Eliminating Debt, Step by Step
Americans everywhere are swimming in a sea of debt. Do you
have a home mortgage, a car loan, credit cards, and even
store shopping cards? If so, then most likely you are
struggling each and every month just to make the minimum
payments on your credit and store cards. And forget about
putting any aside for savings. Even though your home loan
and car loan are positive steps since you are building
equity in these assets, it is credit cards and store cards
that will get you, and keep you, in financial trouble.
Credit card debt affects millions of people around the
world – it is a financial epidemic! Individuals who suffer
from too much credit card debt spend their time to pay off
their expenses from the past, instead of planning for and
saving for the future. If this sounds familiar to you, it’s
time to start attacking your credit card debt and getting to
the point where you are living debt-free.
Although it might sound like a great idea, living debt-free
is much easier said than done. This is especially true for
individuals who are suffocating under thousands of dollars
of credit debt. Unfortunately, there is no “quick fix”
solution for credit card debt.
The hardest part about eliminating credit obligations is
getting rid of the cards. This is especially true for people
who are more or less dependent on them. Let me assure you,
however, that you are never going to get rid of your debt
if you continue to spend. So pick one (and only one) credit
card to reserve for emergencies only, get out the scissors,
and chop the others to pieces.
Now, if you are already in financial difficulties, you may
need to take some other steps to get on track. One of the
best ways to lower interest rates and simplify your life is
to take out a debt consolidation loan, assuming you can
qualify. A debt consolidation loan allows you to pay off
all of your outstanding credit card debt and now have only
one monthly payment to worry about. And, best of all, you
will usually get a much lower interest rate for a debt
consolidation loan than you had for your credit cards,
saving even more money.
Another option for those in financial difficulty now is a
Debt Agreement with your creditors. For those who are
having difficulty making minimum payments, you would talk
to your credit card companies and negotiate a payment
compromise that allows you to control the amount of money
that you pay every month. A Debt Agreement is a last resort
prior to filing for personal bankruptcy, and should only be
considered in the most extreme of circumstances. And, the
credit card companies may always reject your proposal.
Some of the different types of Debt Agreements that might be
put in place include payment of less than the full amount of
some or all of your debts; a moratorium on payments for some
period of time to give you a chance to save funds; transfer
of property from the debtor to the creditor as full or
partial payment, and payments directly out of your income to
your creditors.
Hopefully, you will not need to go to these extremes as you
take back your financial future. So make the decision to
get out of debt today!
Petra Shulde is the owner and webmaster of Fixn Debt, Inc., an Internet directory for debt information.
