Getting Out Of Debt

In the current financial climate, debt is a word that we hear almost every day and many are searching for best methods for getting out of debt. Living in a nation of credit based consumption, it really was only a matter of time before the debts came to a head. For some it crept slowly up on them and for others it was a short sharp slap in the face.

Many who previously sailed along without debts or any financial worries for that matter are losing their jobs and being faced with the nightmare that is debt problems for the first time in their life.

The unfortunate problem with getting ourselves into debt is that it is easy to get there but very difficult to get out, a bit like losing weight, easy to put on, hard to lose. However, it is very possible. The main factor involved in successful debt management is to keep up the monthly instalments of your credit cards or other creditors and make sure the payments come first before any luxuries or unnecessary costs.

For some that maybe easier said than done. If this alone is not helping you get out of debt, your next step should probably be debt consolidation. This is the process of combining all of your debts together and paying one monthly instalment. This usually means getting a better rate of interest, and over a longer period of time with more affordable monthly payments.

Before embarking on debt consolidation, you must destroy all traces of your credit and store cards. There will be no more purchasing on credit and every single debt will be included in your debt consolidation. That way, you can be sure that everything is being accounted for. Once you have consolidated your debts, the payment for the loan will be paid on time every month and all other bills will come second. Do not take a loan if you cannot afford the instalments, that is a sure way to increase your debts further. Write up a balance sheet with all your out-going costs and income, and work out exactly what you can afford to pay.

Another method for getting out of debt is by negotiating your credit payments. Most creditors will be happy to help you pay your debts, where you may extend the period of time for repaying with smaller payments each month. Most companies will offer you a payment holiday, however, you will need to make up for this break. This type of method is more appropriate when your struggles are temporary.

Finally, if there is absolutely nothing else that will work to get you out of debt, you can declare, or have yourself declared bankrupt. During this process, you will lose everything you own. Any assets of worth will be taken to contribute to the debts. After this, it will be difficult for you to get credit for a long time, however if this is the only way out, you can cut your losses and make a new start.