Here we lift the lid on Transforming Debt into Wealth, Be Debt Free, Dump Your Debt and all of the other get out of debt programs on the market by writers such as John Cummuta, Ken Blanchard, Stephen Cooper and Robert Allen which basically all give similar information and advice. They all have 'secret information' to to help you become "debt free in 5-7 years, own your own house, car, boat!, have a 1 million pound retirement fund, eliminate all your debt and retire in 10 years".

We are going to let you in on the 'secrets' and we are not going to charge you one penny!  All the information will be on one page, spelled out in plain English, no links to yet another sales page and no request for you for you to pay for any of it!  We risk the wrath of the sellers of these programs by bringing you this information FREE of any charges.

"The Transforming of Debt into Wealth course is now the bestselling personal debt-elimination and wealth creation course in the world.   Why? Simply because my course works no matter how much debt you have. It's easy. Risk-free! And works with any income level!"  [ Claim by famous (infamous?) writer on 'becoming debt free' ].


Basically, most of the advice is the same as the advice freely given on the internet which is considerably cheaper to obtain but they try to charge you for it taking you further into debt!!!   A lot of the information in these Debt reduction programs is based toward an American reader because of the huge market in the USA however the information is just as relevant in other countries. 


What is called “snowballing” in one country is called an “accelerator margin” in another. This is money you use to “overpay” your debts one at a time until they're all gone. This is the main piece of information imparted by these debt reduction programs.   In the UK the advice they give is still relevant but we would also suggest you consider alternative methods as well as a debt reduction program. Firstly, contact your debtors (the people) you owe money to) and explain the situation to see if you can make arrangements with them to either write the debt off or freeze the interest or make smaller payments by spreading the loan over a longer period.  Take a look at the percentage interest you are paying and see if a consolidation loan (one loan to pay off all the other loans and debts) or re-mortgage would reduce the amount of interest you are paying.


Individual Voluntary Arrangements (IVAs)
An IVA is a less drastic alternative to bankruptcy. It is a legally binding agreement between you and your creditors, where you make affordable repayments for 5 years (60 months) and after this period your remaining debt is written off and you are free of your debt. As part of the IVA all charges and interest are frozen, meaning that your debt will not increase. Your creditors and any debt collectors will also no longer chase you for money, as all such letters and phone calls will be dealt with for you. Any legal action that may be underway against you will also be stopped, including any bankruptcy proceedings. An IVA can only be arranged through a licensed Insolvency Practitioner.


Live Below Your Means (LBYM)  Debt reduction programs list several ways to Live Below Your Means (LBYM) to save a few dollars here and there and cut out ALL frivolous spending, e.g. £2 a day on coffee/colas (take a flask), £3 a day on lunch, (take a packed lunch) no biscuits or chocolate, cut out alcohol, no online spending including gambling and bingo, changing light bulbs to energy efficient low wattage ones, turn down the thermostat, never buy a new car, stop going the pub 4 nights a week, cut out smoking, lower all your credit card monthly payments to minimum in other words cut out all unnecessary spending, no spending for pleasure, buy only the absolute minimum and use the money saved to make maximum payments on the debt with the highest interest rate, etc… Simple advice that you can find anywhere.




Interest free periods  Take advantage of interest free periods offered by credit card companies.  You may have a bad debt history but this does not mean that credit card companies will not give you a credit card.  Thisnk about it.  Someone who uses their credit card and pays off the whole amount at the end of every month may seem like a good risk but how does that benefit the credit card company?  Someone who pays off the whole debt does not pay any interest to the credit card company and therefore the company makes no profit.  Someone else who only makes the minimum payment each month will be paying the most amount of interest and therefore is more profitable for the credit card company.  So try to find a credit card company offering a low interest rate and a long interest free period on balance transfers and a low balance transfer fee (typically from 1.9% to 3%).  The best we have currently found (Jan 2009) is the:


Barclays Platinum 14.9% per annum, 0% on balance transfers for 14 months with a 2.9% fee on transfers. 
Virgin credit Card, 16.9% per annum, 0% on balance transfers for 16 months with 2.98% fee.
Tesco offers 15.9%, 0% for 14 months on balance transfers with a 2.9% fee.
MBNA offers 15.9%, 0% for 13 months on balance transfers with a 2.9% fee.


Apply for around 3 at the same time because to begin with they will only give you a low credit allowance so you will only be able to transfer £500-800 to each card.  Once you have your new cards transfer as much of the balances off of your old cards to the new cards transferring those balances where you are paying the highest interest rates first.  For example,  if you have a store card which you are paying £50 per month, another credit card where you are paying £100 per month, and a third where you are paying £150 per month do not just assume you should transfer the balance off the £150 per month card first.  You may be paying 29% interest on the £50 per month store card but only 18% on the £150 per month credit card.  So find out the interest rate that you are paying on each card and transfer the highest rate off that card first, then the next highest rate.  Use the amount you are saving to pay additional payments off the lower rate cards that you have not managed to transfer the balances off of.


They also advise that it is a bad idea to save money (even if you can) whilst carrying a load of debt. This is quite true. If you are paying all your debts each month and you are also putting, for example, £100 a month into a savings account, you should stop saving in an account paying a measly 5% and use the £100 to tackle the high interest debts first. You get a better return on debt payoff, as you reduce the crippling interest, rather than earn the pitiful interest. For every £100 you pay off a credit card debt, you save round 18% or whatever their extortionate rate maybe. This is nearly always much more than any interest that this will earn in a bank account.


These programs suggest you should stop ALL forms of saving whilst trying to reduce your debt, including any investments you are making in your pension fund. If you're putting, say, £50 a month into a personal pension, you should stop. If you're lucky to have an employer that pays a percentage into your fund, then you should drop your investment to match their investment (e.g. 3%) and use the money you've freed up to tackle your debt.


They state that you should be aiming for at least 10% of take home pay to pay off debt by living below your means. So, if you bring home £1500 a month after tax, you should be able to glean at least £150 a month to use as your “accelerator”.

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