Five Things You can Do When You are Buried in Debt
There are many people living under a big burden of debt, and unfortunately, few are aware of the solutions they have that would allow them to get out of debt. With interest charges being high on credit cards, digging out of credit card debt is tough, but not impossible. Below are five things you can do to relieve your debt problems.
1. Debt Consolidation
Enrolling in a debt consolidation program is a smart move. A debt consultant negotiates with your creditors to lower your interest rates, drop your late charges and penalties and potentially negotiate your remaining debt owed. In turn, you make a monthly payment to the debt consolidation company. The debt consolidation company lets the money accumulate in your account and begins paying off your debts to creditors until the debt is paid in full.
2. Consumer Credit Counseling
If you want to receive professional help for debt relief, consumer credit counseling is a good option. Professional credit counselors help you plan a budget and stick to that budget so that you have a firm grip on your money. In addition to credit counseling, they assist with bankruptcy counseling and housing counseling. It’s always best to get help so that you not only get rid of the debt you already have, but that you stop accumulating debt as well. If you don’t take both steps, you may end up in a vicious cycle of debt.
3. Filing Bankruptcy
When you file for bankruptcy, you should know that it will affect your credit score for the next 10 years. The good news is that bankruptcy can totally relieve you from your debt, or you have the option of filing a bankruptcy plan that allows you to pay back your debt on different terms. When filing for bankruptcy in Ontario, there are some companies, like McLay, that offer great solutions to bankruptcy and other services like debt management counseling and credit counseling.
4. Change Your Lifestyle
As harsh as it may sound, if you want to cut debt, you need to cut some of your expenses. Stop picking up fast food. Stop buying newspapers and magazines. Stop grabbing that cup of morning coffee on your way into work. Pack your breakfast and lunch for work. If you don’t live too far from work, walk or take a bus instead of driving your car. Switch off the lights when you leave the room. Eliminate some options from your cellular phone or cable bill. More importantly, create a budget and stick to it. The only way to avoid more debt is to stop spending money that you don’t have.
5. Increase Your Income
Try finding a part-time job to earn extra money. If you are computer-savvy, look at some Internet websites where you can sell things or make money from home. You’ll probably be surprised at the number of opportunities you will find working from your own home computer. If you can’t find ways to increase your income, it’s more important to implement the other four options listed above. Even if you do find a way to increase your income, it’s important to put any extra money towards getting rid of debt, rather than spending the extra money on your own wants.
Getting rid of debt might take some time, but it will be well worth your while at the end of the day. Debt can become a vicious cycle, you accumulate more as you try to pay old debts off. The only way to avoid this is to live within your own means and budget your money wisely. The best way to avoid debt is to only spend money you have. Try implementing a cash system if you are prone to credit card debt. Getting rid of your debt will take you closer to your goal of financial freedom.
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Category: Debt
