How to Get Rid of Debt Once and for All

Share via

Are you struggling with repaying your debts? Due to the constantly increasing demands of modern life, very few people can survive without credit. At some point in time, debt can become overwhelming, and the only viable option that can give you peace of mind is to eliminate all credit card spending and hope that you have enough to pay your bills. Getting out of debt is not easy, but there are several ways you can overcome the challenge. Read on to learn how to get rid of debt once and for all.

Prepare a Realistic Budget

The first step that you must take if you want to get out of debt is to set a realistic budget. This will help you to exercise financial discipline as a budget prevents you from overspending money that you do not have. In your budget, you should consider basic things that you need in your daily life. You must do away with other luxuries like eating out, paying high subscription fees for entertainment packages like Netflix, and other activities that you can do away with. In other words, you should change your lifestyle and focus on repaying your debts.

File for Bankruptcy

If you are overwhelmed by debt, you can consider filing for bankruptcy so that you can get a fresh start. With bankruptcy, a trustee takes over your debt and works out a plan to repay it. You may be able to get peace of mind since creditors will stop pestering you with calls and demanding money from you. However, bankruptcy comes with several consequences that you must be aware of. It is essential to seek legal advice first before you consider this option. If you reside in Kentucky, enlisting the services of bankruptcy lawyers in Louisville, KY at O’Bryan Law Offices should be your first step to get the guidance you need to choose the right bankruptcy method. Experienced bankruptcy lawyers provide counseling to their clients to help them make informed decisions and cope with their new situation.

Refinance Your Debt

Debt refinancing can help you repay your debts quicker. One way of doing this is to get a consolidation loan, which is a form of personal loan that comes with lower interest rates than your current debts. You can use this loan to refinance student loans, mortgages, auto loans, and other debts. With this method, you can save a lot of money while eliminating debt at the same time.

Learn to Use Cash

You must abandon your old habits of wantonly using your credit card to buying different goods and services. Excessive credit card spending is one of the leading factors that drive many people into debt. Therefore, you must stop using your credit card and use cash instead. The problem with a credit card is that you may be forced to spend money that you do not have. This will only create more debt and make it difficult to reduce it. When you use cash, you are limited by the money in your wallet and this can help you shop wisely.

Settle With Your Creditors

If your accounts are overdue, you can consider the option of debt settlement with your creditor. You can negotiate with the creditors so that you can offer a lump-sum payment to clear the debt. The lenders who accept debt settlement may also agree to cancel the remaining credit on accounts that are already in default.

Find Some Side Hustles

If you are overwhelmed by debt, you should not solely rely on your monthly paycheck. You can consider the different skills you have that could help you to get some extra cash. For instance, you can offer freelance services in various fields like coding, web design, blogging, editing, and many others.

You may also need to swallow your pride and perform menial jobs like dog-walking or babysitting. While many people undermine these side chores, they offer good hourly rates that can help you repay some of your debts.

Sell Unwanted Items

If you check carefully in your drawers, garage, or kitchen, you will realize that there are certain items that you rarely use, and these can be good cash cows. Something that you no longer need could be in demand somewhere. Therefore, try to dispose of all the goods that no longer add value to your daily needs. Selling one of your cars is not a bad idea if you want to reduce your debts. This decision can also go a long way in helping you save money on insurance, repairs, gas, and other related expenses.

If you are struggling to repay your debts, there are different options that you can consider to raise extra cash. While filing for bankruptcy can allow you to rebuild your financial status, it is vital to try the different alternatives available before taking such a bold step. You must exercise financial discipline and avoid incurring more debt that can worsen your situation. Instead, you should adjust your lifestyle and live within your means.

Share via
Samantha Acuna is a writer based in San Francisco, CA. Her work has been featured in The Huffington Post, Entrepreneur.com, and Yahoo Small Business.