Editor’s Note: This is an interesting piece of information on How to get out of debts. The situations referred to here are obtainable in the United States of America. Comments are solicited from readers especially as to whether Financial Institutions or other organizations in Nigeria render similar services to assist people out of debts. Enjoy your reading.
Many struggle with debt every day, getting the feeling of sinking deeper and deeper until solution seems to disappear. Taking action now is the most important, and there are many ways available:
Depending on the amount of accounts balances, you can take a debt consolidation loan from your Financial House or Bank, who can grant you a loan to pay off all of your debts. Then you can make a single monthly repayment over the course of a few years. This is structured like a personal loan or auto loan. Interest rates will be based on your credit score and history, so if you have had troubles the rate may be high, but at least there is an end in sight, instead of just making minimum payments on credit cards with no end date.
If you are having trouble paying your bills, there are debt management companies, typically non-profit, that will set up payment plans and negotiate lower interest rates, although balances are not reduced, lower monthly payments are able to be made get out of debt within 3-6 years, depending on the size of debt.
With this program you are essentially telling your creditors you can no longer pay them and would like to settle the balance for a fraction of the price. Your credit will be hurt significantly and your accounts will be closed. In these situations it pays off to use a combination of a professional debt settlement and credit repair agencies to help you out in these difficult negotiations.
While this may be the most drastic method with the most negative connotation, it actually can help in some aspects. Chapter 13 bankruptcy can reorganize your debts and the individual makes payments to a Chapter 13 trustee, who then makes the payments to the creditors on your behalf, for a settled amount of money, over a period of 3-5 years. Yes, your credit will be hurt, but maybe this is your only get out of debt option, and eventually you will be debts free and can start repairing your credit again.
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This really is the most important, and a way to take responsibility and get out of debts yourself. Much like all aspects when it comes to financial success is patience and discipline. You will not be out of debts completely overnight, but you will need to change your behavior right away. You should embark on savings, eliminating unnecessary spending, and paying down debts until it is gone, without creating new debt.