The effect of the recent economic depression in the U.S is still evident. Credit card debt and student debt are major issues these days. Bankruptcy and unemployment rates are still very high. Under the circumstance, thousands of people are resorting to debt management and debt settlement programs. However, you should understand that before you consider such programs, you should consult a law firm. Most debtors are, however, unaware of the benefits that law firms can offer them.

What are the advantages of hiring a law firm

1)    Almost all law firms offer you free debt counseling services. While counseling, a debt counselor or an attorney analyses your financial situation critically. Then he recommends you the most suitable debt relief program. Many debtors make the mistake of filing bankruptcy when it is possible to avoid this traumatic experience. If you hire a law firm then it will help you to avoid such costly mistakes.

2)    A law firm can guide you to file bankruptcy as well as help you to settle or consolidate your debt. Also, it will offer you debt management services.

3)    A law firm conducts an audit before starting a negotiation process to verify the precision of any given data in order to ensure a successful settlement process.

4)    Another major advantage of hiring a law firm is that they have a steady working relationship with most financial institutions. This increases the chances of settling your debts successfully.

5)    Hiring a law firm can pay off if any legal issue arise while you are in a debt relief program. This is because the law firm will be able to give you attorney representation in that case.

Choose law firms with care

Hiring a law firm can be quite beneficial for you due to the above mentioned reasons. However, the debt relief industry is inundated with scam companies who claim to be legitimate law firms and deceive the indebted people by taking advantage of their desperate situation. It is wise to remember the following things before choosing a law firm:

1)    Remember that an authentic law firm always emphasizes on transparency. They would be happy to answer any question that you might have and will let you know all the important details so that you can understand what you are getting into.

2)    Check the online reputation of the law firm you are considering. You should check the Better Business Bureau (BBB) rating of the law firm to have an idea about their credibility. To know the client feedbacks, you can visit trustlink.org.

3)    Ask for testimonials from the law firm. If a law firm has a decent number of satisfied clients then it should not be an issue for them.

Remember that a law firm is always more reliable than a debt relief company. So if you are struggling with your debt then consider the above points and look for a law firm today.

Should I take out a reverse mortgage?

When it comes to retirees who are currently struggling with high living expenses, a reverse mortgage can definitely help generate extra cash flow but there can be an expensive downside. These types of programs typically carry stiff fees, nearly three times as much as those on a traditional mortgage. These upfront fees can sometimes exceed 10% of the loan.

While a reverse mortgage can generate extra cash flow, it’s not necessarily the best or only way to do that. Due to the high upfront costs, a reverse mortgage would not be a great option if you are considering on borrowing a small amount or plan on moving in a few years. You might want to consider taking out a home-equity line of credit, which can cost far less.

Downside

Part of the upfront cost of a reverse mortgage would be the loan-origination fee. These fee can top $7000 on a $500,000 home.  With these types of fees, salespeople are more aggressive in persuading you to take out a reverse mortgage wether you need it or not. Some will try to convince you to invest in high priced financial products, such as annuities to boost up their commission even higher.

While annuities and reverse mortgage are usually pitched to seniors, it is unlikely that you would earn more with an annuity than you would be charged in interest and fees on a reverse mortgage. Worse, if you are considering on taking the money out in a few years then expect to be charged upwards of 20%.

Trying to establish credit for the first time can be a stressful task if you’ve never held a credit card in your name or taken out a loan before. Fortunately, establishing new credit isn’t as hard as it may seem even with no prior credit history. Here are few steps on how to obtain a credit card and at the same time, build a good credit profile.

Choose wisely

Truthfully, getting a new credit card can be as easy as walking into your local Sears and signing up for one of their store cards. This may seem like a good idea at first, but could end up doing you more harm than good.

Using retail cards to build your credit isn’t the best idea. Though these type of cards offer great promotions, they usually carry high up-front interest rates which can put a serious damage in your credit if you let your spending habits get the best of you. Say you decide to purchase a new TV with your Sears card. Not only do you now owe $1000 on your charge card but with the high interest charged to your account, it makes paying off the card a tough task and can raise your debt to income ratio, which may lower your credit score.

So before you decide to apply for that retail store card, remember to choose wisely.

Don’t overdraw it

A common mistake that most people do is overdraw their accounts. Though this doesn’t impact your credit score directly, keeping a balance in your account shows banks that you have some sort of idea on how to manage money, which makes you less of a risk to creditors.

Obtain a secure credit card

Most people who already have a checking account with their bank may find that the easiest way to obtain a credit card is through the firm they already bank with. Though it sometime may require a deposit to set up, people find the rates to be more reasonable then store cards and a great first step to building a positive credit history.

Currently, I have several savings accounts with several different banks. At times I feel a little overbanked, but each bank has their own benefits. As we start a New Year, I have put together a checklist of important criteria to consider while searching for that perfect bank, especially in 2011’s new era of banking.

Low Fees. Looking for a bank with little to no fees these days maybe a little harder. It should be no secret that banks are actively raising fees in 2011. JP Morgan and Wells Fargo will begin to phase out their “ fee-free” checking accounts, which previously had no minimum balance requirement and monthly activation fees or service charges. Though online banks and credit unions tend to offer lower fees, larger traditional banks may spare their customers from higher fees if they have mortgages, loans or credit cards with the same bank.

Proximity. With ATM fees increasing ten cents from $1.32 to $1.42, based on Bankrate’s 2010 Checking Study, it is important to choose a bank nearby that has ATMs close to both your home and your work, where you can withdraw cash and deposit checks at your convenience.

Quality of Service. Bigger isn’t necessarily better in this category. American Customer Satisfaction Survey last month release that consumers prefer smaller banks such as credit union to much bigger banks, mainly due to individualized services and personalized customer relationships.

Savings Rate. It’s not exactly a saver’s market today, given the 0.5% average interest earned in a checking account.  You will generally find better rates at online banks like AllyBank, credit union, and SmartyPig.