If you need to get out of debt fast, you can accelerate your payments towards the debt, consolidate your debt, refinance or if you are drowning in debt and have no other choice, you can also file for Chapter 7 or Chapter 13 bankruptcy.
Track your expenses and reduce them
Many people who are in major debt may not be aware where their money goes every month. Write down all your expenses for one month to see where your money is really going. Then, look to see where you can cut down on expenses and apply the remaining funds towards paying down your debt. Cutting down and keeping track of your usage will help you become more financially fit and avoid getting into debt in the future. Although it may not help you get out of debt immediately, this activity is essential to preventing the debt from reoccurring.
Increase Your Income
Increasing your income and applying all the extra money you make towards the debt will cut down the amount of time you have until the debt gets paid off. The best way to increase your income is to get another job. No matter how small your earnings from the job, any additional payment amount you apply towards the debt will help you pay it off more quickly.
Consolidate Your Debt
Debt consolidation works to keep all of your debt in one place so that the interest rate applied to the debt is the same and so that you can then negotiate for a lower monthly payment. You may be able to get a bank loan or a home equity line of credit to use to payoff your short-term loans like car loans and credit card bills. Although you would still not have the debt paid off, the consolidated debt will improve your chances of getting out of debt faster.
Refinance Your Mortgage
If you have a mortgage and your property has appreciated in value, then refinancing your mortgage and taking out cash can give you some money to pay off debt. Of all the methods, this is the one that will probably help you pay off debt the quickest.
File for Bankruptcy
Although it is generally not advised, if you do not have huge amounts of debt, then filing for bankruptcy may not be for you. Bankruptcy also affects your credit score and can stay on your record for up to 10 years, making it difficult for you to get new credit or get a job. Bankruptcies do not also eliminate all forms of debt like child support payments, student loans, taxes, and court fines.
0 comments:
Post a Comment