Ten Ways to Get Out of Debt
1) Use your Assets
If you have assets with some significant equity, such as a home or a car you may be able to use these to get control of your debt. For example, you could get a loan on your home sufficient to pay off your debts. You could be saving a considerable amount of money on interest if you pay off high interest credit card debt in return for lower cost debt.
If you have a car, consider selling it, paying off your debts and buying a cheaper car. Be careful though! Your don't want a "cheaper" car that will cost you a fortune in repair costs.
2) Get a Second Job
Use the money from this job to only pay off your debts. List your debts noting the interest rates. Pay off the debts with the highest rates first and work your way down the list.
3) Put your Credit Cards on Hold
One of the best steps you can take to get out of debt is to immediately stop using credit cards. At the very least destroy all your cards keeping just one card for emergencies.
4) Set up a Repayment Plan
Cut back on your expenses and/or use freed up cash to pay down your debts. Pay off the debts with the highest rates first and work your way down the list.
5) Get a Consolidation Loan
A consolidation loan can make lots of sense. Get a loan to pay off all your many debts and have just one payment to make. The new loan usually has a smaller payment and a lower interest rate.
6) Use the Services of a Credit Counselor
There are two types of credit counselor, for profit and "nonprofit". We do not distinguish between the two as they provide similar services and both charge a fee. Credit counselors can assist you in acquiring the discipline you need to get control of your debt. Be careful! Many people do not fully understand all the ramifications involved such as:
Impact on your credit rating
The credit bureau will record that a plan is in place.
Are your payments too high?
Your payments should be high enough to significantly reduce your debt but not so high that you have "no life". If you do not have money left over at the end of the month to pay for the small pleasures in life you may find that you end up defaulting on your payments.
For how long should you pay?
Most experts feel that the term should be three to four years. It is a stipulation in the new Bankruptcy Reform Bills that the term be 3-5 years. Terms longer than this have a very high failure rate, because people cannot see a "light at the end of the tunnel".
7) Informal Proposal - Payments over time.
In some cases you can make a proposal to your creditors to set up a payment plan that will allow you to pay your creditors in an orderly way and thus help preserve your credit rating. This operates similar to a debt consolidation loan except you do not borrow the money to pay off your creditors.
8) Informal Proposal - Lump sum payment.
You may be able to pay less than 100 cents on the dollar. For example, a relative may be willing to pay a lump sum to the creditor of say 50% of the amount owed in order for the balance of the debt to be written off. Your creditors will be more willing to accept this offer rather than have you file Chapter 7.
This works best when there are few creditors.
9) Chapter 13 Bankruptcy
You are probably a good candidate for Chapter 13 bankruptcy if you are in any of the following situations:
1. You have a sincere desire to repay your debts, but you need the protection of the bankruptcy court to do so. You may think filing Chapter 13 is simply the "Right Thing To Do" rather than file Chapter 7.
2. You are behind on your mortgage or car loan, and want to make up the missed payments over time and reinstate the original agreement. You cannot do this in Chapter 7 bankruptcy. You can make up missed payments only in Chapter 13 bankruptcy.
3. You need help repaying your debts now, but need to leave open the option of filing for Chapter 7 bankruptcy in the future. This would be the case if for some reason you can't stop incurring new debt.
4. You are a family farmer who wants to pay off your debts, but you do not qualify for a Chapter 12 family farming bankruptcy because you have a large debt unrelated to farming.
5. You have valuable nonexempt property. When you file for Chapter 7 bankruptcy, you get to keep certain property, called exempt. If you have a lot of nonexempt property (which you'd have to give up if you file a Chapter 7 bankruptcy), Chapter 13 bankruptcy may be the better option.
6. You received a Chapter 7 discharge within the previous six years. You cannot file for Chapter 7 again until the six years are up.
7. You have a co-debtor on a personal debt. If you file for Chapter 7 bankruptcy, your creditor will go after the co-debtor for payment. If you file for Chapter 13 bankruptcy, the creditor will leave your co-debtor alone, as long as you keep up with your bankruptcy plan payments.
8. You have a tax debt. If a large part of your debt consists of federal taxes, what happens to your tax debts may determine which type of bankruptcy is best for you.
10) Chapter 7 Bankruptcy
If these alternatives will not work for you, bankruptcy may be the only way for you to get a fresh start. Chapter 7 Bankruptcy offers a quick solution to getting out of debt.
For more information, visit www.mybankruptcycounseling.com
Nathan Dawson writes for http://www.mybankruptcycounseling.com
 Google News Updated : Tue, 07 Oct 2008 08:49:19 GMT Sri Lanka: international probe called into killing - International Herald Tribune
International Herald Tribune - AP COLOMBO, Sri Lanka: Sri Lanka's top opposition party called Tuesday for an international investigation into a bomb attack the previous day that killed a popular former army general and 26 others. Video: Sri Lanka army closes in on Tamil Tigers - 07 Oct 08 Former Tamil rebel fighter named as member of parliament Publ.Date : Tue, 07 Oct 2008 08:19:30 GMT Red Sox roar into AL title series - Boston Globe Boston Globe - By Dan Shaughnessy Bring on the Rays. Bring on the Dodgers or Phillies if you like. There is plenty of champagne left in New England and Mayor Menino has sent the duck boats to have their tires rotated. Red Sox not taking Rays lightly in next round of postseason Red Sox squeeze past Angels, advance to ALCS Publ.Date : Tue, 07 Oct 2008 06:49:29 GMT Man with financial woes kills family, self - San Francisco Chronicle
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FOXSports.com - by Alex Marvez Alex Marvez is a Senior NFL Writer for FOXSports.com. He's covered the NFL for 14 seasons as a beat writer and is the president of the Pro Football Writers of America. Frerotte proves mettle against sloppy Saints National Football League Game Capsules Publ.Date : Tue, 07 Oct 2008 07:39:53 GMT McCain, Obama introduce newly sharp tone amid major news events - Los Angeles Times
Los Angeles Times - McCain intensifies his attack on Obama's past and character, and Obama returns the favor. The tactics may not resonate with voters in a time of crisis. Video: AP Campaign Minute McCain, Obama unleash another round of attacks Publ.Date : Tue, 07 Oct 2008 07:01:25 GMT Fan in Room Seems to Cut Infants’ Risk of Crib Death - New York Times
New York Times - By TARA PARKER-POPE Sleeping in a room with a fan lowers a baby’s risk of sudden infant death syndrome by 72 percent, a new study has found. Study Suggests Fan Use Cuts SIDS Risk in Babies Study: Using fan on sleeping baby reduces risk of SIDS Publ.Date : Tue, 07 Oct 2008 03:22:40 GMT Turkey hits PKK targets in n. Iraq on Tuesday - International Herald Tribune
International Herald Tribune - ANKARA: Turkish warplanes pounded suspected Kurdish rebel targets in northern Iraq for a second straight day on Tuesday, stepping up a bombing campaign after the death of 17 Turkish soldiers in a cross-border ambush. Turkish warplanes bomb 21 PKK targets in N Iraq Turkish airstrikes target Kurdish rebels Publ.Date : Tue, 07 Oct 2008 07:30:40 GMT Increase Web Traffic |
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