In 1975 I was issued my very first credit card. It was from Sears and I charged a sewing machine as a gift for someone. I remember specifically how happy I was at the time. You see I was less than a year out of high school and while most of my friends were working [...]
Debt – Managing, Organzing, Negotiating, Loans
Getting rid of debt can lead you towards the stress-free life you are looking for. If you have bad credit there are still many ways that you can successfully consolidate your loans. Debt consolidation can be a favorable way of repairing your financial situation and managing multiple debts. However, moving all your debt into one pile does not exclude you from the responsibility of paying the balance. A debt consolidation program can give you a way to pay multiple bills with one monthly payment. Ultimately, debt consolidation will not help most people. you will need to begin to address your behavior as a borrower first. This process can be time-consuming but very beneficial. Here is a list of the first steps you will need to do to begin a debt free style of living.
Managing and Organizing Your Debt
Knowing how much money you owe to your creditors is the first step in the debt free process. If you calculate how much money you owe plus the interest rate that you are being charged, you can get an exact figure. Write down the interest rates that each creditor is charging you as in most cases they will be different. Knowing who your creditors are and how much debt you are actually carrying can be an important step to alleviating stress.
Calling your Creditors to Negotiate Interest Rate Arbitration
In many instances terms for satisfying a debt can begin with a phone call to your creditors. You can do this by yourself or hire an independent third-party company to negotiate for you. Contacting them yourself is always best. The goal is to negotiate a lower interest rate from each individual creditor that you owe. In most cases creditors are willing to negotiate interest rates, sometimes by almost half if they believe you have incurred a financial hardship. In many cases they can also delay payments for a period of time to help you get back on your feet. If they are not willing to negotiate, it is not the end of the world. Tax debt settlement can be another issue and , may require the help of a tax debt attorney. The IRS is not someone you want to owe. Take care of tax debts as soon as possible.
Getting a Loan to Pay off Your Creditors
Once you have spoken to all of your creditors you could now seek a loan which will help you with your bad credit consolidation. This loan will help you get the money you need to pay off all your unwanted debt. The goal is to pay off all your creditors with one loan. This will give you the advantage of making one monthly payment at a reduced interest rate. Securing these loans can be a lengthy process. You will have to prove to the financial institution that you can pay back the loan you are trying to acquire. In bad credit situations banks will want some sort of security before they give a loan approval. There is no shortage of institutions willing to write a debt consolidation loan. The question that you need to answer for yourself, is, will it work for my family? Again failure to address your own behavior as a borrower will result in you accruing more debt. There are better ways to live debt-free or to become debt-free than debt consolidation loans.
Planning to Pay Debt Off Yourself
We think paying off your debt yourself is the better option. This will be the most time-consuming option. This will require more discipline from you. It is not easy, let’s agree on that right now. However the plan is simple. the first step is for you and if you are married you and your spouse to decide that you will not add a single penny more of debt to the debt you have now. That means all credit cards cannot be used. That means if you don’t have the money to buy something, you do not buy it. That means setting up a budget for your family that will direct every dollar to its destination. That means having an emergency fund available for family emergencies that will inevitably occur. That means establishing a debt plan to pay off all your debts yourself. For the time being your home mortgage is excluded. However, once you pay off your other debts you will find that paying off your home mortgage will be a much more realistic option for you and your family . If you would like to take this approach to paying off your debt we invite you to read more on our site.