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get out of debt

How To Get Out Of Debt

By: Michael Millington


There are many ways to get out of debt. With the multitude of choices in debt relief, it can be difficult to know which option is best for you. Debt can become so overwhelming that you might not think debt relief is possible. Regardless of how much money you may owe, you will always have a way to get out of debt. Each option for debt relief has positives and negatives, but they all have a way to help you get out of debt. The right way to get out of debt is usually dependent on your personal circumstances.

 

Get Out of Debt with Bankruptcy

Bankruptcy has the distinct ability to discharge all of the unsecured debt that you have. If you file for Chapter 7 bankruptcy, you might not have to pay back any money towards your debts. The reason for this is because of how a Chapter 7 bankruptcy works. During a Chapter 7 bankruptcy any asset that can be used to pay off the debts being discharged will be used. If there are no assets that can be used, the debts will still be discharged and your obligation to pay them will cease to exist.

The negative aspect of this method to get out of debt revolves around assets. While having no assets is not a desirable position under normal circumstances, having assets can be just as detrimental to your bankruptcy outcome. If you do have assets, they can be used to pay off as much of your debts as they can. You might lose things like money from your bank accounts, a car, and valuable items in your possession among other things. A bankruptcy of this type can leave you with much less than you started with.

The most infamous feature of filing for bankruptcy is the effect it has on your credit report. Most notably, a bankruptcy will stay on your credit report for at least seven years. During this time it will be extremely difficult to get any type of credit, which could prevent the purchase of a car or even a house. Some jobs might not hire you if you have a bankruptcy on file. Bankruptcy can help you to get out of debt, but you must be careful when considering it as an option.

 

Get Out of Debt with Debt Consolidation

Debt consolidation, to some, seems like a certainty in reference to debt relief. In short, debt consolidation utilizes one large loan to cover multiple, smaller debts. The benefit comes twofold. The first benefit comes in the decrease in payments in a month. Instead of making multiple payments to different sources, you make one payment towards your consolidation loan. When trying to get your finances in order, debt consolidation can not only help you get out of debt but also bolster your credit with on time payments and a brand new credit line.

While a debt consolidation loan might seem like a major problem solver, it is not as easy to garner as it may seem. The ability to get out of debt by means of debt consolidation hinges on your ability to get a debt consolidation loan in the first place. This will require you to have adequate credit. If your debt has already compromised your credit rating, finding a suitable debt consolidation loan (or finding a loan at all) might prove difficult. If your credit rating is too low, debt consolidation might not be the right solution for you.

If you are able to get a debt consolidation loan, making payments on it become crucial to your ongoing financial health. Having this extra debt payment would be ideal if you did not use any other form of credit for the duration of the consolidation loan’s payment period. However, if you do use other forms of credit before your loan is paid off, you might end up adding more debt than you had in the first place. Ironically, a debt consolidation loan might have the potential to add to your debt if you are not careful.

 

Get Out of Debt with Credit Counseling

Credit counseling has an advantage over other forms of debt relief because it doesn’t require a use of credit, nor does it add anything to your credit report. Credit counseling is exactly what it sounds like. In order to help you get out of debt, a counselor can advise you on how to proceed with your personal finances, debts included. With proper education, you can better handle your financial situation while maintaining control over your money and having direct involvement with your debt relief efforts. Best of all, many reputable credit counseling companies offer their services online and for free.

Credit counseling looks to educate you on how to solve your debt related issues. With that being said, the actual ability to get out of debt rests within you. Implementing what you learn from your credit counselor is your choice. Aside from the possibility to learn something new about your finances, credit counseling doesn’t offer you the ability to save money, completely discharge debt, or consolidate debt into one monthly payment.

There are also instances in which your credit counselor will suggest a debt payment program for some of your outstanding debts. While this is not mandatory to do your credit counselor might try to force it on you. These programs can help you get out of debt, but they will also show up on your credit report. If you have any qualms about utilizing these services then you should feel no obligation to use them.

 

If you have any questions about what you should do to get out of debt, look no further than Guardian Debt Relief for your answers. Our qualified debt relief professionals can advise you on the multiple ways you can get out of debt to see which one suits your needs the most. With a free consultation call, you can get this information obligation free. Get out of debt now with Guardian Debt Relief.

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