Winding up in debt is inevitable for most people. May it be a last minute expense that you didn’t see coming, or an unexpected medical bill that you had to shoulder — anything can happen, and there are countless reasons one can accumulate a high amount of debt.
Although it’s a part of life, most people dread it to the point that filing for bankruptcy becomes their worst nightmare. What tends to happen is they avoid it, even though it would be the best option for them when in the face of major debt. This is understandable, since technically, a Chapter 7 bankruptcy will appear in your public record for a decade. Take note that it isn’t a crime, it’s a part of surviving.
Here are some ways on how to help you have a fresh start this 2020 by paying off your debt:
Quit making more debt
It’s imperative that in managing your debt, you have to stop creating more debt in the first place. This won’t eliminate your debt, and will insteaed eliminate more problems for you in the future. Maybe freeze your credit card, so you can stop yourself from spending more until you pay off existing loans.
Debt consolidation
Debt consolidation is a practice where all the different debts you have are combined, so that you only have one payment to make each month. The process involves you taking out another loan to pay off all your debts. Whether it’s different credit cards carrying different interest, or something more, this practice will make it easier for you to manage and restructure your payment method. To consider debt consolidation, one should be looking at its ability to cut the total amount of debt, which also eliminates additional interest.
Debt Settlement
If you find yourself up to your neck in debt, there’s a method called Debt Settlement. It allows you to pay back a fraction of the amount you owe to settle your debt. For example, if you owe a creditor $9,000, a proper negotiation can bring it down to $2,000 — depending on the agreement. You can do this alone, but nothing is guaranteed, but you are always free to seek legal help to better success rate. Debt settlement attorneys have the ability to negotiate with your creditors. They can also provide advice, or offer a better alternative on how to pay off your debt. There are strategies that you can employ, such as implementing a payment plan, debt consolidation or another refinancing strategies. You have to be mindful when looking for a debt settlement attorney in Salt Lake City, California, or elsewhere in the world. It’s good to check for reviews, and go set an appointment with the ones who you feel comfortable with the most.
Plan to rebuild your credit
Mistakes in finances are inevitable, but the good thing is that it’s possible to rebuild your credit. The important thing is to plan and visualize your goal. First off, know where you stand financially by checking your credit report. This will give you the whole picture of your spending, and give you clues on where you can improve or which angle you can solve first.
Secondly, make sure to pay your bills on time. You have to learn from your mistakes, and pay your bills before the deadline. You want to avoid any hits, especially reports that you’re late on a payment, or worse, you missed one.
Third thing to note is getting a co-signer. Co-signing with someone who has an outstanding credit record can qualify you for a loan or credit card. Just make sure that the co-signer understands the risks.
Fourth tip is applying for a secured credit card. If you’re planning to rebuild your credit, it’s most likely that qualifying for an unsecured card will be more of a challenge than if you apply for a secured credit card. With a secured credit card, the deposit amount is most likely the same as the credit limit. The goal is to build a spotless record which will then allow you to be approved for an unsecured credit card.
Apart from the above-mentioned stuff to consider, it’s always an option to also seek professional advice. There are debt counseling and consultation appointments with lawyers that are free — one should not be ashamed of wanting to understand the law. Especially when it concerns credit scores and finances, things that can impact one’s quality of living in the States, you should go out there and talk to the experts. The more you know, the better, right?
