Debt Relief Strategies

If you’ve been using a lot of credit cards and even moved beyond your limits and the debts are beginning to pile up ahead of you, there are a few different things you can do to change this situation. What is the right debt relief strategy for you all depends on your personal situation and how deep into debt you have gone already.

The first thing you can do, either with the aid of a credit counselor or even on your own, is to become organized. Write down all your loans and what you have to pay and make a plan with how much money to pay to your creditors each month and all your other expenses. If you situation is bearable this might be the only debt relief strategy necessary for you.

If you’re credits are still pretty decent you can normally get a debt consolidation loan quite easily. This can either be secured or unsecured, depending on your situation. To get this together with a debt consolidation plan that helps you to get your finances under control can be a very good debt relief strategy.

A debt consolidation loan means that you take one big loan that covers all your other debts and this is being handled by a firm that also has the ability to be a professional middle man between you and your creditors. The interest rate on this loan normally is lower than the ones given by credit cards.

If your situation is feeling less manageable and you have the desire to completely get rid of all your debts, you can do a debt settlement. This means that you save up money in an account that’s been set up by a debt settlement company instead of paying your creditors. After a period of time, normally 90 days, the debt settlement company will negotiate with your creditors to pay back with a reduced rate. In this way you can settle your debts and become debt free faster. This debt relief strategy is only recommended to use if you already have a destroyed credit record since but want to save yourself from the last option – bankruptcy.

The final debt relief strategy is bankruptcy. As long as you can avoid this you should since this will stay with your records for 10 years, making it almost impossible to get future loans or only to extreme interest rates. This means that you clear yourself from all your debts and you have no more debts to pay.