Deal with Debt & Stop Being Haunted by Money Problems
You are sitting in the living room, staring at a pile of credit card bills. Actually, you think that they may be credit card bills, but in fact you are anxious at opening the envelopes so you’re not entirely sure. A visit from the process server is inevitable if this continues. You know you’ve got yourself into financial difficulty.
It may seem a daunting if not impossible task to solve this problem. Indeed, fighting out of debt can be a long and stressful process. But it is possible to pay back what you owe and get back to living a healthy and happy lifestyle if you address the issues and take action starting today!
Cut your Spending Immediately
The first step towards dealing with debt is to avoid getting yourself even further into it. Take a careful look at your finances, and look for ways to cut your current spending down. Eliminate things that are not necessities, to help you save some money that can then be used to pay down some of your debt. It’s also a good idea to cut down on your use of credit cards, as those can lead to even more debt down the line. If you must use a credit card, look for one with no annual fee and a low interest rate.
Consider a Personal Loan
If you are making payments on a credit card with a high interest rate, you might want to consider applying for a personal loan. This can help to lower monthly payments, and may reduce the amount of interest you have to pay overall.
One Step At A Time
The psychological effects of dealing with debt can be devastating. If you are paying back debt to several places at once, it may feel as though you are working 24/7 and barely making a dent in what you owe. To combat this, consider focusing your efforts on paying back one debt at a time. You’ll need to continue making the minimum payments on your other debts, but this method allows you to eliminate individual debts more quickly, which can help you to feel as though you have accomplished more.
Look For Alternative Arrangements
There are several methods that you can use to consolidate or manage how you pay back your debts. The first method is to create a debt management plan. This plan is created with the help of a financial company, and is an agreement between yourself and your creditors that allows you to change how much you pay during a given time period, or to change how long you will be paying towards your debt. However, your creditors must agree to this plan, and they have the right to refuse your proposal.
Consider an IVA (Individual Voluntary Arrangement)
Another method to consolidate or manage your debts is an Individual Voluntary Arrangement, which also involves creating a plan for paying back your debts that is then handled by an outside company. In this case, an insolvency practitioner manages your payments, which you make directly to them. The practitioner then divides your payments among your creditors.
“After you pay back your debts, it’s important to try to improve your financial strategies to avoid falling into debt once more. Create a budget and stick to it. It’s also a good idea to start building a savings account, even if you can only do so little by little.”
Are you struggling with debt? Speak to someone if you are in need of assistance. Useful links can be found HERE
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