Most of us have debts, but for some us, these debts can get out of control. Such debts may be impossible to pay off without getting support.
Here are just several ways in which you can save yourself from drowning in debt.
#1 Refinance and consolidate
Once interest rates start rising, it can be a real challenge to pay off debts. In such situations, you need to refinance. This involves paying off your current debt by taking out another loan at a lower interest rate.
Consolidating debt could be another option that involves paying off multiple debts with one loan. Not only could this similarly be a way of preventing rising interest rates, but it could also help you to keep track of your debts by turning them into a single monthly payment.
You can find debt consolidation loans through lenders such as Avant Credit.
#2 Negotiate with your creditors
Ignoring the people you owe money to is often the worst thing you can do.
Make a point of actively talking to your creditors and being honest about your situation – your creditors may be willing to negotiate a way of paying back the debt in smaller installments or they may even be willing to reduce the debt.
#3 Hire legal help
You may decide that you need a legal professional to help you negotiate with your creditors. Such professionals can help to organize debt settlements, which may involve reducing some of the debt.
They could also be useful when dealing with creditors who you think may not be respecting your rights as a debtor.
#4 File for bankruptcy
Bankruptcy is often the last result and is often viewed negatively for this reason, but in cases of extreme debt, it can be the wisest decision.
Whilst you’ll often have to sell assets and give away large portions of your income, your debts will be paid off in return so that you can start again with a clean slate.
When negotiating the process of bankruptcy, you may want to hire a specialist lawyer such as Rashad Blossom to help get the best outcome.
After all, some creditors do not take bankruptcy well and may still try to get their money back – having legal support could ensure that you’re not being unfairly treated by creditors.
#5 Get help from friends and family
Having to ask the people closest to us for financial support is never easy but it could be necessary for digging your way out.
Friends and family may be able to pay off debts to stop interest rates rising or to prevent debt collection agencies seizing goods – you can then pay the money back to them without interest and on more negotiable terms.
Just make sure that you do pay back your friends and family otherwise you could put strains on your relationship.
What are you doing so you don’t drown in debt?