Amongst those who make New Year's resolutions, getting out of debt is a right up there with losing weight and quitting smoking. When a person owes a large amount of money, they have a weight on their shoulders that keeps them from moving forward. They don't just need to get out of debt; they need to stay out of debt. If this describes you, read on.
Analyze your Credit Reports, Negotiate with Creditors and Consider Consolidation.
Tackling your credit reports may seem daunting, but is the first step in the right direction. Credit reports often have faulty information. Go through your reports, and make sure the information is both correct and balanced within all three. All three credit reports should have the same information. If not - write to them and request they be corrected. Getting rid of old history (if bad) is another crucial step.
Second, make calls to your creditors. Most are more than happy to talk to you about lowering your interest or payments. Logically, they are willing to take less than owed generally, to prevent losing everything to a bankruptcy. If not, you are not out of options. Read on.
Loan consolidation can be a great alternative for those in financial distress. Once you have negotiated and can do no more, many companies offer low interest loans for consolidating all your debt (if your credit score is acceptable), and if not, debt counseling agencies are resources that contact your creditors for you. They may be able to renegotiate payment and interest terms that will allow you to make one lower payment for a fee.
Some find that taking second jobs, ridding the budget of unnecessary spending, and destroying credit cards can help get them back on the right track. If possible, pay more than the minimum amount due on the consolidation loan, as lower interest rate loans have longer payment terms. If you have tried all of the above and still find that making ends meet is impossible, your only choice may be a declaration of bankruptcy.
About the Author:
Philip McClarence is an expert on living life Debt Free, debt consolidation and Personal Finance. Learn more including how to legaly get your creditors to reduce your debts by visiting the Get out of Debt guide.
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