Your Debt Questions, Answered!

Posted on March 15th, 2012

**We asked our Facebook community for their biggest debt questions. Today, Get Out Of Debt Guy is here to answer a few of the best ones.**

Debt Repayment Strategies

Q: What is the best way to analyze your full indebtedness? Basically, what do I need to do as far as homework to prepare myself for making the payments I need to, to get out of debt? (Lauren C.)

A: A great place to start is to get a copy of your consolidated credit report. Each credit bureau report contains some different creditors. I prefer a single consolidated credit report versus a different report from each of the three major credit bureaus because a consolidated report makes it so much easier to read and compare what is reported.

The consolidated credit report and any statements and bills you get in the mail will give you the most complete picture of who you might owe. If you are struggling to make debt repayments then I would suggest you use the Debt Repayment Calculator to review possible intervention options.

If you feel like you can easily afford monthly payments to creditors, a solution like ReadyForZero.com can give you the organization and discipline you need to get everyone paid in a prompt and orderly fashion.

When it comes to making payments the best advice is not to over promise monthly payments. Make sure you have set aside money for savings first and the payments you agree to make don’t overextend your budget. It’s much better to agree to a payment you can feel confident about making month after month than agreeing to something that will be a stretch.

His and Her Debt

Q: What advice would you give to help a married couple stay focused on their debt elimination goals? (Sean S.)

A: Recognize that generally one person in the relationship is a spender and one is a saver. Like other traits, financial opposites attract.

The best goal would be to sit down together and look at your total financial situation so you are both on the same page. Then make sure you are both comfortable with the plan you come up with to dig your way out of debt. Come together once a month and review your progress. Good communication is critical so there are no surprises along the way.

Typically the saver in the marriage wants to use every last dollar for debt repayment and is more goal focused. But if you want to avoid potential disagreements along the way and have the best chance of success, I would suggest that some money is held back each month for you both to use for fun and enjoyment. If you cut the spender off and not give them a little fun the debt repayment plan will most likely collapse along the way without you accomplishing your goal.

Homeownership After Bankruptcy

Q: How long after bankruptcy can you get a home loan? (Serina B.)

A: Excellent question and one that many people get wrong because they assume the answer incorrectly. The reality is bankruptcy is NOT a financial death sentence. It’s quite easy to rebuild your credit after bankruptcy using a couple of secured cards. In fact I wrote a step-by-step guide you can use to do this.

The irony is that by filing bankruptcy people are able to finally save and can build up a downpayment quicker than they would without bankruptcy. Within a couple of years you will be eligible for some types of mortgages and within three, most mortgages. They key though is to start immediately to rebuild your credit and save, save, save.

About a year or so after your bankruptcy find a local mortgage broker, meet with them, and plan what steps are necessary for your upcoming mortgage.

Steve Rhode is also known as the Get Out of Debt Guy and he gives free debt help and debt advice through GetOutOfDebt.org.