subject: Debt Management - What Are Your Options To Get Out Of Debt? [print this page] Debt Management - What Are Your Options To Get Out Of Debt?
Most people in debt want to get out of it. You must develop a better understanding of why you got into debt in the first place if you are ever to live debt free.There are two main reasons why more people are finding themselves in debt these days than ever before. Firstly, the have-it-all culture of western societies means that people are more willing to take on debt to finance their lifestyles. As a result, they are more comfortable with it and take on a disproportionate amount relative to their ability to pay compared with former times. And this is socially acceptable because there is no longer any stigma to being in debt.Secondly, debt is now very easy to obtain. Years ago being in debt was frowned upon, except for a mortgage. There was a stigma attached to being in debt. Paying it down was called the "never never" because accruing interest compounded the capital making it very hard to pay off, ever. And taking out a loan was very difficult to do too. You had to complete long, detailed forms and then have a face to face interview with a credit lender before you could get a loan. These days a loan can be applied for over the phone in as little as 15 minutes, with the lending company filling in all the forms for you.The ease of getting a loan and the changing attitudes to debt have created a consumer debt society to the extent that being in debt could be regarded as the economic equal of obesity. The fact is, it takes a lot of determination over the long haul to get out and stay out of debt.Whilst part of the road to eliminating debt is to admit when you need help, you have to shoulder the responsibility of following the debt management plan. Professional help can cost but sometimes struggling to pay off you debts on your own just does not work and this is where credit debt companies can help.Debt settlement helps you in reducing your credit card and other unsecured debts. It is the end result of debt negotiations, in which your creditors agree to accept a significant one off lump sum, payable now, in lieu of all future repayments. This can reduce your total debt repayments by 40% or more. Credit companies are happy to accept debt settlement plans if they believe that a debtor may otherwise default and file for bankruptcy, in which case, they would get nothing.Lump sums for debt settlement repayments can be found by taking out a second mortgage or re-mortgaging, but only if the interest rates are preferable to those with the original creditor! This debt management strategy can be useful during times of low interest rates or when there is sufficient equity built up in a property that re-mortgaging makes economic sense. However debt settlement can harm your consumer credit score and should be used with caution.Debt consolidation is a different way to eliminate credit card debt which usually does not affect your credit rating. Consolidating debts usually means applying for a lower-interest financial loan to cover higher-interest obligations. The debt loan consolidation firm works out a deal with each and every lender in an effort to figure out an appropriate debt management repayment schedule for you. However you must make certain that you make every repayment because consolidated debts are usually secured on some valuable asset such as your home. So you could lose your home if you fail to meet your consolidated loan repayments.Debt reduction is another way of tackling your outstanding bad debts by negotiating down your current debt to get a more affordable repayment. Credit card debt reduction solutions are typically targeted at debtors who feel they are trapped with hope of paying off their debts. These people may also benefit from credit counseling, which involves negotiating with credit card providers to reduce your interest charges.If you are in debt, there is a lot of debt management help online and offline. Choose your source, get help and follow it. It is possible to get debt free.
