How To Eliminate Your Debt Bills
With the easy availability of credit and the worsening economic climate, many people find themselves struggling with debt. Experts say that if you spend more than 10-15% of your income (aside from your mortgage) on repaying debts then you have a problem. With the easy availability of credit cards and personal loans today, many people would regard this percentage as manageable! In fact, many people are faced with a burden so large that it takes most of their income to service it. This can result in a vicious cycle of having to use additional credit simply to survive. This article describes some strategies that you can use to eliminate your debt bills.
Declaring Bankruptcy
Bankruptcy enables a person to legally discharge their indebtedness if they can demonstrate that they do not have the capacity to repay, and enables them to start over. While this may seem an attractive option, there are often serious conditions associated with bankruptcy (such as having assets liquidated or wages garnisheed) that can make it highly undesirable.
Aside from the stigma associated with bankruptcy, it will seriously affect a person’s ability to get credit in future. Bankruptcy should only ever be an option of last resort and used after all other avenues have been explored.
Debt Consolidation
One of the first things you need to do when seeking to reduce indebtedness is to actually determine how much you owe. Once you do you can consolidate all the commitments into a single loan. Many of us have multiple credit cards and store accounts in addition to personal loans and the like. Consolidating these commitments into a single loan can be an effective way of reducing repayments.
It helps you to control your spending by removing the temptation of using expensive sources of credit, such as credit cards, for example. You will be able to avoid penalties for non-payment which only add to the financial burden. Also, you can negotiate a lower rate of interest and spread the commitments over a longer period which makes for manageable repayments that you can plan for. This enables you to create a realistic budget by knowing exactly how much you must commit to repayments each month.
Debt Settlement
A settlement company can be another effective way to eliminate your debt bills. Such a company will assess a person’s assets and income against his or her credit commitments and propose the best strategy for repaying them. The company acts as a mediator between you and creditors and attempts to negotiate a settlement of what you owe: often they can achieve a discount of 50 to 60% of what is owed. They can achieve this because the creditor receives this money immediately and can write the amount owed off his books. If a settlement can’t be reached, they will negotiate a payment plan with the creditor which you can manage.
Like consolidation, a settlement company will help you to eliminate your debt bills by creating a manageable repayment plan that will help to avoid penalty fees and the threat of bankruptcy.
Are you looking to find out how you can Eliminate Your Debt Bills? Visit our website to find more information and the best advice on ways to Eliminate Your Debt Bills for your needs.
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