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The objective of this article is to help you achieve debt relief. I know that facing up to big debt is not easy. You may be in debt for reasons over which you had no control. Maybe you were laid off or became seriously ill. Or perhaps you just didn't use your credit cards wisely. But none of this matters. The important thing is for you to find debt relief so that you can get your life back on track.
Where you stand financially?
The first important step is to take stock of your financial position. You need to compare what you're spending monthly to your monthly income. The results may shock you. You may find that you have been spending far more than you earn. If this is the case, you need to reduce your spending so that you can meet your financial obligations. If you are able to reduce your spending to, say, 20% less than you earn, you could use the difference to start paying on your debts. If you can't, then here are four other proven ways to achieve debt relief.
A debt consolidation loan
One way to find debt relief is by getting a loan and consolidating all of your debts into just the one. If you owe $10,000 or less, you may be able to get an unsecured loan – or signature loan – from your bank or credit union to pay off all your other debts. If you owe more than $10,000 you may have to get a secured loan in the form of a second mortgage or home owner's equity line of credit.
The plus of a debt consolidation loan is that you will have just one payment to make a month and it should be lower than the total payments you are currently making. You will also have more time to pay back the debt, probably 7 to 10 years. Of course, that is also a negative as 10 years is a long time to have to live with that loan.
Consumer credit counseling
Most cities have consumer credit counseling agencies. If there is not one in your area, you can find one online. In either case, you work with a counselor who will review your finances and help you develop a plan to pay back your debts. This is a form of debt consolidation in that you should end up with a payment plan where you send one check a month to the credit counseling agency, which then pays your creditors. You should be able to complete your plan in 5 to 7 years and become debt free – so long as you don't run up anymore debt during those years.
Borrow money from your retirement plan
If you have a retirement plan such as a 401(k), IRA or a Roth, you could borrow money from it to pay off all your debts. I know this would be painful because you’ve worked hard to accumulate money for your retirement. But given the state of the today's economy, you're probably earning less than 5% on your retirement funds while paying 18%, 20% or even more on your debt. You'll actually save money by paying off that debt and you’re paying yourself instead of a bank.
A debt settlement program
A debt consolidation loan, consumer credit counseling and borrowing from a pension plan have one thing in common: they do nothing to reduce your debt. In comparison, a debt settlement program such as what we offer can get your debts slashed by thousands of dollars and help you become debt free not in 5 to 7 years but in 24 to 48 months. We've helped numerous families become debt free through debt settlement and can likely help you. Call our toll-free number or fill out our form for a free debt analysis so we can start helping you find debt relief.