Falling into debt is quite easy, especially if you have a growing family. Digging yourself out of debt is another matter altogether. Here are some tips that will help you to lighten your debt load:
Complete A Personal Financial Inventory
You need to know how you got into debt to figure out how to get yourself out of it. Find out what you owe, how much you spend, and what you own. Doing so will help you to trim spending in some areas and find more money to clear your debts.
Put Away The Plastic
When you find yourself in debt, you need to stop using your credit card straight away. To curb your dependence on plastic, consider retiring cards that you no longer use and make your others almost inaccessible. Moreover, you need to quell the urge to overspend because it will make your debt problems worse.
Tell Creditors If You Plan To Skip Payments
If you know you cannot make a payment, you need to call your creditors and let them know beforehand then ask for additional time. If you make this call before missing a payment, your creditor will be more willing you work with you. However, if you keep quiet about it, you risk incurring additional charges.
Work With A Debt Settlement Company
According to the owner of DebtAcademy.com, working with a debt settlement company is the best way to get rid of your debt quickly. Such companies contact your creditors and ask them to lower the amount you owe so that you can pay it in a lump sum. If creditors do not agree to this plan, they risk losing the whole amount when you go bankrupt.
Start With The Highest Interest Rate
When digging your way out of debt, start by paying off loans or credit cards with the highest rate of interest. Set aside some money for repaying that debt each month whilst paying the minimum on your other debts. Once you finish paying off the high-interest-rate debt, start tackling the debt with the next highest interest rate.
Mail Payments Early
When repaying through mail, send the payment some days before your due date. Failure to do so may incur a late fee. To avoid this, you need to mail the payment early so that it gets to your account on time. When making payments through phone apps or online, find out when they will get to your account.
Since some companies wait a few days before they post your payment, make it early: late fees are costly and they hurt your credit history.
Avoid Credit Repair Scams
There is no quick fix for repairing bad credit or getting yourself out of debt. Therefore, avoid companies that make such promises then ask for upfront fees. If a company tells you to cut communications with your creditor and asks for personal as well as your credit card information, you need to be wary.
Bankruptcy Should Be Your Last Resort
When debt becomes too unbearable, most people think that filing for bankruptcy is the only solution. If you are considering the same thing, talk to your financial counselor first. Although bankruptcy might seem like a good idea at the time, it might not provide the debt relief that you are after.
According to the owner of Plumfund, if you cannot keep your business afloat due to debt, consider online fundraising platforms. You will get funding from people who are not expecting anything in return.
About Jammie Morey
These are all wonderful tips. I need to figure out a way to affordably pay back student loans. That is my major killer, any suggestions for that one??