If you are in debt and looking for a way out, debt solutions are available but some programs can cause you more trouble in the long run. Legitimate credit counseling services can help you manage money, debt consolidation techniques can lessen your monthly payments and the correct budget can eliminate debt long-term. Watch out, though, for those claiming they can cure your debt quickly, chances are you will be heading for more trouble than not.
Counseling Services
An option for debt assistance is consumer credit counseling. According to the Federal Citizen Information Center (FCIC), counseling services can help consumers pay bills and budget wisely. Organizations can assist you to build such skills as money management and debt payment planning, but you must choose carefully. Look out for scams for companies wanting you to pay for services such as payment of bills and handling debts. Instead, look for free counseling services that can provide you with long-term debt solutions and will work with your creditors to negotiate lower monthly payments, without asking a fee from you.
Debt Relief Services
According to the Federal Trade Commission, if you are desperate and need help paying off bills, you could fall prey to debt relief agencies out to get your money. Debt relief services offering to settle your debt for less than you owe sound good to people deep in debt, but you will likely face serious consequences. Debt relief companies typically charge you large fees to manage your debts while urging you to stop paying and communicating to your debtors. In exchange, debt relief companies will manage your debt, for a fee. Most debt relief services are not legitimate and the FTC has prosecuted companies claiming services they could not deliver.
Debt Consolidation
A way to relieve some of the debt you owe is to consolidate your debt. While debt consolidation will not eliminate debt, the consolidate of higher balanced credit cards and loans to low-interest cards or loans can save you money each month in reduced interest and monthly earnings. To consolidate your debt, transfer money to fixed-rate cards, lines of credit or loans with a lower interest rate. You can also transfer to accounts offering promotional rates but, if you make that transaction, be sure you can pay-off the amount before the promotion expire or else you'll be stuck with a lump sum of interest to pay down, leaving you in a similar situation.
Budgeting
Perhaps the best way to relieve debt, though not the quickest approach, is to prepare a budget allowing you to pay down the debt on your own. Over-spending quite probably got you into this mess so you'll need to develop a budget that you can maintain while slowly eliminating long-term debt. Whether you decide to tackle the debt with the highest interest rate or the debt with the highest balance first doesn't matter much, what matters is you find a plan and stick to that plan. Your budget should include all your household expenses and enough cushion to pay down the debt you owe without creating shortfalls forcing you to incur more debt. Budgeting, like dieting, is hard work but you can eliminate debt in a way that will help build back your credit score, increase your savings and help you sleep better at night without a high number hanging over your head.
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