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How to Eliminate Debt - Some Possible Solutions
Many Americans are simply swimming in debt. Are you one of these people? With a home mortgage loan, a car loan, store cards and credit cards? If you are then you are probably struggling each month to make your minimum payments, let
alone get ahead with any kind of savings plan. While your mortgage and your car loan are positive steps in the right direction (after all, you are building equity in good solid assets), it is the store cards and credit cards which will
give you the most trouble.
Credit card debt affects millions of people around the world - it is a financial epidemic! Individuals who suffer from too much credit card debt spend their time to pay off their expenses from the past, instead of planning for and
saving for the future. If this sounds familiar to you, it's time to start attacking your credit card debt and getting to the point where you are living debt-free.
Although it might sound like a great idea, living debt-free is much easier said than done. This is especially true for individuals who are suffocating under thousands of dollars of credit debt. Unfortunately, there is no "quick fix" solution for credit card debt.
The hardest part about eliminating credit obligations is getting rid of the cards. This is especially true for people who are more or less dependent on them. Let me assure you, however, that you are never going to get rid of your debt if you continue to spend. So pick one (and only one) credit card to reserve for emergencies only, get out the scissors, and chop the others to pieces.
Now, if you are already in financial difficulties, you may need to take some other steps to get on track. One of the best ways to lower interest rates and simplify your life is to take out a debt consolidation loan, assuming you can qualify. A debt consolidation loan allows you to pay off all of your outstanding credit card debt and now have only one monthly payment to worry about. And, best of all, you
will usually get a much lower interest rate for a debt consolidation loan than you had for your credit cards, saving even more money.
Another option for those in financial difficulty now is a Debt Agreement with your creditors. For those who are having difficulty making minimum payments, you would talk to your credit card companies and negotiate a payment compromise that allows you to control the amount of money that you pay every month. A Debt Agreement is a last resort prior to filing for personal bankruptcy, and should only be considered in the most extreme of circumstances. And, the credit card companies may always reject your proposal.
Some examples of the kinds of arrangements that are put in place are:
- Payment of less than the full amount of all or any of thedebtor's debts,
- A moratorium on payment of debts for a period of time togive the debtor time to gather funds,
- A transfer of property from the debtor to the creditor as full or part payment, and
- Periodic payments of amounts out of the debtor's income to creditors either collectively or individually.
Hopefully, you will be able to bet back on your feet without taking the extreme measure above. So, to avoid this type of problem, take control of your credit card debt today!
Petra Shulde is the owner and operator of Fixn Debt, Inc., a leading Internet portal for debt information. For more debt information and resources, be sure to visit:
