If you have overdue credit cards and personal loans, and you’re looking for some form of debt resolution, you’ve got a lot of options. I’ve covered many of these debt solutions before, but my favorite approach involves making a good old-fashioned commitment to yourself that you’ll spend less, maintain a budget and pay off debt as aggressively as possible (meaning: whatever you can afford, apply it to your outstanding obligations). Doing all these, coupled with sincere negotiations with your creditors that you’ll pay off what you owe can help you make a big dent on your financial situation. And before long, you may be pleasantly surprised at the significant progress you’ve made with handling your debt.

As I’ve mentioned, there are a lot of options anyone can take to start getting rid of their debt: there’s debt negotiation, debt consolidation, debt counseling or debt settlement. Which path should you choose?

Different Ways To Resolve Debt

Remember that in finance, it pays to have a good financial record. With that in mind, here’s a quick rundown of the methods people employ to reduce their debt:

• Negotiating your debts with creditors may allow you to minimize the amount you have to pay back to these entities, but you’ll continue to be on a repayment schedule.
• Debt consolidation requires a possible loan with long term repayments. I believe that this is a good approach to take in some cases, especially when you’ve got good credit. Something as simple as transferring your credit card balances to 0% balance transfer cards can help — that is, if you’re able to apply for one these days. Or the oft-mentioned p2p lending sites such as Prosper or Lending Club can be the salvation of anyone who can get through their doors with a favorable credit score. If you’ve got a less than stellar score, then debt consolidation may be harder to afford.
• Debt counseling is a solution that lets you review your personal financial situation and works to develop a realistic approach to repayment.
• Debt settlement is a way to wipe out your outstanding debts. While debt settlement sounds highly tempting and viable because of the possibility of negotiating down your debt load, you should still consider the pros and cons before you make a final decision.

Debt Settlement Pros

What attracts a lot of people to debt settlement companies and debt relief programs? Well, who doesn’t want to get the “debt monkey off their back” as effectively as possible? With debt settlement arrangements, much of your outstanding debt is forgiven through negotiations. Here are the pros and positive reasons for formally settling your debt:

• You could be completely free of debt within 24 to 36 months so you can start to build your credit again;
• You may be able to satisfy your debts for far less than you actually owe, representing a typical savings of 50% to 60% or more;
• Some creditors may agree to re-age your accounts and bring them to a current status to boost your credit score right away;
• All unsecured debts and medical bills in excess of $1,000 can be included in debt settlement arrangements;
• You can protect your credit report from incurring negative marks after you make settlement arrangements with your creditors;
• In most instances, your settled debts will no longer be subject to legal action or collection pursuits, so you don’t have to worry about debt collectors hounding you;
• You have more disposable cash to pay for utilities, housing, insurance and food; this may also help you free up more funds that you can direct to carefully selected high yield savings accounts and discount brokerages.

Debt Settlement Cons

There’s no real easy way to release yourself from debt — there’s always a cost to dealing with a third party or company in the debt industry. Now that we’ve explored the good points of debt settlement, let’s review the cons and areas of concern:

• Debt settlement companies often charge you an upfront fee plus monthly fee, waiting to pay your creditors until enough money builds in your settlement account so you can proceed to settle;
• Negative marks continue to hit your credit report until settlement payments are started, so your credit can be impacted while the settlement company waits for money to build in your account;
• Even though you’ll only pay off a percentage of your outstanding debt, settlement companies charge you a percentage of the debts forgiven; so some of the money intended for creditors will instead find their way as payments to your settlement company for services rendered. So how much of your money are you simply rerouting to a different entity? Here’s where a cost/benefit analysis may prove valuable and may influence the decision you make.
• Debt settlement applies to unsecured loans only so it can’t be used to help you pay off a car loan, mortgage or other secure loan;
• Your forgiven debt won’t really be forgotten because you’ll owe taxes on it. In fact, the portion of the debt which is forgiven by your creditors will need to be reported as income. As you can see, there’s no escaping the “tax man”.
• Debts appear on your credit report as “settled” instead of “paid in full” unless the terms are clearly negotiated with creditors;
• Collectors can sell the remaining debt to another collection agency if your creditor does not send you a written notice as proof that your debt has been forgiven. You’ll need to keep a record of the outstanding debts you still owe. At any rate, you could probably better manage and keep track of your debts and finances with a tool like DebtGoal, YNAB or Mint.com.

So is debt settlement for you? I think that each type of debt solution serves a certain market. What’s important is that you find the right solution for your particular situation. If your debt situation has become too unwieldy that you can no longer handle things on your own, then go ahead and explore debt counseling or other channels that are available to you. But make sure you are careful about the debt services and companies you deal with as this industry is vulnerable to abuse.

Debt settlement seems to be more of a last resort for those steeped in debt. It could be the solution to take if you want to avoid bankruptcy and are committed to developing a clear plan to start over with a clean slate.

Debt Settlement Pros & Cons To Consider Before Settling Your Debts

**Ilyce Glink show Notes - March 21, 2010 - How to Invest Your Money** Invest Your Money Wisely in 2010. Learn how to deal with a stock market that seems irrational. Should you invest in bonds in an era or rising interest rates? And, how big a share of your investment portfolio should be international equities? All of the answers to these questions will be found at our next event: HOW TO INVEST YOUR MONEY IN 2010. Buy your ticket today and get 40 percent off the ticket price. Rob Goshen, a senior vice president with Mesirow Financial, joins us in the third hour of our special show today to talk about risk. He'll be at our event on March 27, 2010 at the Gwinnett Center. 40% DISCOUNT EXPIRES WEDNESDAY!!! BUY YOUR TICKETS NOW!!!

A review of an online bill pay account.

Many of us are familiar with FNBO Direct because of their Online Savings Account, but they also have a few other products that could be of interest. Granted, savings account rates are less of a draw for savers who are looking for a new account these days. The yield on a savings or checking account is becoming less of a selling point or determining factor for customers who are in search of a place to park their funds. These days, online banking features such as convenience, ease of access, low balance requirements and low maintenance costs can begin to make more of a difference to people. At least, this would be the approach I’d take to deciding where my money should go.

That said, I’ve covered FNBO Direct here before, where I mentioned how they’ve been honored with a “Best Online Savings Account” designation in the past. So right off the bat, they’ve got a good reputation. While they don’t have a standard high yield checking account available, they DO have a product that can be a viable alternative to a checking account (except without the checks). The FNBO Direct Online BillPay Account is available to help you manage your bills while you build up your savings, and also has the same yield as its Online Savings counterpart (1.25% APY).

Online Bill Pay Account From FNBO Direct: A Review

The Online BillPay Account has these details, many of which you’ll find on a lot of online accounts with free bill pay features:

• Earn 1.25% APY. Pretty good for an electronic checking account.
• Pay bills without dealing with paper checks. The obvious benefit here is the savings you get for not having to use stamps or checks.
• You won’t be receiving paper checks through this account.
• Track your payments via payment history and payment summary reports.
• Set up recurring payments. You won’t have to worry about late payments anymore.
• You’ll receive an FNBO Direct Visa Check Card which doubles as an ATM card and debit card for both your FNBO Direct Online BillPay Account and Online Savings Account.
• Conveniently deliver your payments through mobile or email messages using POPmoney. You can send email and mobile payments from your FNBO Direct accounts.

The FNBO Direct POPmoney Payment Process

Here’s how FNBO Direct’s POPmoney payment process works:

To pay someone, just enter their information and your payment details under “Add a Merchant” in your account dashboard.

FNBO Direct Savings Account vs Online BillPay Account

To further clarify how the BillPay Account works, let’s discuss how to use this in conjunction with the FNBO Savings Account.

A convenient way to get started as an FNBO Direct customer is by opening an FNBO Direct Online Savings Account. You can link this account electronically to your other external accounts and fund it with as little as $1. You’ll then receive an ATM card to help you access your savings (this card can only be used at ATMs).

Now if you would like to use your FNBO funds to pay for your expenses or bills, then you’d benefit from also opening an FNBO Direct Online BillPay Account, which will garner you a debit card that also acts as an ATM card. All payments you make can be made via your BillPay Account or through your debit card. Note that you can only fund your FNBO Direct BillPay Account with funds transferred from your Online Savings Account. At any rate, these are accounts that have no minimum balance requirements and no monthly fees, thus making them popular choices for online banking customers.

Online Bill Pay Account From FNBO Direct: Review

**Paying Income Taxes In Two States** You might think that paying income taxes wasn't hard enough. Try paying income taxes in two states and try to figure out what state should get paid what and what state should credit you for any payments made to another state. If you use a tax professional, that person can help you out with state income tax returns in multiple states. If you are doing it yourself, you might benefit from income tax software that can work the payments to the different states and the credit that any state gives you for those other tax payments to the other state. You can use TurboTax, H&R Block among other tax preparations software that's available at most office supply stores, bookstores, and other retailers.

**Consequences of Foreclosure Include Not Being Able To Buy Your Own Home** If you have lost a home to foreclosure, you will find your credit ruined and unable to get a home lender to lend you money on a new home for several years. If you find yourself buying a home with friends or relatives, they won't be able to put you on the title to the home if they obtain financing. And if you use any of your own money to buy the home, you'll be in a position of not being on the title to the home and at the mercy of your friends and relatives. Make sure you document what you do, what is expected out of the arrangement and be truthful with the new lender on who is owning the home and why.

**Quit Claim Deed vs. Living Trust** When deciding how to pass on property to loved ones, there are many choices. You can transfer property now using a quit claim deed. You can transfer property later using a will. Or, you can place your property in a living trust now and set forth your wishes for the disposition of your property in the trust. The living trust can then dispose of your assets upon your death avoiding probate court requirements and you can control the property you own while you are living.

**Is Defaulting On Your Mortgage - A Strategic Default - Right For You** The new term in real estate is strategic default. A strategic default is when you decide to default on your mortgage rather than continue making payments. There are many reasons for a strategic default but some of them are the inability to pay, loss of a job, health issues, decline of income or that the home value has declined and the value of the mortgage loan far exceeds the value of the home. For some people defaulting on a contract is a moral question. While for other people, defaulting on a mortgage is solely a business decision that has nothing to do with moral issues.

**Only Refinancing Can Help Avoid Issues With A Mortgage After A Divorce** You may think that your divorce is final when you finally obtain a divorce decree. But you should know that some things may still left open: children may still be a source of issues after a divorce. But if you have not finalized all financial matters, you may still have troubles later on. If you owned a home and you signed the note and mortgage on that home, your only safe way to get yourself out of any problems that may arise from the home and the mortgage loan is to have the home refinanced with a new loan. Your name should not be on that loan and your name should come off the title to the home. When taking your name off the title to the home, you can use a quit claim deed or other deed generally used in your area.

**How Much House Can I Afford** While we all have seen shows on dream homes, we may not be able to afford those homes and may not want to actually live in those dream homes. You need to know how much you can afford when buying a house. When you know the amount, you still need to feel comfortable spending that amount on a monthly basis. A big mistake home buyers make is thinking they can afford a home and then realizing that they are spending too much of their money trying to keep their home. It's a common home buying mistake to buy more than you can comfortably afford. Make sure you are comfortable with your monthly home budget.

**Keeping Inheritance Separate** If you have received a sizable inheritance, you may want to protect that money from possible claims from your current spouse or future spouse. To keep your inheritance separate, you'll need to make sure that those funds are always kept in their own account, never commingled and you never use marital funds in any way with the inherited money. You should probably talk to an estate planner to help you out and make sure your inheritance is safe.