Debt Relief: 5 Options to Get You Out of Debt - Debt America

Credit Card Debt Help

If you need help with your debts, you may not know what to do or where to turn. You are not alone. The rising amount of debt in this country has many people feeling confused and stressed. Know you have options.

If You’re in Debt, Get the Help You Need 

Sometimes when people find themselves sinking in a sea of debt, they panic. Instead of bringing their spending under control, cutting back on luxuries, committing to a budget, and paying off their debt, they just continue to spiral downward. Or perhaps you’ve recently lost your job, had a car accident, and wound up with a pile of medical bills.

However you wound up in debt, know there are steps you can take to help dig yourself out. You can:

·      Develop a realistic monthly budget and stick to it

·      Establish a payment plan for how you will get out of debt

·      Review your finances to see where you may have untapped money available

·      Talk to your creditors and work out a better deal

·      Protect yourself from collectors by knowing your rights

Taking Action to Help Yourself Out of Debt

Before you pay for professional assistance with managing your debt, there are actions you can take to help yourself.

· Develop a monthly budget. Yes, you can seek the assistance of a professional to help establish you monthly budget. However, if you have the patience and motivation, you can do it yourself. Remember to be realistic. Review your income and expenses. Consider your fixed expenses (such as rent, car, and insurance) and your variable expenses (such as clothing and food). Now consider how much is coming in versus how much is going out. Is there any money remaining? Where you can trim costs? Your goal should be to take care of the basics.

· Manage your secured loans. If you own a home and a car, the asset secures your loan. If you stop making payments, you could lose the asset. Before this happens, talk to the finance company or bank and work out other arrangements. Otherwise, you may want to sell the asset and pay off the debt before it is repossessed or foreclosed.

· Seek financial assistance. While the last thing many people may want to do is to borrow from their future, if you have a 401k available to you, this might be an option. Some plans allow you to borrow as much as 50% of your vested balance. However, there may be restrictions regarding the purpose. Generally, you repay the loan along with interest for a set period. The benefit is that the interest goes into your account, so it’s like an automatic savings. Keep in mind if you don’t repay, you have to pay taxes and an early withdrawal penalty. So you may want to consider asking family and friends for financial assistance instead.

· Speak with your creditors. Just by calling your credit card company, you may be able to lower your interest rate. Or if you are having trouble meeting your monthly payment, try to work out a modified payment plan. This can reduce your payments to a more manageable level. Don’t wait until you are in collections before you take action.

· Consider refinancing. If you have a major loan – specifically a home loan– you may want to investigate refinancing your current mortgage to take advantage of a lower interest rate. It may mean extending the life of the loan; however, if it enables you to meet your monthly debt level, it may be worth it.

· When debt collectors call. TheFairDebtCollectionPracticesAct (FDCP) regulates debt collection behavior. The Act covers all personal, household, and family debts. Collectors cannot harass or threaten you, make false statements or give false information, or engage in unfair practices. Know your rights.

Your good credit influences your future purchasing power. If you have unpaid debt that is dragging your credit score down, you need to take action immediately. Don’t wait until you are in a desperate situation to ask for help with your

If you still need additional assistance managing your debts, consider obtaining professional debt relief. Don’t let your debts limit your ability to enjoy life.