Welcome to My Personal Finance Journey! If you are new here, please read the “About” or “First-Time Visitor” pages to find out more about us. If you would like to receive free updates on articles like this by email, then sign up here or you can subscribe to the RSS feed. Also, check us out on Twitter or Facebook. Thanks for visiting! Keep on learning!
The following is a guest post by Amanda Green. Enjoy!
Being in debt is financially and emotionally stressful. Not only do you have to worry about how you are going to pay off your debt and make ends meet, but you also have to deal with harassing creditors. If you are tired of the chaos, it is time to take action.
There are many resources available to help you get out of debt and stay debt free. If you have good credit, you can apply for a debt consolidation loan. This will make your debt more manageable, and you can pay it off more easily. As long as you live within your means at the same time, you will eventually be debt free.
There are also debt relief agencies that help you get out of debt. Some of these agencies are non-profit, while others charge a small fee for their services. The agencies help you negotiate with creditors to stop collections activity, giving you immediate emotional relief.
Then, they help you create a budget that will allow you to pay off your debt over a period of time, and still live within your means. Once the debt is paid, you can use the budget to ensure that you do not get into debt again.
This is the best way to get out of debt. If you are not able to pay a portion of the debt to all of your creditors and still make ends meet, you can try another option. You can make one payment to your most expensive creditor each month until that debt is paid off. Then, you make a payment of the same amount to your next expensive creditor, getting that debt paid off faster. You continue in this fashion until all of the debt is repaid. The downside to this method is that you have to suffer through collections activity on the accounts you are not currently paying on.
Many people turn to bankruptcy whenever they find themselves in debt. However, unless you have more than ten or twenty thousand in outstanding debt, this is generally not a good option. Not only will your credit suffer, but you will also have to fight to keep your mortgage or car loan.
You could wind up with much less than you have now by filing bankruptcy. It is much better to use one of these methods to get out of debt. Click here for more information on how you can become debt free and stay that way.
How about you all? What resources have you used to help you pay off debt?
Share your experiences by commenting below!
***Photo courtesy of http://www.flickr.com/photos/paparutzi/2758346373/sizes/o/in/photostream/