Few simple options to get out of debt

There is no rocket science to getting out of debt if you know what your options are and how they can work for you.

09:04 18 February 2014

Budgeting is the one advice you will always hear when professionals talk about debt but budgeting does not always work, especially when you are so far into debt you find yourself praying for a miracle. There is no magic that you can conjure to save you from being ensnared by debt but there are practical things you can do to save yourself from a lifetime of torment. These options include Consumer credit counseling, settling credit card debt and declaring bankruptcy.

 

• Consumer credit counseling

This is a program that involves you contracting a firm to negotiate interest rates with all your creditors as well as  reduced payments. You will be required to make as single payment to the credit counseling company for them to distribute payments to all your creditors. This sounds easy and practical but you need to be aware that reducing your payments will stretch your debt to other companies for a period of up to five years, this means your period of enduring financial hardship will not end sooner. 

 

• Credit card settlement program

Settling your credit card can be done in the same way, through a company that will handle credit card repayments by negotiating a settlement fee that is much less than what the credit card company wants you to pay off. 

 

• Bankruptcy

Bankruptcy is a bitter pill for many people to swallow. The problem is not the option itself but rather the feelings of failure and shame associated with it. This is a last resort, something that could ruin the little bit of credit you have, but many people have survived bankruptcy and moved on to a better life free of debt.