Getting Out of Debt: Different Ways

You can trash the reminder letters all you want, but it doesn’t trash your debt. Debt stays with you like white on rice, so it’s best to figure out the best way to get out of it without having to resort to drastic means.

1. Pay beyond the minimum: The first thing you need to try and do is stop paying the bare minimum each month. Normally, this is about 3 percent of the entire balance and is exactly what banks expect of you. Less than half of your payment makes an actual dent in the balance and goes toward the high interest you owe, so all you’re doing is burning money in exchange for an absence of threatening phone calls; you’re not getting anywhere otherwise. Pay as much as possible per month; try for at least double the minimum. Examine your spending habits and slim down on the luxuries for now.

2. Get another job: If you honestly can’t slim down anywhere and are already skating on your teeth paying back your debt, you’ll want to consider getting a job. Use this money strictly for paying it back, paying off the ones with higher interest rates first and going down to the lowest.

3. Create a repayment plan: Whether you aim for another job or to cut out luxuries, you’ll need to create a plan for it all. Examine every portion of your spending habits and figure out where you can cut down. Writing it all down makes it easier to figure out.

4. Consolidate: Getting a consolidation loan can keep you current on all obligations, consolidating it all to one payment. Normally, you’ll have a smaller payment and a cheaper rate of interest to deal with here.

5. Renegotiate: Creditors aren’t going to laugh you out if you ask to renegotiate terms, but if you explain your situation and threaten bankruptcy as your last option, you’d be surprised how quickly they will jump to work with you. After all, they’d prefer they get your money than a partial refund on what they lent you.

6. File for bankruptcy: The ultimate in last resorts and final decisions, if you cannot pay back your debt by using any of these suggestions, you may have no other choice but to file for bankruptcy. Just be aware of the drawbacks that each chapter comes with, including the fact that it remains on your credit report for about ten years, which can be damaging if you need credit in the near future.

These are the most common ways that people take to get out of debt. Remember to fully explore your options before having to do anything drastic.

Author Bio:

Roxanne Porter is a freelancer & a regular contributor for www.nannyjobs.org/. She helps in providing knowledge about nanny services & love writing on nanny related articles. She helps in giving a fair knowledge about nanny Jobs to the community. You can be in touch with her at “r.poter08ATgmail.com”.

Be Sociable, Share!

Comments

  • Sarah James

    Hello,

    While going through few sites I came across your site http://thehowtogetoutofdebtplan.com/ and found some of your content really informative. So I was a little curious if I can also contribute something for your site.

    Actually I am a freelance content writer and I write articles related to Finance and Saving Money. What if I provide you with an unique article of around 600 700 words.

    I am not charging any fees for the article, in return I need just 1 do-follow link back to my site!!

    Please let me know if this sounds good to you, so that I can start working on your article

    Best Regards,
    Sarah James

    PS: You can mail me at this mail id which is contactsarahjames(at)gmail dot com.