Living with large unmanageable debt can feel like you are lugging a very heavy bag with you all the time. Anywhere you go, the debt is on your mind. It is hard to forget when debt collectors keep calling you to make sure that you remember. If you are simply no longer answering numbers you do not recognize – there is something that you can and should do.
Free Consultation with a Debt Specialist
There is nothing as great as peace of mind knowing that you have someone looking after you and helping you find your way out of a debt maze. You can have a free debt consultation with a debt specialist. They will listen to your current situation and suggest a debt solution that will help you reduce debts and perhaps eventually even become completely debt free. While there could be a multitude of alternative debt reduction strategies. Not all solutions will be right for you. Here are some possible alternatives you may wish to investigate.
Can a Debt Consolidation Loan Help?
It is rare that taking on a new debt can help you become debt free. The problem with debt consolidation loans is that they are difficult to qualify for. If you are already ‘robbing Peter to pay Paul’ you are unlikely to qualify for unsecured finance. Lenders who offer consolidation loans only do so to people who are completely on top of their financial obligations. f you have a property with equity, then perhaps a secured consolidation loan ,may be possible. This can allow you to put together all your unsecured debts into your mortgage so that you can pay a home loan rate on credit card debt for example. While your debts will not be reduced, your monthly payment obligations should come down significantly.
Informal Debt Negotiation
You may try to contact your creditors to negotiate your debts informally. If you explain your reasons for the current debt problems and tell them what you are doing to recover, they may agree to a temporary reprieve in payments (ie. a payment holiday)or to a temporary payment reduction. For example if you have lost your job and are in the process of finding a new one a credit card provider may agree to reduce your set monthly payments for a few months until you are again back on your feet. There is no guarantee of reaching agreement and if you do not live up to your part of the bargain the lender may withdraw all together from further negotiation. However this is the cheapest available debt reduction strategy and one that you could implement by yourself.
Formal Debt Agreements
Formal Debt Agreements are also known as Part 9 or Part 10 Debt Agreement. These allow you to put all your unsecured debt under a single umbrella. You will receive professional help to negotiate your out of control debts with your creditors to an affordable periodic payment. There will be no penalty interest to pay. In fact the debt will be interest free. Debt Collectors will leave you alone. AT the end of a set period you will come out of this agreement debt free.
Bankruptcy
Sometimes your creditors will refuse to make a deal and you may feel that there is simply no choice. You are unable to meet your debt obligations no matter what you do. Bankruptcy allows people who are insolvent to declare themselves unable to pay their debts. A bankruptcy trustee will be appointed to administer your bankruptcy. Most of your assets will be sold up to pay down your debts. There will be some professional and personal restrictions placed on you during the bankruptcy period (usually 3 years). However at the end of bankruptcy you should be able to start a new, debt free chapter in your life.