Let’s face it. In this day and age, almost everyone has debt. Even wealthy people also acquire debt through their credit cards. Being in this disposition is considered to be normal, especially with the very demanding and commercialistic lifestyle that we live today.
Nevertheless, since we appreciate the benefits that we enjoy from debts, we also hate the idea of being in deep with debt. That is the most stressful condition that one could be in. If you’re deep in debt and you feel like you can’t get out, here are some helpful ways on how to achieve debt relief. Let’s get started.
Option 1: Identify Your Debt Problem
Before making the mistake of taking desperate measures to resolve your multiple debts, you need to address what the cause of your debt problem is.
- Do you live a luxurious lifestyle?
- Do you tend to break your budget constantly?
- Do you buy things that you want and not need?
If your answer is yes to any one of these you need to work on changing your current habits in order to really help lower your risk of diving further into debt.
Option 2: Be Responsible for Your Financial Problem
As soon as you’ve identified the cause of your current financial crisis, you have to take full responsibility for it. Don’t run away from it. The only way you can move on in your life is to accept the fact that you created the debt problem yourself. Learn to find ways on how to get out of it the fastest. You can solve the problem yourself, or you can seek professional help from a debt relief expert. There are so many individuals or organizations out there who are willing to assist you to get out of your situation. Just make it sure that you consult the one that is legitimate.
Option 3: Create a New Budget Plan
Now that you have identified your problem and fully accepted responsibility for it, it’s high time for you to make a reality check of your financial standing. It’s essential that you identify what expenses you need to cut back, which debts you need to settle every month and how much you’re going to set aside for each expenditure in your household.
In other words, you should create a new budget plan to manage your income wisely and strictly. In doing so, you can create a spreadsheet for this and indicate the following details:
- Name of Creditor
- Amount Owed
- Monthly Payment (Minimum Payment)
- Payment Due Date
This system could help you track down your monthly obligations and be able to follow through your plan of doing a self-payment initiative.
Option 4: Negotiate with Your Creditors
It won’t hurt if you admit the truth to your creditors your financial hardship. It would be much easier for you to seek financial respite from them. What you should do to get their approval for the concession is to provide the relevant documents that would prove your financial difficulty. Once you can get their consideration and approval, you can then discuss the possible alternatives to settle your debt obligations. View this link for more help, https://www.facethered.com/freedom-debt-relief-review/
The following would be options that you can discuss with your creditors:
Sub-Option 1: Reduction of Interest Rates
You can ask for consideration from your creditors if they could reduce the interest rates on your debts. For instance, if you have a debt interest of 14% with a particular credit card, you can ask your creditor if it could be reduced to 11%. In this manner, you would be paying off lower monthly payments, and it could help you save money for other obligations.
Sub-Option 2: Time-Out Period
Another option that you can negotiate with your creditors would be to give you a time-out period of 3-4 months. Within this period, you won’t be required to pay your debts. This would give you the time to reorganize your finances and save up money so that you can catch up on your monthly payments.
Sub-Option 3: Repayment Program
The last option that you can negotiate with your creditors is to enter a repayment program. Repayment programs work on a set amount each week or month that is more within your budget.
Option 5: Get Debt Consolidation
Another way of acquiring debt relief is to consolidate your debt accounts into one manageable account. What this would do is eliminate higher interest rates from your debts, thus, resulting in lower payments. Plus, it would help to make just one payment every month instead of multiple payments.
Funds for debt consolidation have different sources. You could acquire a loan from a bank which may offer you low-interest rates, or you can get funding from a credit union that has better payment terms and lowers interest rates.
Option 6: Acquire Debt Settlement
Going through this process is quite delicate as you have to secure the services of a debt relief company, one that is not a scammer. The thing is, there are so many debt relief companies out there that guarantee you a financial solution for your debts, but they end up ripping you off. Do extensive research about debt relief companies by checking on evaluations given by the Better Business Bureau (BBB). This could give you background as to their credibility and efficiency.
The debt relief company will negotiate with your creditors and get their approval that you will settle lump sum payments for a percentage of your debts. In exchange for this, your creditors would be more lenient with your other obligations. The only downside of this option is that it could hurt your credit score rating. It would only be temporary though.
Option 7: Filing for Bankruptcy
If those options above don’t work to your advantage, then the last option that you can resort to would be to file for bankruptcy. However, you have to bear in mind that this move would damage your credit report severely. This will remain on your credit history for the rest of your life, and this would have even an effect on your future employment opportunities since there are employers who may reject you if you’ve been bankrupt.
There’s two types of bankruptcy that you can file for — Chapter 7 and Chapter 13 bankruptcy. Chapter 7 is also known as liquidation bankruptcy. It gets its name because you’ll be liquidating your assets to pay what you owe your creditors. On the other hand, Chapter 13, also known as reorganization bankruptcy, allows you to reorganize your funds so that you can regain a bit of paying power to settle your debts. To qualify for either of these types, you have to undergo the Means test, and it would be based on your income.
Getting yourself out of debt is no longer an impossible endeavor to accomplish nowadays as there are so many solutions that you can choose from just like those above. You just have to stick to your plan of relieving yourself from debt as this is the only way to enjoy your life and regain your peace of mind. Are you ready to have some debt relief?