What is a good debt to equity ratio?

What is a Good Debt to Equity Ratio?

What is a good debt to equity ratio? Debt ratio is one of those terms that get thrown around when looking for loans. What is debt ratio and what does it mean for you and your debt? There are a couple of ways to look at debt ratio, but first, we need some definitions of what actually is a good debt to equity ratio.

What is Equity?

Equity, for people, is what you have that is worth money or that has grown in value. Homes are the most common types of equity. If you have a mortgage of $150,000 and the house is valued at $200,000, you have $50,000 in equity.

Cars and boats generally don’t have equity as they lose value over time. Stocks, jewelry, artwork, and similar items may or may not have equity. It depends on how much you bought it for and how much someone is willing to pay for it.

If you are would like more information on what a good debt to equity ratio is, contact us for your FREE consultation today. See how much money you can save with our debt settlement program.

What are Assets?

An asset is like equity but includes your after-tax income. We are going to use asset and equity to mean the same thing.

What is Debt?

Debt is what you owe. Loans, credit cards, mortgages, student loans, and similar items feed into debt.

What is Debt to Equity Ratio?

A ratio compares one value to another. The debt to equity ratio compares how much debt you have to how much equity you have. The formula is below. Feel free to use the equation to find what your good debt to equity ratio is.

what is a good debt to equity ratio image

If you owe $100,000 and have total assets of $200,000, you have a debt ratio of ½ or 0.5 or 50%. If you have total debts of $200,000 and equity of $100,000, you have a debt ratio of 2 or 200%. The lower the debt to equity percentage, the better you are situated.

Why Do I Need A Good Debt to Asset Ratio?

Most lenders use debt to asset ratio as a clearer look at debt to equity ratio. This adds in your after-tax income for a better idea of how easily you can repay your debts.

You can figure out debt to assets two ways. The first is all debt except mortgage. The second is with a mortgage. Let’s break it down with some numbers.

Without mortgage: Add together all debts (loans, credit lines, credit cards, etc.) and divide by after tax income. Let’s say you have $10,000 in debts and an after-tax income of $59,000 (the median US income). Your debt ratio is 0.17 or 17%.

With mortgage: Add together all debts plus the total of 12 monthly mortgage payments and divide by after tax income. Now you have $10,000 in debt plus $12,360 (based on US averages) in mortgage payments. Your debt ratio is now 0.38 or 38%.

What is a Good Debt to Equity Ratio?

Now that you have some numbers, what do they mean? The ideal debt to equity ratio, using the formula above, is less than 10% without a mortgage and less than 36% with a mortgage.

If you exceed 36%, it is very easy to get into debt. Most lenders hesitate to lend to someone with a debt ratio over 40%. Over 40% is considered a bad debt equity ratio for banks.

High and Low Debt Ratios

When you look at debt to equity ratios, a high ratio means you probably don’t have enough equity to cover your debts. A low ratio means you can take advantage of your equity to take out loans if you want.

How to Improve your Debt Ratio

Possibly the easiest way to improve your debt ratio is to pay off debt. If you have credit card debt in excess of $10,000 and are having trouble paying it down, Pacific Debt, Inc may be able to help you out.

Contact one of our debt specialists for a free consultation.

For more information, talk with one of our debt specialists today.


Disclaimer: We are not attorneys or accountants and can not give you legal advice. If you have legal or tax questions, you should contact the appropriate expert.



Is Debt Settlement A Good Idea?

Is Debt Settlement A Good Idea?

When you are in debt, you have several options. Bankruptcy, consolidation, settlement, credit counseling, and ignoring the whole mess are all options. What is the best one for your situation? In this article, we’ll take a look at debt settlement, otherwise known as debt resolution.

What is Debt Settlement?

In debt settlement, you and your creditors reach an agreement in which you pay less than you owe. A debt settlement company like Pacific Debt can help you to settle your credit card debt and learn to live debt free.

How Do I Settle?

Debt settlement works best if you are NOT current on your payments. If you are making payments on time, creditors may assume that you are capable of paying back your debt.

Once you convince them that you are unable to pay your debt, they may be more willing to reach a debt settlement agreement. Pacific Debt has an excellent track record of settling accounts and knows which creditors are most like to settle.

Some creditors will insist that you settle in full. Others will settle for far less than you owe.

You will make lump-sum payments to eliminate each debt.

Trustpilot Pacific Debt Review - Is debt settlement a good idea - Jayne


I Don’t Have Money for a Lump Sum Payment

Most people don’t have a savings account large enough to cover their debts. If you did, you’d pay off your debts upfront. Pacific Debt has a solution.

Pacific Debt will set up an escrow account that you deposit money into regularly. Since you will not be paying on your debt, you take that money and set it aside. As it builds up, you settle each debt as you have funds.

How Long Does Debt Settlement Take?

Depending on how much you owe and how much you can set aside, debt settlement can take between 2 and 4 years.

How Much Debt Do I Have to Have?

Pacific Debt requires you to have $10,000 in unsecured debt, generally credit cards, and be unable to make more than minimum payments.

Many people panic when they hit a $15,000 credit card debt amount. Since that is more than most Americans earn in 3 months, a $15000 credit card debt is frightening. Pacific Debt can help.

Can I Settle Student Loan Debt?

Yes, you can settle student loan debt. However, it is not easy. Federal student loans have three options to settle student loans. All three come with a big catch.

  • Option 1 – pay off current balance plus accrued interest
  • Option 2 – Pay the total principal and half of the interest balance
  • Option 3 – Pay 90% of the total principal and balance owed

What is the catch? You must make a lump sum payment within 90 days.

Pacific Debt can work with you or refer you to a trusted partner who can help settle student debt. Get your free debt settlement consultation today.

What are the Drawbacks to Debt Settlement?

If this sounds too good to be true, good for you for thinking about the drawbacks! There are several and these should play into your decision making.

When you stop paying on your debt, your credit score will take a hit. It generally recovers as you pay back your debts. The fact that you settled will show up on your credit report. It can take up to seven years to remove a debt settlement notation from your report.

You may be sent to collections. This comes with its own set of annoyances, from phone calls to letters. Once you have convinced creditors that you are serious about settling, creditors generally settle.

What are Pacific Debt’s Settlement Steps

First, you need to enroll and get a free consultation. You will be given options that may work for you. Choose the best solution for your unique situation.

Next, stop making payments on your unsecured debt. Pacific Debt will help you set up an FDIC insured Special Purpose account. You will make deposits into that account every month.

While the balance grows, Pacific Debt negotiates with your creditors. Your account manager will be in contact every few weeks. As your account grows, your settled debt will be paid off.

It takes about 24 to 36 months.

If you only want to improve your credit scores or lower interest rates, debt settlement is not the way to do it.

If you have questions, contact us today.

For more information, talk with one of our debt specialists today.


Disclaimer: We are not attorneys or accountants and can not give you legal advice. If you have legal or tax questions, you should contact the appropriate expert.

Should you file bankruptcy because you cant pay your credit card bills?

Should You File Bankruptcy Because You Can’t Pay Your Credit Card Bills?

Americans collectively have $1 trillion in revolving debt balances – most of that is credit card debt. If you are one of the millions of Americans with credit card debt, know that you are not alone. It might not help, but misery does love company!

If you are having trouble paying your credit card bills, you are probably looking for a solution. Bankruptcy might seem like a great option. You might get your debt wiped out and be able to start over again.

Before you decide on bankruptcy, check out your options very carefully. Bankruptcy has some serious consequences.

Is Bankruptcy an Option?

There are two forms of consumer bankruptcy. Chapter 7 is designed for people who absolutely can not pay their bills. You must pass a means test and earn under your state median income for your family size. Chapter 13 is for people with a steady source of income and specific amounts of unsecured and secured debt.

For some people, bankruptcy is the only option. If you owe more than you can realistically pay off, you may need to seriously consider bankruptcy.

Bankruptcy can provide immediate debt relief and puts an immediate stop to the harassment. In some cases, all of the unsecured debt is forgiven, and you get a “clean slate.”

Pros of Bankruptcy

  • Stops Bill Collections – No more collection calls and letters.
  • Eliminates Credit Card Debt – Depending on the BK you file, all your debts could get wiped away.
  • Allows the opportunity to start rebuilding your credit – Enjoy a fresh financial start!

Cons of Bankruptcy

  • Damaging to your Credit – Your credit rating takes a hit after you file a bankruptcy. It stays on your credit report for 7-10 years depending on the type of bankruptcy that was filed.
  • Cost of Filing and Lawyers – Bankruptcy can be expensive. There are filing fees, and lawyers can cost thousands of dollars. Make sure to check all your options carefully.
  • Physical and Mental Drain – Until your bankruptcy is finalized, you’ll still get creditors’ harassing phone calls and threatening legal letters. Many people agonize over the stigma of bankruptcy.
  • New Credit and Loans – Your credit will probably take a severe hit. You will, at some point, need to start rebuilding your credit. It’s very difficult to get approved for new loans with a bankruptcy on your credit history.

If bankruptcy appears to be your only option, you may be a candidate for debt settlement. Pacific Debt may be able to help you avoid bankruptcy while getting out of debt.

For more information on debt settlement, talk with one of our debt professionals.


Is Debt Settlement a better option than Bankruptcy?

Debt settlement is a last resort to filing a bankruptcy. First, what is debt settlement? In debt settlement, you negotiate with your creditor to agree on a reduced balance. Pacific Debt is one of the leading debt settlement companies in the United States. We will negotiate with your creditors while helping you learn to live debt free.

Pacific Debt can help you if:

  • Have more than $10,000 in unsecured debt (generally credit card debt)
  • Live in a state where we do business
  • You are having difficulties making minimum payments

Pacific Debt is not for you if:

  • You want ONLY to improve your credit score
  • You ONLY want lower interest rates
  • You can make more than minimum payments and have a good credit score

Is debt settlement a better option than bankruptcy? It depends on your unique situation but here are some points to take into consideration.

  • Do you only make minimum payments on your credit cards?
  • Do you use credit cards to pay for necessities?
  • Are you using one credit card to pay off another?
  • Are bill collectors calling or creditors suing you?
  • Are you in danger of foreclosure?
  • Are you thinking of withdrawing 401K monies to pay your debt?
  • Have you lost your job?
  • Do you have a lot of medical bills?
  • Are you getting a divorce?

If you answer yes to any of these, you may be a candidate for debt settlement.

For more information on debt settlement,
talk with one of our debt professionals.

Who Can Help me with Debt Settlement?

Pacific Debt is a Debt Relief Provider with over 15 years of experience. Pacific Debt offers debt relief solutions tailored to your unique situation and budget. Our certified counselors help you work up a budget and  explain your options to you

  • Accredited by the Better Business Bureau with an A+ Rating
  • Rated 4.5/5 stars by ConsumerAffairs.com (over 450 verified reviews)
  • Rated 5/5 stars by TrustPilot based (over 400 verified consumer reviews)
  • US News and Report  – named Pacific Debt as One of the Best Debt Settlement Companies of 2018

Pacific Debt has helped thousands of people reduce their debt. We have settled over $250 million in debt for our clients since 2002. Contact us to see how we can help you.

How do I get started and how long will it take?

Once you make the decision to get out of debt, you apply through our website. You’ll be connected with a certified debt relief specialist who will review all your options. If debt settlement is right for you, we move forward on getting you enrolled.

If it is not, we refer you to one of our Trusted Partners who can help you with other options.

As you enter our debt settlement program, your certified debt relief counselor will analyze your debt, monthly expenses, and your income. They look at your current budget and determine a payment estimate that works for you. They then work with your creditors to agree on a lesser amount of debt and a repayment schedule. An Account Manager will be with you every step of the way.

For more information, talk with one of our debt specialists today.


Disclaimer: We are not lawyers and are not giving legal advice. We strongly recommend speaking to a professional before making any decisions.


How Does Debt Consolidation affect your Credit Score

How Does Debt Consolidation Affect Your Credit Score

What is Debt Consolidation?

Debt consolidation combines most of your debts into one loan with a lower interest rate. It allows you to consolidate your monthly payments and hopefully allowing you to get debt-free sooner.

There are several ways to consolidate your debt. You could do a balance transfer credit card, take out a personal loan, borrow from your retirement account or against your home’s equity. You can also work with a debt consolidation company.

There are other options than debt consolidation. Pacific Debt offers debt settlement options for people with more than $10,000 in unsecured (generally credit cards) debt.

For more information on both debt consolidation and debt settlement,
talk with one of our debt professionals.

Does Debt Consolidation Hurt Your Credit Score?

Debt consolidation hurts your credit score in the beginning. Before getting a loan or getting a new credit card, you will have to have a “hard” credit check. This generally lowers your credit rating by a few points on each inquiry. Before you apply for new credit, research the different loans and ask for quotes based on “soft” credit checks. You can make an informed decision and limit the number of hard checks.

Opening the new account will also lower your credit scores for a short time period. However, as you pay off your debts on time and the account age, your credit score will improve. As you pay off your debts, keep some of the oldest credit cards open (and debt-free) to improve your credit history.

Should I Consolidate My Debt?

There are good reasons to consider debt consolidation. By lowering interest rates, you’ll save money. Just make sure that balance transfer fees don’t eat up the savings.

Rolling many debts into one debt can make your life simpler. If you’ve been plagued by missing or late payments, you may save money by avoiding penalties. Not having missing and late payments will help your credit score. Payment history makes up 33% of your credit score, so a better payment history is important.

A lower-interest loan will let you put more money toward the principal instead of interest fees.

For more information, talk with one of Pacific Debt’s debt professionals.

Where Do I Start?

    1. There are several strategies that make debt consolidation work.
      1. Have a plan: transferring debt around without paying it off won’t get you debt free or improve your credit score.
      2. Make certain that your consolidation loan will save you money, get you out of debt, and raise your credit score. Take fees into consideration.
      3. Investigate several options
        1. Balance transfer credit cards – these come with fees, so double check them to make sure that any interest savings aren’t eaten up. Check the time limits on paying off your transfer. The interest rate may increase dramatically after that time limit. Promo dates are generally between six and 24 months. PAY OFF your transfer before that date. If you cannot, this may be a terrible idea. Know the payment due date!
        2. Personal loans – Lower interest rates can help you pay off higher-interest credit cards. Shop around and ask for quote based on soft credit checks. Double check the terms as the interest rates may be very high.
        3. Retirement account loans – Talk with a professional accountant before doing this. There are severe tax penalties for not paying back a retirement account loan.
        4. Home equity (HEL) or line of credit (HELOC)- If you own a home with equity (you owe less than you can sell the house for), investigate this type of loan. You will need to have more equity than you do debt for this to work in your favor.  Be aware that if you do not pay your home equity loan back, you can lose your house.

Pacific Debt can help you understand your options.

What Should I Expect?

Expect a hit on your credit score, although you can limit the effect with soft credit checks. If you pay off debts, stop missing or making late payments, and then pay off your new loan, you should see improvement in your score over time.

If you have questions, Pacific Debt may be able to help you understand your options.
However, Pacific Debt is not able to offer legal advice or answer tax questions.


Our Debt Specialists can help you explore your alternatives to bankruptcy, including debt consolidation and debt settlement options.



We are not lawyers and are not giving legal advice. We strongly recommend speaking to a professional before making any decisions.

What Percentage of Debt is Typically Accepted in a Credit Card Settlement

What Percentage of Debt is Typically Accepted in Settlement?

What percentage of debt is typically accepted in a settlement? One of the most common questions people have as they investigate settlement options is how much they will pay on each unsecured loan. There is no set answer but there are expected percentages.

Several factors play into typical debt settlement percentages.

  • How Much debt you owe
  • Who the creditor is
  • What your payment history is
  • How old the debt is


How Much Debt Do You Owe?

To qualify for Pacific Debt’s settlement program, you generally need to have in excess of $10,000 in unsecured debt, particularly credit card debt.

Once enrolled in Pacific Debt’s settlement program, you make monthly payments into a dedicated account. If you make these payments, our statistics indicate that you may pay off your debt at between 65% and 85% (including fees) over 24 to 48 months. That means that on a $10,000 debt, you can expect to pay $6,500 to $8,500. However, each situation is unique. Settlement percentages vary based on the individual creditor, your hardship, and available funds.

Talk to our Debt Experts for a FREE Consultation today.

Who is the Creditor?

Every creditor is different and has different policies. How aggressive they are may depend on your state of residence, homeownership status, and employment.

Pacific Debt has an excellent track record in working with most creditors in many states. We will do our best to get you the best settlement possible. However, for more aggressive creditors, settlement percentages may be higher or they may be less inclined to accept settlement funds in installment payments.

Contact us today to enroll in our debt settlement program. Our debt experts can explain to you exactly how our program works.

What is Your Payment History?

Your payment history has a big effect on your credit score. It also has an effect on how willing the creditor will be to settle. The more current you are, the less willing the creditor will be to settle.

In order to settle, you must be behind on all or most of your unsecured debts over $500. Otherwise, the creditor will see that you are paying off loans at 100% plus interest and may not be willing to settle.

Unfortunately, being behind on payments has a big effect on your credit score. Entering into a settlement program may also damage your credit score initially, as accounts go into delinquency but you may begin to see improvements as you pay off your debt.

How Old is your Debt?

As your debt ages, the creditor is less interested in holding it. They will “charge off” the debt after 180 to 210 days by selling or assigning it to a debt collector. In general, you’ll have more success in settling once the debt has gone to collections.

As you approach the 180-day mark, the creditor may be willing to settle, especially if you have a lump sum to pay off the debt.

Once the debt has gone into collections, you will most likely be eligible for a settlement. Creditors may be more lenient on settlement terms.

Depending on your state’s statute of limitations, once your debt ages past the cutoff, it is no longer collectible. Most states have a statute of limitations between 3 and 10 years.

Pacific Debt’s Proven Results

Trustpilot Pacific Debt Reviews customer review

Take a look at some of our proven results and past debt settlements with the creditors listed.

The following percentages reflect our settlement successes from our Debt Relief Program. Remember that each situation is unique and percentages vary. We have long-term working relationships with all of the creditors listed below. As a result, you’ll most likely get a better settlement when using Pacific Debt. These 2018 YTD percentages are based on the current balance at the time of settlement.

Creditor Name Settlement Percentage
Bank of America 47%
Capital One 51%  Read actual case study here
Chase 33%  Read actual case study here
Citibank 46%
Discover 59%
Kohl’s 47%
Lending Club 46%
Nordstroms 45%  Read actual case study here
Paypal 46%
PNC Bank 31%
Synchrony Bank 51%
USAA $45%
Wells Fargo 45%

click here to read our client testimonials.

Real People, Real Settlements

Kelvin, a San Diego insurance worker, owed $82,120.59 to seven different credit cards. Because he works on commission, his income varies every month. With Pacific Debt’s help, Kelvin was able to settle all seven accounts for $28,823.26. His payoff averaged 35% overall seven, with the highest percentage at 50%.

Filippo, from Los Angeles, recently divorced. He wanted to use the proceeds from the sale of the marriage home to settle two debts totaling $21,422.12. Pacific Debt helped him settle for $9,482.00 or an average 44% payoff. His highest percentage payoff was 64%.

Leslee, a self-employed San Franciscan, was out of work for medical issues. She owed $9,840.54 on two debts. After working with Pacific Debt. she was able to settle both debts for 60% or $5,922.55. The highest payoff was 80%.

Click here to see Pacific Debt reviews from our clients.

Each debt settlement case is unique.

Our Debt Specialists can help you explore your alternatives to bankruptcy, including debt consolidation and debt settlement options.


Clients who make all their monthly program deposits pay approximately 50% of their enrolled balance before fees, or 65% to 85% including fees, over 24 to 48 months (some programs lengths can go higher).

Not all clients are able to complete our program for various reasons, including their ability to save sufficient funds.

Our estimates are based on prior results, which will vary depending on your specific circumstances.

We do not guarantee that your debts will be resolved for a specific amount or percentage or within a specific period of time.

We do not assume your debts, make monthly payments to creditors or provide tax, bankruptcy, accounting or legal advice or credit repair services.

Our service is not available in all states and our fees may vary from state to state.

Please contact a tax professional to discuss potential tax consequences of less than full balance debt resolution.

Read and understand all program materials prior to enrollment.

The use of debt settlement services will likely adversely affect your creditworthiness, may result in you being subject to collections or being sued by creditors or collectors and may increase the outstanding balances of your enrolled accounts due to the accrual of fees and interest. However, negotiated settlements we obtain on your behalf resolve the entire account, including all accrued fees and interest.

5 ways to get debt relief from credit cards

5 Ways to Get Debt Relief from Credit Cards

Credit card debt is a problem for many Americans. For many people keeping up with monthly credit card payments is increasingly difficult. Causes vary. An illness, job loss, low income, or poor spending habits may be at the root. Spending more than you earn is very easy to do, especially with the convenience of a credit card.

If you cannot make your monthly credit card payments, act immediately! It’s easy to get caught up in increasing debt. You may not be able to break free without the help of a debt relief professional.

What types of debt relief help are available? We’ll discuss some options that may help you pay off debt. Hopefully, you can use these options to pay off your debt and start enjoying a debt free life.

What is Debt Relief?

Debt relief can come in the form of debt settlement which is the ability to negotiate or settle, your loan amount with the creditor. You may be able to lower the interest rate or even eliminate your entire debt.

Your situation is unique, and no one method fits everyone. Explore your options carefully and pick the one that makes the most sense for your situation.

Get a Free Consultation and find out how our Debt Settlement Program can start helping you live a debt free life today!

What Are My Debt Relief Options?

  1. Make Your Monthly Payments – Use our Credit Card Interest Rate Calculator to see exactly how much you’ll be paying on interest and principal.
  2. Debt Settlement – negotiate a lower balance on your debt amount
  3. Debt Consolidation – taking out a loan to pay off other debts
  4. Debt Management – working with a credit counseling agency
  5. Bankruptcy – a legal remedy to settling out of debt. Make sure to consult a lawyer in your area for more information

The last four options come with credit consequences on your Fico score. However, not paying your debt on time may also result in negative credit consequences. The biggest benefit of paying off your debt is that you will be able to rebuild your credit later. You can improve your credit score with effort and learn better money management skills.   

There are several types of debt that cannot be eliminated or settled. These include child support, student loans, and other secure loans.

What Do Debt Relief Companies Do?

Debt relief companies negotiate on your behalf with your creditors to help settle your debts. The debt specialists have worked with thousands of creditors. They know which creditors are willing to work out solutions and which are completely unwilling to settle.

Debt specialists know state and federal laws that govern lawsuits, collections, and statutes of limitation. Your debt specialist will guide you through each step of the process. The credit repair program takes two to four years and you’ll be in contact with your debt specialist at least once a month.

Once your debt is relieved, a reputable credit repair company will help you repair your credit rating. A good credit score makes it easier to buy a car, get a mortgage or even get better rates on credit cards and loans.

Steps Debt Relief Companies Take

  1. Your debt specialist will access your free annual credit report from Equifax, TransUnion, and Experian. You are entitled to one report each year, but they can be confusing. A debt specialist will guide you through the report.
  2. A debt specialist will go through your budget with you to see how much you can afford to pay each month
  3. Your debt specialist will work with your creditors to help settle your debts. They may be able to lower interest rates, settle on a lower amount, or even get the entire debt erased.

Who’s the Best Debt Relief Company For Me?

Pacific Debt, Inc has an excellent track record with credit repair. In business since 2002, they are in downtown San Diego. Pacific Debt has earned an A+ rating from the Better Business Bureau and is a BBB Accredited Business. They have settled over $200 million dollars in consumer debt. BestCompany.com ranks them as one of the best debt settlement companies.

Pacific Debt offers a free consultation. Their debt specialists will perform an in-depth analysis of your debt and advise you on your options. They ensure that you understand all options and all the program details. Depending on your financial situation, Pacific Debt works with you to be debt free in one to two years. The company does not make money unless your debt relief program works for you. You have nothing to lose and every to gain by contacting Pacific Debt for your free consultation.

Read real reviews from people who have used Pacific Debt to settle their credit.

A Certified Debt Counselor can help you from drowning in debt!


How to stop drowning in credit card debt

How To Stop Drowning in Debt – A DIY Guide

Learn How To Stop Drowning in Debt Yourself

People fall into debt each day – it might just be a national epidemic. The problem with being in debt is that once you’re in, you’re in! It’s very difficult to get out of debt because it can be a financial trap.

If you can’t keep up with your credit card payments, or miss a payment, your credit will take a nose dive right into the toilet.

Cash is king, but good credit is just as important! Most people do not have cash reserves for a big purchase and must depend on credit. This is where good credit can be a godsend. Let’s discuss the necessary steps to take to keep you from drowning in debt.

Figure Out Your Debt Situation

Your first step in getting out of debt is to identify all your debt.

  • Get a copy of your credit report from annualcreditreport.com or creditreport.com. This gives you a list of all your creditors
  • Figure out the current debt amount, interest rate, monthly payment, due date and any other important information
  • Record all this so it is very clearly laid out

Once you have all the information you can make an informed decision. It might be depressing but it is important to know.

Most experts encourage you to pay off the highest interest debt first. Others suggest paying off the smallest debts first. Sometimes paying off the smallest debt makes you feel like you are making progress. It depends on your unique financial situation.

You may be able to refinance or renegotiate terms, interest rates, and other debts. Many people are drowning in student loan debt. Student loans are difficult to renegotiate, but refinancing can be done.

If you need help learning what your interest charge on purchases will be, try our finance charge calculator.

Start a budget

Next, find out where all your money is going. Write everything down. Include where your cash is going, where you use your credit card, and what you can eliminate.

This is the basis of your budget. Budgeting doesn’t have to be a chore, but it is the only way you are going to get out of debt.

Your budget should include necessary and discretionary expenses. Your budget should consider the following, although you may not have expenses in every category. Don’t forget annual expenses like car registration.

  • Housing
    • Mortgage/Rent
    • Property Taxes
    • Household Repairs
    • HOA Dues
  • Utilities
    • Electricity
    • Water
    • Heating
    • Garbage
    • Phones
    • Cable
    • Internet
  • Groceries
    • Food
    • Alcohol
    • Toiletries
    • Cleaning Supplies
  • Personal Expenses
    • Gym Memberships
    • Hair Cuts/Salon Services
    • Cosmetics
    • Babysitter/Child care
    • Child Support
    • Alimony
    • Subscriptions
  • Transportation
    • Fuel
    • Tires
    • Oil Changes
    • Maintenance
    • Parking Fees
    • Repairs
    • DMV Fees
    • Vehicle Replacement
  • Healthcare
    • Primary Care
    • Dental Care
    • Specialty Care
    • Medications
    • Medical Devices
  • Clothing
  • Gifts
  • Emergency Money
  • Entertainment Money
  • Household Supplies
  • Insurance
    • Health Insurance
    • Homeowner’s Insurance/Renter’s Insurance
    • Auto Insurance
    • Life Insurance
    • Disability Insurance
    • Identity Theft Protection
    • Longterm Care Insurance

Figure out how much you spend in each category. Be honest. If you eat out every day, include that! Now you have a good picture of where your money is going and how much/where you are spending it.

Your next step is to decide necessary and discretionary expenditures. You may have to give up eating out, drop a gym membership, or stop buying coffee for a while. It won’t be forever.

See if there are places you can cut down your necessary expenses. Could you get a less expensive car, move to a new place, or save money on other expenses?

Do What You Can Yourself

  1. Consider refinancing debt
  2. Call credit card companies, etc. and renegotiate your interest rates
  3. Drop or decrease expenses
  4. Consider consolidating debt through a home equity loan
  5. Use cash to avoid the temptation to whip out a credit card
  6. Wait 24 hours before purchasing a non-essential item
  7. Add another/better job if possible

Get Professional Help Paying Off Debt

A debt elimination agency may be able to help you set a budget, renegotiate interest rates, and teach you how to manage money more effectively.

Ask about

  • Services offered – look for a range of services
  • Free educational information
  • Developing a plan for the future
  • Fees/Contributions – get them in writing
  • Contracts or Agreements
  • State Licensing
  • Counselor qualifications and how they are paid (commission, etc)
  • Security of personal data

Getting into debt is easy. Paying off debt is what takes work and effort. Following these suggestions can definitely help you to stop drowning in debt.

A Certified Debt Counselor can help you from Drowning in Debt!


Financial Anxiety

Financial Anxiety and How to Battle It

Financial Anxiety

Current internet articles, posts, and headlines are filled with descriptions of the financial issues troubling many Americans. Layoffs, tax debt, and bankruptcies can add to the financial stress, and according to the American Psychological Association (APA), it’s taking a huge toll on our health.

While the country continues to recover from the recession, many of us still feel the weight of crushing debt. Unfortunately, prolonged financial stress can negatively affect our physical, mental, and emotional health. The good news is that help is available. Options like relief from tax burdens, debt management programs, and budgeting strategies can provide hope for anyone feeling the pressure of financial stress.

Managing that stress and finding support are essential to a journey towards financial wellness. Here are some tips for battling financial anxiety:

Know Yourself

No matter what you are going through, there is one person that you can always count on — yourself. Money problems aren’t necessarily your fault. However, your attitude will be one of the greatest determining factors for success. When you are surrounded by debt, with no end in sight, you can do two things: you can worry and stress about your problems, or you can embrace the experience as an opportunity for growth and learning.

Think about your financial problems as financial bloggers think about their money problems. They look at their finances as a resource for learning; once they learn what they need to thrive, they turn around and teach others. This learn-then-teach attitude is a healthy way to approach debt and desperation. Your debt is both an obstacle to overcome and an opportunity to become financially savvy.

Look for Support

Dealing with financial issues is stressful. However, perhaps the most difficult part is accepting help (either financial or emotional) from those around you. The APA lists social support as one of the most useful tools in the journey to battle financial anxiety. The APA recommends the following strategies to grow your support network:

  • Cast a wide net. Nurture relationships with all types of people, e.g., co-workers, friends, family, religious leaders.
  • Be proactive. Be confident enough to approach others about your struggles.
  • Take advantage of technology. Use apps, blogs, and other resources available to reach others. Find the best budgeting apps to increase your savings and create a plan to escape your debt.
  • Follow your interests. Use your hobbies to connect with others.
  • Seek out peer support. Blogs are a great way to connect with people in the same situation.

Help Others

Teaching others what you learn can be an important step on your path to financial peace. Consider sharing tips, strategies, and experiences through a blog. You will discover two things when you seek to help others learn how to establish financial goals: support can be found by supporting others, and the fastest way to learn is to teach. And who knows? You may even find another career path offering online financial advice.

Aggressively Seek Financial Freedom

The options for escaping debt are as numerous as the avenues for falling into debt. You should be seeking any and all viable options for relieving your financial burdens. Debt management and debt consolidation are feasible options for those with considerable debt. Budgeting, investing, job-seeking, raise- or bonus-seeking, and side hustles are all good ways to save.

Your journey to financial wellness will likely start out slowly. Yet, if you use the right money-saving methods, then before you know it, you’ll be racing down the road to a brighter financial future.

Debt Settlement – 3 Marketing Tricks to Avoid

Debt settlement can be a stressful process, even before you enroll. Doing the research can add to your anxiety as you visit different sites, read reviews and try and determine who is the best debt settlement company for your needs. If you haven’t done so already, I suggest reading “5 Important Questions to ask Before You Sign Up.” 

As you do your research, it’s important to know that many debt settlement companies use misleading marketing tactics. To help you spot these deceptive tactics, we’ve put together a list of three common marketing tricks used by debt settlement companies.

Trick 1: Being deceptive about the fees. Most reputable companies charge no up front fees these days. In fact Federal law mandates it. If you shop around, most companies charge anywhere between 18-25% of the debt you enroll. However, some companies have recently started quoting these figures on an Annualized basis. So if the fee is 24% of the debt, but the program is 4 years, they quote “approx 6% per year.” Six percent sounds a lot better than 24% right? The fact is it’s misleading and our employees are hearing it more and more when consulting with consumers.

What Does Your Debt Relief Program Cost?

Trick 2: Bait and switch from personal loan to debt settlement. This is one of the most common tactics being used today by debt relief providers. Debt Settlement companies are sending out direct mail pieces offering a consolidation loan that sounds too good to be true. Unfortunately, it is too good to be true. After the consumer calls in to apply for the personal loan, they are told that they don’t qualify. Most consumers won’t qualify. The sales agent then presents the consumer with “good news!” The “good news” is the debt settlement program, which the consumer conveniently does qualify for. Here is an example of what these mail pieces typically look like:

Deceptive Marketing Tactics

Trick 3: All the Client Reviews are from recent enrollments. Many companies, including Pacific Debt, solicit reviews from customers on sites such as TrustPilot, BestCompany and Google. To read reviews about Pacific Debt, you can visit our website here, check out our blog or simply google “Pacific Debt reviews”. Reading actual customer reviews is a great way to hear what others are saying about a company. However, it is important to read several reviews to determine the quality of those reviews. Is the company simply asking for reviews from customers who just signed up or from those who have actually completed the program? Debt settlement is usually a 3-4 year program, so clients who have been enrolled for more than a few days are better suited to give an actual review of the service.

At Pacific Debt, we ask for reviews from new enrollments, active customers as well as recently completed clients. Some of our competitors only ask for reviews from recent enrollments. Recently enrolled customers are more inclined to hand out a 5 star review because they are happy to get help. Reviews from consumers who have experienced settlements and dealt with customer service over the course of many years, should carry more weight than reviews from brand new customers. So be mindful when you scan through the reviews of the debt settlement company you are researching, you should be able to read at least some reviews like these:

Pacific Debt is the Best Debt Relief Company

Review from BestCompany.com 3/17/18

Pacific Debt is the Best Debt Relief Company

Review from Google Feb 2018

So as your embark on your quest to find the best debt settlement company, please be mindful of these common misleading marketing tactics. If you’d appreciate a free evaluation of your situation, from a company that has been helping consumers for 16 years, call our team today at the number above. We can help you assess your situation and see if debt settlement is right for you. If not, we can connect you with a Trusted Partner who might be better suited to help. We are also happy to pass along some free advice and point you in the right direction.

Get Budget Help With Budget Apps

What Are The Best Budgeting Apps of 2018?

The Best Budgeting Apps of 2018

Most people believe in the power of budgeting; some people think it’s just an excuse to avoid the real solution. Richard Quinn, a retired VP of Compensation and Benefits with over 50 years of experience in managing pension and 401k plans for a fortune 200 company, offers some profound advice about budgeting. One particular thing he mentioned about budgeting apps will strike a chord with most budgeting experts. According to Quinn, “Nobody needs an app. They don’t even need a budget. They need to do a few simple things: Take their net pay and save 10% or more, throw away all credit cards, buy what you can afford only and spend all you want after fixed expenses. No budget needed.” What Quinn suggests may shock some at first, but it makes sense. Essentially what he is asking is for you to be smart with your money. Stop spending it first and start saving it first.

Yet, there remains a virtue in budgeting apps that might be overlooked in Quinn’s suggestion. What a budgeting app does is it disciplines and trains you to be the type of spender that Quinn envisions. If you have already achieved a high level of self control, you don’t need an app; in that case, as Quinn says, you don’t even need a budget. For the rest of us—those who are still learning to spend wisely and save regularly—we need a bit of help. Here are the best budgeting apps for those who need extra help in 2018.

YNAB (You Need a Budget)

Budgeting apps come in all shapes in sizes. The best one will mostly depend on your personal taste, but for Larry Ludwig, Founder of Investor Junkie, “YNAB is the clear winner.” Ludwig explains that YNAB is his favorite for its simplicity and lack of confusing “bells and whistles” and notes that “for a first time budgeter, it’s important not to intimidate them with a complicated user experience.” The app’s website explains its method in three simple steps: “Get some dollars, prioritize those dollars, and follow the plan.” Those who are in debt are often swamped by numbers and projections of how much they need to spend or save. YNAB is a simple solution to get you back on track or stay on track.


One of the coolest new budgeting apps is called Honeyfi, made for not only helping one person manage finances, but helps two at the same time. Most married couples have a hard time negotiating spending limits, individual allowances, and other finance rules. In the words of Sam Schultz, Co-Founder of Honeyfi, the free app seeks to solve that problem by helping “couples save more money, pay down more debt, and make better decisions.” Featured in HuffPost, MSN, and Entrepreneur, Schultz explains that the app does “spark a lot of communication IRL” and that it also allows “users to decide how much to share with their partner for each account (balances and/or transactions).” If you’re a couple looking to manage not one, but two different budgets, Honeyfi is a great option.


According to Brian Bartold, a licensed insurance professional with VFG Associates in Livonia, MI, the best overall budgeting app is Mint. This app lets you link “everything to the app including your credit cards, bank accounts and any brokerage or IRA accounts you have.” Though it might not have the speciality in helping couples like Honeyfi, Mint allows for more in-depth budgeting. Bartold also explains that Mint “also works with TurboTax and QuickBooks, two very popular programs for managing your taxes and bills.”

Even though Mint isn’t quite as cut and dry as other apps, it does simplify more complicated budgeting issues, like losing a job or going through a divorce, in a very helpful way. This simplification is possible because the app puts all financial processes in one place. Bartold explains this, saying “you may work with an insurance agent, stock broker, someone in your 401(k) department, all while doing stuff you are doing on your own. All those things are not being managed in one specific area. Using an app that combines everything you’re doing can make planning and budgeting simpler.” Mint is a great option for those with more money to budget and more financial issues to maneuver.


The best part of the PocketGuard app is that it lets users link directly to their bank accounts so that all transactions and balances are current. As opposed to many other budgeting apps, PocketGuard is more focused on spending projections than it is past history. Because of this, the app can let you know how much pocket change you have to spend on any given day or even month. The app is a great alternative to Mint or YNAB if those apps aren’t to your liking.

As Richard Quinn pointed out, the best budgeting system available is your own persistence and determination. The purpose of a budgeting app should be to make your savings methods become habitual. Whether it’s Mint, PocketGuard, Honeyfi, YNAB, or some other budgeting app, make sure you are learning self-sufficiency and responsible spending. The most efficient budgeting tool should be your habits.

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