subject: Debt Relief Options – What Option For Debt Relief Is Best For You? [print this page] Debt Relief Options What Option For Debt Relief Is Best For You?
Financial debt is now a major concern to many millions of people in the West; clearing debts takes time and you will have to start somewhere. Debt relief is not something you can delay as your debts will always increase when nothing is done to eliminate them. To avoid the situation worsening it is important to manage your money carefully and eliminate debt as early as you can.
The first thing to avoid is being disturbed by the situation as this will hinder any positive action on your part. Also pay off your loans in a timely manner, to avoid them turning into larger debts, through higher interest rates, and excessive late fees.
Until you sit down and create a list of all your monthly expenditure, including everything you pay money out on a regular basis, you will not have a true picture of where all your income is going.
Cut the credit card purchases by introducing a habit of paying in cash as this will restrict your expenditure to the amount of cash you are carrying. Also there is the mental picture of the cash leaving your possession that helps you be aware of the amount you have left.
Start a repayment fund to help with your debt relief and keep aside some money for this fund and although initially the fund may seem to be of no use, it will gradually benefit you as it accumulates. Also, putting a limit on unnecessary expenses such as entertainment, until the time you have paid off your creditors, any excess money in the repayment fund can be used for this purpose.
No-one really wants to increase their mortgage repayments but many homeowners see their only option is to refinance their home which can work but just increases the amount you pay in the long term. Before you go down this route you must think about why you want this option when there are others that can be used.
An easy, but expensive in the long run method, is to take out cash from your credit card to pay towards your monthly bills, but this isn't the greatest idea. If re-financing your home does not work then you must consider filing bankruptcy, but this step should not be taken before you take specialist advice from a bankruptcy attorney.
Some people are able to bypass bankruptcy with the money in their individual retirement accounts (IRA) but such an act can seriously affect your financial future. Should you decide to use your IRA then be aware of how it can negatively affect your long term financial goals, and you may just reconsider this as a method of debt relief.
