As much as we all hate to admit it, debt is often just a part of life that we have to deal with, whether it’s good debt or bad. However, debt can quickly get out of control, which is why so many people also face money worries and are under a lot of stress and pressure. If your finances aren’t looking too hot, and you can’t see any way out of your debt, then you need to take action and find some help. Luckily there is plenty of help out there. Here are some common debt relief options for you to consider.
Credit Counselling
This is often your first port of call and is useful for before your debt gets too unmanageable. Credit counselling agencies are free and will go through all of your finances, advising you on how to reduce your debt, and manage a budget. However, don’t think that this is going to be a quick and easy fix; You need to listen to their advice, and stick to the plan that they give you, or you won’t reduce your debt at all, and will, in fact, likely incur even more.
Debt Management Plan
This is one of the most commonly suggested plans by credit counsellors. The aim is to reduce interest rates and fees, while also making lower payments each month so that your debt is more manageable. This is great, as it will reduce the chance of you missing payments, because you have to pay less, and so your credit score will increase. However, as already mentioned, this isn’t a quick fix; It can often take around five years to eliminate all of your debt, and if you drop out, your interest will go back up.
Debt Consolidation
Debt consolidation companies provide you with a loan to pay off all of your smaller debts so that you only have to make one payment each month. This is great if you forget to make all of your payments each month, and also usually reduces the amount of interest that you have to pay. However, these loans don’t actually pay off your debt, they just move it and make it more manageable. You also might not even qualify for one if your credit score has suffered, so they’re not always the best option.
Bankruptcy
If your debts are just too overwhelming and you don’t see any other way out, then bankruptcy is the final solution. This is a completely clean slate which eliminates most, if not all of your debts. This can give you peace of mind, as you will no longer have to worry about being hassled for years worth of debts that you have no chance of paying. Unfortunately though, the process of becoming bankrupt is incredibly expensive, and you might not be able to afford it.
There are so many options out there to help you with your debt and finances, so even if none of these options is right for you, someone will be able to help.
