Monday, August 15, 2016, PM | 1 Comment
Learning to avoid debt is a challenge when you are struggling to earn enough to pay your expenses.
Unexpected expenses, such as car repairs or medical bills, can make the challenge of remaining debt free even more difficult.
With some basic financial tools, you can manage debt successfully.
Create a Budget
No matter how much you earn or owe, a budget is an essential tool to managing your finances. Begin by writing down each thing you purchase or pay for one month.
The next month, eliminate all unnecessary expenses and setting money aside to pay debts. Within a few months, you can pay off small debts.
Credit counseling is an option if you don’t know how to balance your income and your expenses. It is important to choose a reputable credit counseling organization.
A non-profit organization that does not charge fees or require donations is ideal.
Universities and other institutions, such as credit unions, often offer credit counseling free of charge.
Some companies allow customers to negotiate debt, providing you with the opportunity to pay the full balance for less than you owe.
Credit card companies and other lenders are particularly willing to negotiate when the account is past due.
Contact the company directly, or work with a debt consolidation company to find out whether you are eligible for this option.
Remember that debt consolidation can have a negative impact on your credit score before choosing this option.
If you have been injured and have medical costs, consider consulting a car accident attorney in Las Vegas for assistance.
Many people who have been injured are eligible for compensation, which can help pay medical costs and other debts that have resulted from the injury, such as mortgage payments that have gone unpaid as a result of your inability to work.
Refinancing is an option for some types of debts. For instance, refinancing your mortgage payment is wise if you can find a lender that offers lower payments or lower interest rates.
Another option is to choose a loan modification. Loan modifications are typically available for first time home buyers who owe a specific amount on their mortgage loan.
Both loan modification and refinancing can help you avoid defaulting on your loan.
Bankruptcy is a last-resort option that, in some cases, allows you to repay your debt over the course of several years and allows you to remain in your own home.
Chapter 13 bankruptcy is the best option for people who can repay their debts over time, while Chapter 7 bankruptcy requires you to liquidate, or sell, all of your assets to repay the debt. Chapter 7 bankruptcy eliminates many types of debt.
Staying out of debt in the first place is the best option, and these tips can help keep you debt-free. If you feel that money is getting tight, consider making some of these changes to improve your financial situation.Facebook.com/doable.finance