Debt Reduction & Debt Relief

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Third month payments - the person would then take the $125 previously used to pay off Credit Card A and apply it as additional payment to the Credit Card B balance, which would make payments for the next three months as follows: Credit Card B - $151 ($26/month minimum + $125 additional available) Car Payment - $150/month minimum Loan - $200/month minimum Three more months (six total) - Credit Card B would be paid in full (the final payment would be $146), and the remaining balances would be as follows: Car Payment - $1750 Loan - $4000 Then the person would take the $151 previously used to pay off Credit Cards A & B and apply it as additional payment to the car loan balance, which would make payments as follows: Car Payment - $301 ($150/month minimum + $151 additional available) Loan - $200/month minimum It would take six months to pay the car loan (the final payment being $240), whereupon the person would then make payments of $501/month toward the loan (which would have a $2800 balance) for six months (with the last payment at $234). Thus in 17 months the person has repaid four loans, with two of them being paid in a mere five months and three within one year. Benefits The primary benefit of the smallest-balance plan is the psychological benefit of seeing results sooner, in that the debtor sees reductions in both the number of creditors owed (and, thus, the number of bills received) and the amounts owed to each creditor. Retirement contributions should start once your expected investment yield is higher than the next highest debt interest rate (generally 8% for a balanced portfolio). In a 2012 study by Northwestern’s Kellogg School of Management, researchers found that “consumers who tackle small balances first are likelier to eliminate their overall debt” than trying to pay off high interest rate balances first. A 2016 study in Harvard Business Review came to a similar conclusion. Page 40 of 147
Criticism It’s expensive. If you’re not the “hug yourself” type, and you’re not a fan of brain fakes, then the Debt Snowball method just costs you more money. By ignoring a $1,200 debt at 17% interest and focusing, instead, on paying off a $50 debt at 5% interest, you continue racking up interest charges on that $1,200 debt. And at 17% it racks up mighty fast. It’s slow. It’s a fixed strategy that underestimates your ability to boost your income and leverage good debt to accelerate your debt payoff timeline. — Andy Proper, "The Fastest Way To Get Out of (Bad) Debt, Get Into (Good) Debt, and Start Building Real Wealth", WealthFit (11/08/2018) People with more financial discipline can get ahead more quickly by paying off the credit cards and loans with the higher interest rates first. This will minimize costs to become debt-free faster than the smallest-balance approach. Dave Ramsey, a proponent of the debt-snowball method, concedes that an analysis of math and interest leans toward paying the highest interest debt first; however, based on his experience, Ramsey states that personal finance is "20 percent head knowledge Page 41 of 147
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Page 10 and 11: 4. Throughout the process, we encou
Page 16 and 17: Matthew 6:24 “No one can serve tw
Page 18 and 19: This work is not meant to be a piec
Page 20 and 21: Debt Relief in Developing Countries
Page 22 and 23: The injunction is as follows: If th
Page 24 and 25: epaid; and debt slavery, when the d
Page 28 and 29: Process The bulk of the consumer de
Page 32 and 33: In the United States, small busines
Page 34 and 35: confidence in the recapitalized ins
Page 36 and 37: turnaround of the business, and emb
Page 38 and 39: Regulations United States In the Un
Page 42 and 43: and 80 percent behavior" and that p
Page 44 and 45: In 1999, a comprehensive review of
Page 46 and 47: Debt Relief Frees-Up Resources for
Page 48 and 49: uyback operations. Some commercial
Page 50 and 51: debt-to-exports exceeded 200-250% o
Page 52 and 53: the decision point once it has demo
Page 54 and 55: Notes _____________________________
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Advocacy Foundation Publishers The
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XVI for Drug-Free Communities Landm
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Vol. VIII 2022 ComeUnity ReEngineer
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Vol. XV 2029 Inner-Cities Revitaliz
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The e-Advocate Monthly Review 2018
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2021 Biblically Responsible Investi
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The e-Advocate Journal of Theologic
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Issue Title Quarterly Vol. I 2015 I
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The e-Advocate Juvenile Justice Rep
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2018 - The Theological Law Firm Aca
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www.TheAdvocacyFoundation.org Page
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