Here are some sobering statistics about American debt.

• About 1.6 million U.S. households -- one of every 73 -- filed for bankruptcy in 2004.

• Average per household debt in the U.S., not counting mortgage debt, is about $14,500 -- especially noteworthy because before the 1930s, most middle and working class people had no major debts.

• Some 40 percent of American families spend more than they earn each year.

• Average personal wealth of a 50-year-old American, including home equity: less than $40,000.

• Nine of 10 Americans claim credit card debt has never been a source of worry.

• But 47 percent would refuse to tell a friend how much they owe.

• Twenty-three percent of Americans admit to maxing out a credit card.

• Eleven percent of Americans admit card debts went to collection.

• Thirteen percent of Americans have been 30 days late paying credit card bills in the past year.

• The average graduate student has six credit cards and one in seven owes more than $15,000.

• The personal savings rate in the United States has dropped from 8 percent in the 1980s to just below 2 percent since 2000.

The New Year is a time of new beginnings.  A fresh start and a renewed outlook.  Most Americans participate in the age-old tradition of making New Year’s Resolutions and not too surprisingly, we all share similar goals when it comes to improving ourselves and our lives.

Below are ten of the most common resolutions. See how many are on your list too.

1.  Lose weight and/or eat healthier
2. Quit smoking
3. Exercise more/join a gym
4. Spend more time with friends and family
5. Get out of debt
6. Enjoy life more
7. Quit drinking
8. Get organized
9. Learn something new
10. Help others/donate/volunteer

While all of these resolutions are admirable, it’s not likely that the average person could accomplish all of them in one year if it that was their goal.  It’s actually best to choose one resolution—the one most important to you and make that your top priority.  Or maybe choose your top three but work on only one at a time in order to be successful.  The key to achieving your goal is to make it realistic.  Saying something like I’m going to lose 50 lbs by Valentine’s Day is only setting yourself up for failure (and frustration).

Statistically most Americans have given up on their resolutions by early spring and don’t revisit them again until the next year but by breaking it down to just fixing one thing in your life; you have a much better chance of being successful.

If getting out of debt is high on your list, First Rate Debt Solutions is here to help.  With millions of dollars in debt settled in 2009 and a wide range of programs we can tailor to fit your needs, 2010 can finally be your year to become DEBT FREE!

Happy New Year!

On behalf of all of us at First Rate, I would like to take a moment to wish everyone a happy holiday season.  This past year has been challenging for many Americans including many of the staff at First Rate as we navigate our way through these challenging economic times.  But we remain committed to providing real solutions for those with severe financial difficulties and top notch customer service to all those who have enrolled in our programs.

Many are predicting that 2010 will be a better year economically.  This is not to say that we should expect a huge improvement but that hopefully the worst is over and the economy can start to rebound.  No one is expecting huge increases in housing prices or for the credit crunch to go away but in some ways that's okay.  Interest rates should remain low and that will help some people who do have large amounts of debt.

For all those Americans that are still struggling financially, our wish for you is that 2010 brings relief to those problems.  As always, we are available for a free personalized consultation to evaluate your situation and see if one of our debt relief programs would be of value to you.

Above all, have a safe and happy holiday and best wishes for a healthy and prosperous 2010!

I’ve seen several articles recently (most likely sponsored by the big banks) really trashing the debt settlement industry and debt settlement companies in general saying that they don’t work which is absolutely not true.

Just like in any industry, there are good companies and bad ones.  Not all companies are the same and who you choose to work with will make a big difference in how successful you will be.

Debt settlement works and it works well for the right person.  Each situation is unique and debt settlement is not a one-size-fits-all solution.  It must be the right solution for you and you must be committed to making it work.

Many people want to look at debt settlement as a “magic pill” or “get out of debt free” card.  It’s not like that.  It’s a serious program that takes 2-3 years to complete that will save on average 50-60% of the debt owed.  But it doesn’t happen overnight and it’s not without its drawbacks.  

A legitimate company will explain the program thoroughly along with the other options available to make sure that it is the right choice for you.  They will also explain exactly what to expect and what you need to do to be successful.  If you can’t commit to doing what it takes then it’s not right for you.  Here are a few tips to make sure that you are successful if you choose the debt settlement route.

1. Do your homework and find a legitimate company that follows all state and federal guidelines and is a member of one of the professional trade organizations like IAPDA, TASC, or USOBA.  Check them out with the secretary of state to make sure that they are a legitimate and licensed business.
2. Be completely candid and honest with the settlement company about exactly how much you owe and what you can realistically afford.  They are there to structure a program that works for you and need to know the specifics to do that.
3. Comply with the terms of the contract and know what they are.  Read the contract before you sign it and ask questions if you have any.
4. Make your payments each month.  You can’t get out of debt if you aren’t fully committed.
5. Don’t talk directly to your creditors or interfere with the negotiators efforts.  The creditors are professionals and know how to intimidate you and coerce you.  Professional negotiators know how to “talk” the talk and that’s what you are paying for.
6. Be Realistic.  Remember the amount of time you signed up for the program.  That’s how long it takes to get out of debt.  Don’t sign up for 36 months and then get mad when you aren’t out of debt in four months.  Be patient. 
7. Start saving and cutting back on any unnecessary expenses.  You are trying to get out of debt and the faster you save money, the sooner it will happen.

Being in debt is a very stressful situation and one that requires immediate attention before it gets even worse.  Finding the right company with trained, caring financial consultants is the first step to navigating a path to financial freedom.  Debt settlement, done properly by a reputable company, WORKS.  It will get you out of debt much faster than you could just paying your bills normally and you will pay back far less.  You'll also have a chance to 'start over' without the stigma of a bankruptcy.

After the bankruptcy laws were changed in 2005, there was a drop in the number of filings each year.  But that drop was short lived as the declining economy pushes more and more Americans into filing for bankruptcy protection.  The numbers in 2008 were up over 30% from those in 2007.  These frightening statistics are all too real.

The real question now is after filing, how can you recover your financial well-being and get back on track?  First and foremost you are going to have to be patient.  It’s a long but achievable process.

1. Start by applying for a new credit card.  One with the lowest fees and rates you can qualify for.  Remember when you were in college and got your first card?  You were excited even though it was 30%.  That kind of card may be all you can get.  Take it and spend a little bit of money on it and pay it off every month.
2. Keep your debts at a minimum and make every payment on time.  This is critical to rebuilding your credit history.
3. After a year or so, apply for a another credit card with a lower rate and ask that the rate be reduced on the original card now that you’ve proven you make your payments on time.
4. Keep your balances under control.  Do not spend a lot on any cards or loans.  Part of a good FICO score is a low debt to available credit ratio.  Don’t buy anything you can’t afford to pay off in one month.
5. Don’t get sucked into any kind of credit repair scheme.  There is no magic pill to wipe out a bankruptcy.  It takes time and discipline.  The bankruptcy will stay on your credit report for 7-10 years but if you play your cards right, you can start to rebuild your credit before that.

The easiest way to recover from financial distress is to avoid bankruptcy in the first place.  Debt Settlement can often be the optimum solution to helping you avoid the long-term negative effects of a bankruptcy while still providing serious debt relief.  The key to a successful debt settlement program though is to get into the program before you are “bankrupt”.  Sometimes if you wait too long to address the situation, you leave yourself no option but to file. 

If you think you might be headed that direction, contact the consultants at First Rate for a free evaluation to see if debt settlement can help you.

This is a very common question and one that is easily explained.  In almost all cases, secured debts are not negotiable and in almost all cases, unsecured debts are.  That’s the short answer, but here’s the difference.

All debts are either secured or unsecured.  A secured debt is usually tied to an asset, like a car for a car loan or a house for a mortgage. If at any time you stop making payments, the lender (or lien holder) can repossess your car or foreclose on your house.  Secured is the same as collateralized and they just take the collateral if you can’t pay the debt.

An unsecured debt is not tied to any asset and includes most credit cards, bills for medical care, signature loans, private student loans, and debts for other types of services such as cell phone service and other utilities.

Some examples of unsecured debt that are not negotiable are:  government backed student loans, taxes (current or past due) and other government loans.  If you owe money to the IRS, you are most likely going to get a payment plan (best case) unless you file for bankruptcy.

One example of a secured debt that might actually be negotiable is your home mortgage.  Over the past year, we have had tremendous success with home loan modifications.  In most cases, we were able to negotiate a new lower payment for our clients significantly improving their ability to pay and therefore avoiding foreclosure.

There are many reasons why people get into debt and only just a few solid ways to get out.  The most important step in getting out of debt is acknowledging your situation and analyzing your finances to find out if you really have a problem and if so, how big is it.

The first step is to make a budget.  In one column write down all the money you earn in one month and in another column, write down everything you spend including your Starbucks habit and any other seemingly small incidentals that can really add up.

Total the two columns and that’s your first snap-shot into your finances.  Then start to work on the difference.  If you are spending way more than you are earning, you are headed for serious trouble.  How big of trouble depends entirely on the difference between the two numbers.  If it’s less than 10% difference, you can probably cut back and make it work by cutting back on some of your expenses like going out to dinner, shopping, and other extras.  If the difference is between 10-20% you may need to sell something like a car or cancel your cable service to really balance your budget.  Anything from 20-50% may require a restructuring of debt.  Anything higher than 50% may mean a possible bankruptcy.

To get yourself out of debt follow these simple tips:

1.     Write down every single thing that you spend money on for a month...everything!

2.      At the end of the month, cross off all the things that you know you can do without and stick to it.

3.      Don’t buy anything that you don’t absolutely need and look for the best deal on what you do need.  Use coupons at the grocery store and only buy the meats cuts and produce that are on sale that week.

4.      Evaluate all of your utility expenses.  Cut back on water, electricity, gas use and cancel your cable or reduce the package to save money every month.

5.      Don’t drive anywhere that you don’t need to go and combine all of your errands into one trip or even at one store to save on gas.  Carpool for school and work if possible.

6.      Try to negotiate with any of your credit cards that you are carrying a balance on to lower the monthly interest rate.

7.      Save aggressively to start paying down any debt you may have accumulated and leave your credit cards at home so that you won’t spend anything more.

8.      Prepare for the once a year expenses like auto insurance and property tax.  If you have a little money left over at the end of the month, save it for those expenses or any type of emergency.

Debt settlement has been around for years but a lot of people really don’t know about it.  After hearing how the program works, the first question is usually, "can the debt settlement process/program really be legal?"  The answer is absolutely YES!  Debt settlement is a legal and effective solution used by thousands of Americans to help avoid bankruptcy.  The basic idea behind debt settlement is very simple: negotiate deals with credit card companies that are mutually beneficial for both parties.

If a consumer cannot pay their debts in full and is considering bankruptcy protection, there is a good chance that the creditor will not get any or very little payment.  With debt settlement, we negotiate with the credit card company for the consumer to pay a lump sum to satisfy the outstanding balance but usually only a small percentage of what the original balance was thereby benefiting the consumer as well.

The greatest advantage for the credit card company is that they avoid any future problems with collecting the debt, and any concession made on the creditor's part is most obviously tax deductible.  If the consumer files for bankruptcy, the creditor is most likely out of luck so this is the perfect example of “something is better than nothing.”

So then why are so many skeptical of the program and its results?  The problem with debt settlement is not the legality of the practice, but the ethics of some who practice it.  Unfortunately, a number of unethical debt companies have been found to take advantage of consumers' financial strife to boost business.

Some companies with no experience in the finance industry are just popping up over-night, taking money, making promises, but rarely delivering.  Those few “bad apples” make it harder for those of us that are operating ethically to gain the trust of the public.  The debt settlement industry is no different than any other and you need to do your research before you sign up.  We have been in the financial industry for years and we are committed to helping consumers find real solutions to the debt problems.

Debt Settlement has worked for thousands of Americans to help them get out of debt legally, honestly, ethically and most of all quickly.  If you think you might need help, one of our Debt Settlement consultants is here to answer any questions you have and provide a free, no obligation quote on what we can do for you.

This is the time of year most people make their new year's resolutions.  Have you made your and if so, how are you doing so far?  Are you on track or already giving up?

The top resolutions each year are to lose weight, exercise more, save more money and/or spend less money, get out of debt, get a new job (or in this economy, get a job), or spend more time with family.

Many never actually accomplish their goal for a variety of reasons whether it was unrealistic, they didn't take it seriously, or they just needed help.  If you make too many or too difficult of a resolution, you are setting yourself up for failure.

If on the other hand, you make a resolution, take it seriously and get help, you can be successful.

If your goal this year is to get out of debt, then we can help.  With the continued stress in the economy, more and more Americans are finding themselves deeply in debt for the first time in their lives.  And most are un-prepared or unaware of their options.  That's why an experienced and qualified debt consultant can make all the difference in the world if you are serious about getting out of debt and staying out.

Visit our website for important information and recent settlements to learn more about how you can make 2009 the year to become debt free!

This is the time of year that everyone tries to make a fresh start.  Renew your goals and make your resolutions.  What will 2009 hold for you?   Do you want to lose weight, quit smoking, exercise more, or maybe get out of debt?

Last year, TransUnion's TrueCredit.com commissioned GfK Roper Public Affairs & Media to assess Americans' thoughts about their finances at the turn of the New Year.  The survey found that in 2007, one if four (25%) of all Americans missed making one or more on-time bill payments, with the bulk of those delinquencies occurring on Utilities (12%), Credit Cards (12%) and Medical Services (11%).  Meanwhile, only 17 percent chose paying down debt as their top resolution for 2008, down notably from 22 percent in the previous year's survey.

Will all that change for 2009 or will it get even worse?  Americans don't want to be in debt but many don't have a choice.  With the economy in a slump and unemployment on the rise, millions of Americans have seen their debt grow so much over the last year that paying it off seems "impossible".  As the economy continues to struggle and people are forced to pay more for food, gas, and rent, folks are finding it harder and harder to make ends meet.  That's when they turn to their credit cards to start to bridge the gap between expenses and income.  This only makes the situation worse as the minimum payments increase with higher balances making it impossible to do more than make the minimum payments each month.

You can break this cycle and get your financial house in order and now is the time!  Debt settlement or debt negotiation is the answer for those who are struggling with debt and see no way out.  If 2009 is your year to get our of debt, then First Rate Debt Solutions is here to help.