Debt affects millions of people today. Bankruptcy's are on the rise and more and more people are struggling to stay afloat.
The effects of bankruptcy can be far reaching and can impact people's lives long after the bankruptcy has actually ended, making it difficult to obtain credit and even spoiling many employment opportunities when companies credit check potential employees.
For some, it may be their only option but for many, there may still remain a chance if they take action.
Consumers in general now carry a huge amount of revolving debt on credit cards and 47% of people who don't pay off the full balance each month pay only the minimum balance, a terrible strategy for paying off your credit cards and a very expensive one.
It seems to be almost the norm in our culture to think that we are owed something and that we should be able to get the things that we want as soon as we want it. The banks and credit card companies have spent allot of money trying to convince us of this. That way, they can keep us owing them money and working for them forever!
It is time to take a stand and make a difference in your life and to help you do that, here are the 7 top tips to help you become debt free.
Tip 1. Put it all down on paper. Make a list off all of your debts. It sounds like an easy task and it is. You need to write down your creditors names, total amounts outstanding and monthly payments. Be prepared as it can be a bit scary especially if you haven't listed them all before. But don't worry; you'll get on top of it.
Tip 2. Work out which debts to focus on. One good strategy is to only pay the minimum payments on all of your debts except one which you deem to be the most pressing. (Normally the one with the highest interest but it could also be pressing for other reasons.) You pay as much as you can to that one until it is paid off then you add the payments for that one to the next most pressing debt. This can significantly shorten the amount of time it takes to get out of debt.
Tip 3. Cut up those credit cards! Don't just put your credit cards away somewhere and defiantly not in your wallet. Cut them up so that you won't be tempted to use them. When you pay each one off, contact the company and cancel the account. Don't fall back into the same trap!
Tip 4. Check out your credit report. It's worth making sure that no companies have put black marks on your report. If they have and it's a mistake then you should contact them and get it fixed. If it is not a mistake, you should still contact them, try to pay the debt off and see if they will remove the mark. It is worth it down the line to have a clean credit report.
Tip 5. Work out a spending plan. Spendig plan or budget, they are both the same and the benefits of working out a realistic plan can be huge. Apart from the benefits of knowing exactly where you stand, you will know how much you can spend without feeling guilty.
Tip 6. Think carefully before switching loans. More specifically, if you are thinking of switching from unsecured debt to secured debt (secured on your house for example) then think very carefully about it. You should only ever do this as a last resort as this will up the severity of the possible consequences for you.
Tip 7. Don't do it alone. There is plenty of help and advice available to you; you just have to look for it. Talk to debt charities, I guarantee that they won't be surprised or shocked no matter how bad your situation is. They will however be able to offer good and helpful advice.
About the Author:
Debt Management can really help you to get back on your feet when you are in debt trouble. To find out more, click the link above. Discover how to negotiate with your creditors and legally write off your debts. The fastest way to becoming Debt Free.
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