Photo by Frederick Warren
Originally Posted On: https://www.liveson.org/no-debt-no-stress-your-options-for-financial-serenity/
Being stuck in debt is just about every person’s worst nightmare. With a cloud of debt hovering over you, you can’t do many things that a normal person should be able to do. Buying a car and purchasing a home are just two of the things you might not qualify for with a ton of debt and bad credit.
Being tied down by debt isn’t a physical restraint, but at times, it feels just the same. How many years have you let debt tie you down? How many years are you willing to continue living this way?
Imagine a world where you can roam freely with no debt. Financial hardship is one of the biggest setbacks, but financial freedom is one of the best feelings of liberation. If you’re ready to cut your ties with your debt, then continue reading below.
Here, in our guide, we discuss several debt solutions that might work well for you!
Put Down More Than Necessary
Paying off bills can take time. However, the longer you take to pay off your debt, the more expensive it is. Each time you take out a loan, spend money on a credit card, or purchase an item using a payment plan, you’re paying interest.
The more time that goes by with that debt still not paid off, the more interest that’s building. To pay off your debt and stop interest from incurring as quickly as possible, you need to put more money down towards the bill or debt than what’s due.
You do, however, want to make sure that any extra payments made are going towards the debt and not the interest. You should also make sure there’s no penalty for paying off a loan, such as a mortgage, early. If you’re in the clear, then come up with a bigger payment than what’s due and one that you can afford.
Plan Out a Budget to Stick With
Think of the reasons why you’re in debt in the first place. Is your debt from outstanding medical bills? Is your debt from your student loans, car loans, and a mortgage?
Is your debt from credit cards that you racked up? If the debt you’re in is from credit cards and payment plans taken out at stores for large items, then the first thing you need to do is stop buying anything that’s not a necessity.
The next step is to plan out a budget and stick with it. Calculate how much money you bring in each month, how much you pay in regular bills each month, and then how much you can afford to set aside for your debt payments.
Once you create a budget, write it out and have it in a place where you’ll see it every day. Then, make sure you stick to it. If you have to put off buying that new flatscreen television for a year or so, then this is what you need to do.
Work Out Payment Plans
Working out payment plans with stores because you want to purchase an item but don’t have the money up front isn’t an ideal situation. You should avoid this at all costs. Instead, save up the money yourself and then make the purchase when you have the amount in full.
What you can work out payment plans for, however, is when you can’t pay off a debt bill because you can’t afford the monthly payment. Speak with your debt collectors or with your lenders and ask about working out some type of payment plan to help you pay off your debt without having anything else go into collections.
File for Bankruptcy
Filing for bankruptcy shouldn’t be your first option, but for some, it’s the only option they have. Filing for bankruptcy helps people because it’ll either diminish the debt or help people pay it back under the protection of the bankruptcy court.
Do keep in mind though, that not everyone qualifies for this, and there are several different bankruptcy categories that you can fall under. It’s better to do your research on bankruptcy before heading down to the courthouse and filing for it.
Liquidation and reorganization are the two more popular categories, and you’ll most likely fall under one of these two.
Take Out a Low-Interest Loan
Depending on what your debt is, you can also consider taking out a low-interest loan. Before deciding on who to take out a loan with, do be sure to do your research. For example, if you live in Texas, then you’ll want to find out who offers the best personal loans in Texas.
This is a good option if you’re able to take out a personal loan with a lower interest than another loan that’s causing you debt. What you’ll then do is use the low-interest loan to pay off the other loan with a higher interest. This way, you won’t have to worry about paying back as much money from interest incurred.
Are You Ready to Have No Debt?
Landing in debt is similar to landing in a pit of quicksand. It happened unexpectedly, but once you found yourself in it, it was nearly impossible to get out. Luckily, there are some answers.
This guide above might not be able to free you from a quicksand pit, but these tips listed above can help you live a life with no debt. Try one, or try a few!
For more posts similar to this one, be sure to visit us regularly!