the program is expected to include 1,000 homeowners. Though this barely makes a dent in the foreclosure problem, if the first participants are successful, the “Foreclosure Alternatives” program could be expanded to most other states.

The choice of names for the program is somewhat interesting because the homeowner does lose the house. At the end of the six months, consumers must move out of the houses. But instead of a foreclosure and an eviction, a deed-in-lieu-of foreclosure transaction is completed. So despite losing the house, the homeowner does not have a foreclosure on their credit record which will help the credit score.

One of the driving forces behind this program is the number of people who are purposely choosing to default on their mortgages. This is a problem that was anticipated in light of the number of houses that have a market value less than the mortgage balance. For many consumers, it is easier to walk away from an “underwater” house rather than make payments.  Despite the negative credit mark a mortgage default leaves on the credit record, it is currently a better choice financially in the long run when it would clearly be years and perhaps decades before the house value once again equals the mortgage value.

Though Citigroup is offering the program as a benefit to consumers, it is the bank that really comes out ahead. The bank gets the deed to the house and has 6 months to decide what to do about the bank asset. In the meantime the homeowners continue to take care of the house and must pay their own utility bills. There are millions of foreclosed homes sitting empty today making them vulnerable to vandalism and deterioration.

Citigroup program participant will also get $1,000 for relocation expenses.

This program was inspired by the Fannie Mae rental program. Homeowners, in effect, rent their houses for 6 months after turning the deed over to the lender. It is interesting to note that the transfer of underwater home deeds to the lender does not address the looming problem of what to do about the toxic assets on bank balance sheets.

In a resale of these homes, it is quite likely the bank will have to sell the house for less than the current mortgage value. It makes one wonder why they don’t let the current owners get the benefit of the write downs rather than taking the houses back. Many homeowners could afford a lower mortgage payment but do not qualify for the mortgage modification programs.

Citigroup Starts The ‘Foreclosure Alternatives’ Program is a post from: Thistle Debt Consolidation

Every year, thousands of people let a particular preparer do their taxes based on the promise they will either get a large refund or some other magical result like not owing any taxes. There is no way a tax preparer can know before completing tax forms whether the tax filer will get a refund. But the lure of a tax refund when money is tight is enough for some filers.

The Internal Revenue Service (IRS) is planning on regulating tax preparers by the start of the next tax season. Currently each state determines the rules and regulations for tax preparers in terms of licensing and training requirements. That is going to change soon.

In some states like Alabama there are virtually no rules as to who is allowed to prepare tax forms for consumers. That means anyone can offer to complete them whether or not he or she has had any training. Beginning with the next tax season in 2011, tax preparers must be registered with the government and pass competency tests.

The purpose of the regulations is control the tax preparation industry to reduce the number of errors and cases of fraud. Requiring preparers to take competency tests will help insure consumers are getting ethical and knowledgeable service. The US tax code is made up of thousands of pages and is so complex that even IRS agents have trouble answering questions consistently.

The goal is to have all the tax preparers registered before the January 1, 2012 tax filing season starts. Almost 80% of consumers use a paid tax preparer or they use tax software that fills out forms automatically based on the information entered into the program. The current estimate is that up to 1.4 million people are charging fees to provide tax preparation services.

The attorneys, accountants, and tax preparers already enrolled with the government will not see any new requirements. They are already regulated by the professions to which they belong meaning there is currently oversight of their activities. The tax preparers that will be affected are the people who simply decide to prepare returns to earn some money.

Consumers need to be careful who they turn to for tax form preparation. The taxpayer is ultimately responsible for the information on the tax return. The IRS charges interest and penalties on tax amounts due resulting from fraud or errors so mistakes can be quite costly. And there are plenty of errors made on returns. The IRS plans on sending out 10,000 notices to tax preparers that make frequent mistakes.

It is important to use people who have tax preparation training when it’s time to do your tax return. Tax preparers that will sign your return as the preparer take responsibility for the accuracy of the information. The last thing a consumer needs who are struggling financially to survive is a letter from the IRS informing him or her there has been an error and more tax is due, interest and penalty is due.

Tax Preparers Promising Large Refunds is a post from: Thistle Debt Consolidation

Called Refund Anticipation Loans (RAL), these loans are usually not good loans to accept. As reported by the Consumer Federation of America, 8.4 million taxpayers paid millions of dollars to companies offering RALs. They also paid $738 million in loan fees. There was another $68 million paid in other fees.

It is hard to believe that so much money was paid in fees to obtain tax refunds that could have been processed in less than two weeks by the IRS. Sometimes the fees literally eat up the entire refund leaving the consumer nothing.

There are 12 million people who paid out $360 million to tax preparation companies or quick money companies to buy financial products. Many of these people believed they had to do this in order to get their refund faster.

The federal government is investigating many of the nation’s RAL companies. Recently the Santa Barbara Bank & Trust was ordered to stop making RAL loans. The federal regulators are viewing these loans as predatory in many cases because they target low income and financially desperate consumers.

The RAL is a short term loan that usually has terms extending 2 weeks. It is not a coincidence that the loan term is only one to two weeks because that is all the time it takes to get an automatic deposit of an IRS refund. But if the refund is late for some reason, expensive fees are initiated that can quickly eliminate a taxpayer’s chances of seeing any of the tax refund money.

In 2008 approximately 1 out of every 17 returns was involved in a Refund Anticipation Loan. Jean Ann Fox is the Director of Financial Services for the Consumer Federation of America. She was quoted as saying, “In tough economic times, quick money may be tempting. But American taxpayers need every dollar of their refunds, and waiting just a week or two will put more money in their pockets.”

The Santa Barbara Bank & Trust was responsible for most of the RALs offered by Jackson Hewitt. This has put a real crimp in Jackson Hewitt’s ability to offer RALS.

That is fine according the Consumer Federation of America. Americans who want a rapid refund should simply file their tax returns electronically. Consumers can request the refund money be deposited directly into their bank accounts.

The effective annual percentage rate applied to RALs is an exorbitant 50 percent to 500 percent. The lowest loans cost the highest percentage. A consumer expecting a $300 loan could end up actually paying the loan much more than was borrowed. This is due to the add-on fees that accumulate rapidly.

The bottom line is that RALs are not good financial products in most cases.

Consumers Lose Millions To Tax Refund Operations is a post from: Thistle Debt Consolidation

Just because someone uses the word “tax” in their advertisement does not mean they are legitimate. In the minds of many consumers, no one would claim to serve as an intermediary between them and the Internal Revenue Service unless the company is honest and legitimate.

It is this kind of thinking that costs consumers millions of dollars every year in fees paid to companies they believed could help them get a tax debt settled. Though the idea of settling a tax debt for pennies on the dollar sounds wonderful, making it happen is extremely difficult. The IRS will only negotiate up to a point, and unless you are someone like Secretary of the Treasury Timothy Geithner, you will have to pay most or all of your tax bill.

Paying someone who is not a tax attorney to negotiate an IRS settlement is unnecessary. The IRS guarantees you legal representation should you need legal help in certain matters and are unable to afford hiring an attorney. But even more importantly, the IRS has a plan called offer-in-compromise where you ask them to let you clear a tax debt for less than the amount due.

All the tax settlement specialist is doing is selling consumers an offer-in-compromise. First of all, the offer-in-compromise is not accepted very often. The IRS seems to take the stand that if you can afford to pay part of the debt then you can probably pay all of the debt by making payments.

Second is the fact you can fill out your own offer-in-compromise and do not have to pay someone else to do so. In the opinion of consumer advocates, the businesses offering tax settlements are little more than consumer scams. The IRS rejects 75 percent of the offer-in-compromise applications no matter who makes the request.

The IRS can afford to wait. That’s the bottom line. It may take you a lifetime of payments to clear your tax debt, but the IRS does not care. They are not motivated to accept the offer-in-compromise. That’s why it is a virtual scam to tell people you can help them get their tax debt settled for pennies on the dollar. The odds of that happening are quite low.

How do you avoid this type of scam? First, you should avoid giving your money to anyone who only does tax settlement work through offer-in-compromise. Second, you should make your own offer-in-compromise. Third, you should never pay anyone fees that can amount to several thousand dollars unless you understand exactly what you are paying for. Blind trust will get you scammed every time.

To be honest, the IRS will probably come to believe you can pay your tax debt if you can afford to hire someone to help you get it settled. In other words, using a tax settlement specialist could cost you money for very little service and hurt your negations with the IRS.

Tax Specialist Scams Are Still Scams is a post from: Thistle Debt Consolidation

As unemployment continues to remain at 10 percent, it has become doubtful whether consumer spending will be able to play any significant role in propelling the economy out of the recession. With inflation making its debut after a period of declining prices, it becomes even much less likely that spending can drive an economic recovery.

Though prices are rising only at a moderate rate, consumer wages still fell 1.6 percent in 2009 when inflation adjusted. Another way to state this is that consumers lost 1.6 percent in buying power. A dollar in 2009 will buy 1.6 percent less than a dollar in 2008. This is yet more bad news for consumers already struggling to make ends meet. The 1.6 percent decline in average weekly earnings for employees is the largest drop in a single year in twenty years.

There are more reasons than just inflation for the loss of consumer purchasing power. First is the fact employers have not been giving raises or cost of living increases. Second is the fact new jobs have become scarce and it is new job growth that often drives wages up in a competitive environment. This picture is not expected to change soon either.

Consumers are facing much more than just a loss of purchasing power though. Inflation may be modest, but other costs are rising including health care. Many families have lost their health care coverage after being laid off meaning the family must now pay for expenses that were once covered. Making an already bad situation even worse is the fact that health care costs are rising at the same time.

Other expenses that keep rising include utility bills, college tuition and fees, and interest and fees on credit cards. Many families are falling behind in their payments or are just barely staying even from month to month. Balancing household expenses under these circumstances can be very difficult.

Some of the best advice consumers can follow is to not ignore any bills or accounts. If unable to make timely payments it is important to contact the vendor or lender. Many businesses and banks today are working very hard to help consumers deal with their financial problems by lowering payments and extending the time allowed for payoff. Some companies will forgive interest and penalty charges also if the consumer is unemployed.

The good news is that inflation is expected to stay low through 2010. But most consumers should not count on a raise because the economy has lost 7.2 million jobs over the last two years. With so many people looking for work and an economy that is still struggling, most employers are not motivated to increase wages. Of course many firms simply cannot afford it either.

Consumer Wages Squeezed By Inflation is a post from: Thistle Debt Consolidation

The reason they are considered to be scams by most state Attorney Generals is because people desperate for cash end up paying 25 percent or more of their tax refund to the company offering RALS. An even worse scenario is when the actual refund is less than the expected refund and the consumer must pay the difference back to the loan originator. In those cases the consumer ends up owing the tax difference and the fees, often leaving very little in the way of net cash.

Like any scam these lenders tend to prey on people who need cash quickly or are unable to understand the loan terms. The lenders can be any one of a number of businesses. Common companies offering RALS include payday lenders, car title loan companies, car dealers, and tax preparers. The fees charged for “helping” consumers get their tax refund quickly include preparation fees and filing fees. Once the loan is issued, interest charges begin to accumulate.

The simple fact is that people can file their tax returns electronically for free and expect to see the refund within two weeks. In addition, taxpayers earning less than $49,000 a year can get free tax preparation assistance. In other words, consumers can get their tax refunds quickly without incurring a lot of fees and interest on loans.

Many deceptive practices are used to push the RALS. Consumers are often not given all the facts such as the fact the refund will go to the loan originator and not the consumer. Many people don’t realize they are actually agreeing to a loan and believe they are only agreeing to pay a fee to get help obtaining their tax refund sooner rather than later. It comes as a surprise when interest is charged on a loan and they never see the actual refund.

Another problem that arises is when the refund is delayed for any reason. The loan continues to earn interest until paid. Some lenders will actually charge additional fees when a refund arrives after a date established in the loan agreement. Fees can be high too and especially when expressed as a percentage of the refund amount.

Some states have already put constraints on the rapid refund businesses, but there plenty states that have no rules in place yet. Consumers should be aware that businesses offering rapid tax refunds and also offering to give cash equal to the refund net of some fees are actually offering expensive loans. As such, it’s important to approach the transaction with the same caution and analysis given any loan. That is the best way to avoid getting gouged through an RAL.

Rapid Tax Refunds Can Turn Into High Interest Loans is a post from: Thistle Debt Consolidation