Do you know how to get out of debt? Do you feel like you’re trapped under a mountain of bills? When it comes down to it you might just be frustrated as to how to get out of debt and in this article I’m going to show you three simple ways to get yourself out of debt.
The first option is to consolidate your debt. Debt consolidation works by combining your debts together under one loan. This way you won’t have to make 15 different payments but instead just one large payment making things a lot easier to manage. This option is also a great way to go if you want to cut out high interest credit card debt by combining it with your current mortgage or starting a second mortgage. By doing this you can get a lower fixed interest rate and on top that by combining the debt with your mortgage you’ll also get some tax benefits as well.
The next of the three debt relief options is to consider debt negotiation. This is the process of working with a third party company that will work with your creditors to help cut down the amount of debt that you owe. In some case these companies can cut as much as 50% of your debts down. In order to qualify for this type of program you need to have at least $10,000 in unsecured debt and you must also be facing some sort of hardship. These programs can get you out of debt but it may cost you as well, in fact some programs will charge as much as 17% of the total amount of debt in the program. On top of that any debt that in negotiated and that you don’t pay the full balance on may require you to pay a tax on as well.
Finally, the last option is a do it yourself debt settlement program called the debt snowball plan. This plan works by paying off your lowest balance debt one at a time and paying as much extra towards this debt while paying the minimum payments on all of your other debts. The benefit to this plan is that it allows you to focus on one debt at a time instead of all of them. On top of that this plan is completely free and will build your credit up over time. To learn more about this program check out the Dave Ramsey Total Money Makeover.
In the end these three plans can get you out of debt you just have to be willing to put the time in and stick with it to see yourself through.
- Get Rid of Debt – Debt Into Wealth (debt-consolidation-2u.com)
- 3 Ways in which you can accelerate debt reduction (2011taxes.org)