Everything That You Ever Wanted To Know About Debt Management

Bills are waiting for you in your mailbox and you know it

, time to think about debt management and banish the fear of walking through your mailbox every morning. Debts can be compared to termites; if you don't kill the colony, your house will fall to pieces. So if you find yourself in a hole where you spend more than you earn, here are some good advice that will help you manage your debt and eventually relieve you of it.

Let's start with that piece of plastic called a credit card because you pay the highest amount of interest on these loans. If you have several credit cards which are past due, start by paying off the high interest cards. You may have to rummage through your credit card statements and even speak to the customer service guys to find out which card is sucking most out of your funds. Pay these cards out while making only the minimum payment on the low interest cards. If you have cash left over after making the monthly payment, use it to pay off the principal on the high interest cards. This routine should be continued until the second card gets paid off.

The next in line are car loans, if you have a lot of late and missed payments on a car, you should sell it immediately; this is one of the worst investments and it will be glaringly visible in your credit report.

Now check on your bill for utilities, particularly those involving your basic needs such as electricity, water, food, phone etc. Pay off these debts, starting from the most important to the least, if you are able to.

If a lot of payments still need to be made, you might want to consider liquidating. A good way to secure a debt consolidation loan with a low interest rate is to consider a second mortgage on your home. Debts should start disappearing, if you do this.

Then, there are some with two home mortgages already, attempt to refinance both loans into one low interest mortgage. Even though low interest rates are to be found everywhere now, you need to act fast because you'll never know if it would suddenly increase tomorrow.

Finally, draw up a budget of your weekly or monthly expenditure, remove anything that is not absolutely essential and follow the budget diligently. If you don't think you can make the monthly payments, avoid credit cards and minimize your shopping sprees. This will prove detrimental to your credit score and you will lose any hopes of securing a debt consolidation loan.

These are basic debt management tips; there are several books and even professional who can help you to devise a strategy that will suit your requirements.

by: Erica Moore

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