Debt Consolidation Articles

By Steven M White

Debt relief means working a way out so that you come clean off your debts. Debts heavily burden your existing finances and the interests you have to pay on the money you owe eat up your monthly finances, just like that.

There are many ways to come out of the financial hardships imposed by debts. The first thing to look into is your existing financial situation and find out to what extent you are deep in debt and if these debts can be paid off is a short while. If you come to the conclusion that your debts are only a temporary problem which can be solved in a short period of time, call up your creditors and explain the situation to them. When you have been consistent in your due payments and it is only this one issue that has come in your way, your creditor will show understanding and give you the time leverage you most require.

Opting for credit counselling is another way. Counselling will give information on how you can keep your finances under check. They will give you a plan and you need to stick to the budget to bring down your expenses, so that you can pay up pending bills and be free of your debts. The debt management plan will list a series of steps in which a list is made of creditors, to whom money is owed and the amount duet o each of them. You total income and your expenditures are drawn up. The expenses taken into account include such as car payment, rent payments and so on to derive a figure which can be set apart from your expenses towards payment of debts.

Debt relief can be obtained through debt consolidation wherein you can club individual loan amounts into a single loan for which you make payments at a reduced interest rate. Over a period of time you will become debt free. In order to take advantage of debt consolidation, you need to have made payments on your existing debts on time because when you do this your interest rate on the consolidated loan amount will be lower otherwise you will be stuck with high interest rates and no way out of a bad situation.

Declaring bankruptcy is another way out of your debts. However, this should be taken only as a last resort. Anyone who has gone through bankruptcy will know that it put a black mark n them, something which does not fade away easily. Furthermore, after declaring bankruptcy, you should be able to consolidate your finances, otherwise you may have to repeat declaring bankruptcy and there are limits to the number of times you can declare yourself bankrupt.

It is important to keep a proper track on your finances, so that you never have to go through the hassle of have to take up dent management through counseling, consolidation or worst declaring bankruptcy. In order to do this your expenses right from the beginning must be curtailed according to your income level. Should you have to take debt, you should be able to manage your income to pay back the debt amount.

Steven M White, a freelance financial consultant with fifteen years experience.