Five Tips for Dealing with Significant Debt

Debt can pile up unexpectedly, and before you know it, you’re struggling to pay your creditors. It might seem insurmountable, but don’t give up. Instead, try these five strategies for managing your debt and getting back on track:

1)      Ask for help. Your creditors are not rooting for you to fail. If you’re having trouble making your minimum payments, contact your creditors and explain the situation. Typically, they’ll work out a modified payment plan for you that will enable you to continue making regular payments. And if you’re dealing with late mortgage payments, it’s crucial to contact your lender immediately. Most lenders will reduce or even suspend your payments, or change the terms of the mortgage to help you.

2)      Get financial counseling. Non-profit credit counseling organizations can evaluate your financial situation, help you develop a reasonable budget, give you valuable advice when it comes to managing your debt and recommend if you should enroll in a debt management plan.

3)      Consolidate your debt. Debt consolidation is not for everyone, since you will be required to put your home up as collateral against late or missed payments. But if you are in a position to do that safely, you can reduce your credit cost and even take advantage of tax perks by consolidating your debt through a home equity line of credit or a second mortgage.

4)      Research debt relief. For some people, debt settlement can be a lucrative option for getting relief from your debt. Debt settlement programs allow you to pay a smaller lump sum to get out of your debt completely. However, there are a lot of debt relief scams out there, so be sure to do your research on the company.

5)      File for bankruptcy. Although many people look upon bankruptcy as a failure, it can be a great recovery tool when it comes to severe debt. Though bankruptcy information remains on your credit report for 10 years and may interfere with your eligibility to get further credit, it allows you to discharge your debt and start fresh with your finances.

To learn more about the best debt management options for your financial situation, consult an experienced debt relief attorney in Pennsylvania. 

By Harold Shepley | Published June 6, 2015 | Posted in Debt, Financial Distress, Financial Literacy, Free Consultation | Tagged debt control, debt management, debt relief | Leave a comment