You can blame the American economy. You can blame your business woes. But, inevitably, you are responsible for your own personal debt. As Americans, we are beginning to recognize that the “charge now, pay later” philosophy that has run our nation is no longer working for us. We need to stop blaming others and start looking for a solution for ourselves.
The only seemingly lasting step to financial freedom from debt is a lifestyle change; to stop spending what we do not have. Freedom from debt is imperative to owning a successful home-based business.
To help us, a number of debt repayment solutions and services have sprung up to assist We the People to regain our financial freedom back.
The simplest solution is to receive counseling from qualified professionals who are able to help calculate a workable monthly pay back amount.
Counseling
Many of these debt counseling services are funded by private sources (generally, non-profit, religious organizations). So they are able to provide their services to you for free.
There are other debt counseling sources that charge a fee but before you spend money on counselors, you might also consider online debt repayment calculation tools. Some of these debt repayment sites provide free, useful automated self-evaluation tools just for this purpose. The information you typically need to provide is the amount on each of your credit cards, medical expense, and other balances owed.
You then will choose a period of time in which you think you could reasonably pay off your debts. For instance, most choose a period of about three to five years. Others may choose repayment terms of five or ten years or more.
If you can successfully develop a solid debt repayment plan based on your income, it will make your financial freedom from debt a reality.
Other Options
There may be other options for those debts that have very high interest rates. You may have to consider other options such as consolidation, settlement, and forgiveness.
Consolidation
Consolidation is the act of combining your debts in order to pay a lower interest rate. Usually a consolidation loan is taken out to cover the cost of the debt.
After consolidation, your monthly payment is made in the same way as a dept repayment plan. The biggest difference is the lower interest rate. This can be quite significant when you consider some of the credit card interest rates are often in the 20 to 25 percent range. That’s 1/4 of your bill compounding upon itself!
Settling
Settling a debt usually happens with credit cards or other bills that are left unpaid for an extended period of time. When this happens, the creditor or collection agency may offer a settlement amount.
Settlement amounts are often half of what the original debt. However, you do not need to wait until your bill is delinquent to settle it.
If a you or your family are undergoing financially difficult, you might be able to seek help from a Dept Management Counselor. This counselor will often help buy suggesting ways to lower the amount of debt that is owed to certain credit cards.
As mentioned earlier, the reduction amount of the settlement is often up to fifty percent of the accumulated principle plus interest.
Debt Forgiveness
In some cases, debts could be forgiven altogether. This is actually called debt forgiveness.
Of course, there are consequences to having debts settled or forgiven. It could hurt a person’s credit score for a time. However, some people just want the feeling of being able to “start over.” Some people care more about not having outstanding bills than they do about having clean credit if they know that, in time, they will be able to rebuild their name.
Bankruptcy
Another way to gradually start over is to file bankruptcy. However, this is usually a last resort, as it is a very complicated procedure. Whenever possible, this step should be avoided. Consult with an attorney specializing in bankruptcy if you need to file for bankruptcy.
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This post was written by admin on September 2, 2008
