Using credit card is not bad as long as you know that you have enough cash to pay back the debt in time. But it is completely useless to carry on a great amount of debt that you can’t pay off. But as it is said, one learns from his mistakes, and so here is a formula to get out of debt.how to get out of debt
To pay off the debt, you need two things, first a method to pay it off, and second a madness to achieve the goal set. But first decide upon the method; there are two methods, i.e. the snowball method and the Highest-interest first method.
For the snowball method, all you have to do is:debt snowball
Pay the smallest amount of monthly payment for all debt
Find out areas in your budget on which you can cut back to repay your debt.
Take the bill with the lowest amount and pay the minimum and the extra on that bill until it is paid off.
After you pay that bill, take the money you were saving for that bill to the next minimum bill and repay that.
Repeat the process until all bills are cleared
Highest Interest First
For the Highest-Interest first, do the same things that have been mentioned above but start off with the highest bill first. should-i-pay-the-high-interest-first
However, both the methods have their own advantages and disadvantages. The snowball method is somewhat more psychologically satisfying as you feel lighter after paying off some of your bills completely. On the other hand, the highest-interest first method frees you of your greatest burden first but if you get frustrated then the snowball method might prove motivating and will keep you going in the right direction.
Another useful tool might be this free excel spreadsheet debtcalcwhich enables you to calculate the total interest and how much you will end up paying. All you have to do is enter the type of credit card, its balance, and interest rate. Then type in your required minimum monthly payments and the amount you can allocate to it from your budget. Also, select the type of method you want to use, i.e. the snowball or the highest-interest first method and you will be able to see the result.
Keep in mind that during the whole process of paying back, keep in touch with all your lenders. Don’t try to avoid their calls or letters and don’t think they’ll go away simply if you ignore them. They will take their money back from you one way or the other. So its better to keep a regular track and even when you can’t repay them immediately, try to negotiate a deal. They are willing to do all that’s in their hands to bring back their money.
At the end, to carry out the repay process you need to have a drive, a madness. Do everything that you can, cut back on expenses, find a part time job, sell your car, sell other things in the house that you don’t require and use that money to repay your debt. Whatever it takes, just try to clear off your debt first keeping in mind that it is this intensity which will keep you from going into prison and will result in a debt free life.… more
For someone who ever experiences being trapped in debt, it is probably not a very good experience. Especially if you have no ideas about how you will pay off all of those debts and actually keep your sanity intact.
However, all of that could become a history for you when you know the answer, debt management company.
Debt management company is a company that will help you in dealing with your debts. They provide several services like analyzing all of your debts, handle your debts, even create a plan that you can follow to make yourself free from debts. When you asked for help to one of the debt management companies, you will need to deposit your money into their account, and then they will pay each of your creditors with the money you provide. However, you need to know that these debt management companies only dealing with an unsecured and non-priority debt.
There are so many reasons why you should use the debt management company service.
First, they will discuss your new payment plan with your creditors. For example, discussing the lower rate of interests or monthly payments. When you have a good debt management company, your creditors would likely have no problem in lowering your interest rates. However, you need to notice that every waived amount of your debt could be listed as an income in the tax returns that you have. Second, you have more time to spend with your families since your debt management company will take care of all the debt payments to your creditors.
Finding a good debt company could be tiresome. Especially, if you don’t know what kind of debt company that you’re looking for. The easiest way to do this is by asking your family members or your friends for their recommendations. As soon as they give you several recom
mendations, it’s your turn to check each of them.
Visit their offices or phone them and asking some questions will be a good start. Ask any questions that you want, starting from how they will handle your payments, how much they charge for the service, etc. If the debt management company handling your questions eagerly, you could consider to hire them. That’s because you need a debt management company that actually cares with your needs.
When you first started the business with a debt management company, you will notice that you’d likely have a bad credit rating. It usually happens when you stop the payment to your creditors as the debt management company suggest you, the creditors will drop a notice to credit bureaus because you didn’t pay. To prevent this from happening to you, keep paying the creditors until your debt management company ready to handle your payment.
Debt management company will be very useful for you if you don’t have enough time to do the payment by yourself, or you just want to get a lower interest rate. However, do your research first, and then choose your debt management compay wisely.… more