To Get Out of Debt – It Is Difficult but It Can Be Done

2007-03-08 10:33:40

( Financial )



If you are one of the millions everywhere steeped in debt, you may feel like you might have to spend the rest of your life paying what you owe. It may appear impossible to accomplish but there are ways to get out of debt and overcome financial burden.

1. Come up with a realistic strategy. Figure out how much extra you can add to your monthly payments and use this to determine a realistic period to payoff your debt. It must have taken years for you to acquire your debt so it is logical that it will also take some time to get out of it.

2. Seek professional credit counseling to help you manage your finances responsibly. A credit counselor can also negotiate with your creditors to help you arrange a debt repayment plan that you can afford. Work with a credit adviser of good standing.

3. Consolidate debt. A debt consolidation loan can help you to get out of debt gradually. You can use this loan to payoff your credit card debts and other existing loans with high interest. Debt consolidation loans offer lower rates and are usually payable in terms as short as 2 to 5 years. When you have paid off your debt through consolidation, make sure you do not acquire new ones.

4. Opt for a bankruptcy filing only as a last resort to eliminate debt. When you file for a bankruptcy, you are requesting the courts to waive your debts. The big disadvantage is a bankruptcy filing will be on your credit report for 10 years and it can adversely affect your efforts in obtaining a loan in the future.

5. Examine and change your spending habits. You can write down all your daily expenses so you can see where you can make adjustments. Be willing to make some sacrifices. It is important to make a clear distinction between wants and needs. Cut down spending on your wants. Practicing self-control is the only sure-fire debt buster to get out of debt permanently.


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