If you have been thinking lately "How do I clear my debt?" you are not alone.
With the economic slump that seems to go on and on without any sign of true recovery, being debt free or at least having your debt under control is smart money management.
There are three sure-fire ways to clear debt.
This article will examine all three in detail so that you can make the right choice for your situation.
The first is debt consolidation.
Second is credit card debt elimination and the third is bankruptcy.
• Debt Consolidation When most people think about debt consolidation, they have a skewed idea of what it actually does.
When you go to a consolidation company, whether one of the new Christian debt consolidators, or a traditional company, you are buying their expertise and their contacts within the industry.
They are not actually reducing your debt.
They provide debt help.
What they are doing for you is creating a manageable monthly payment.
Truly clearing the debt will take longer, on average a consolidated debt takes three years longer to pay off that if you paid the debts off individually.
If you have an income problem, however, this is the best way to go.
What do I mean by that? Too often people find that their debt far outstrips their ability to pay it back in a reasonable amount of time.
If you are in a low paying job and there is little chance that you could increase your income by 30% percent or more, you should consider a consolidation because you will slip further behind in your payments as you try to meet even the minimum payments on the debt.
Consolidating the debt is a good step to avoid finding yourself in bankruptcy court.
• Credit Card Debt Elimination This is a dream for many Americans.
They would love to wake up one day and have zero balances on all of their credit cards.
You can do it.
You can clear debt from your life.
It will not happen overnight but that does not mean that you shouldn't take that journey and reach the clear debt goal.
There are several components to debt elimination.
First, get on a written budget.
You can do this yourself; you do not need a financial planner or a consolidation company for this.
There are free budget templates online.
Download one and start filling it in.
You need to find out how much money you bring into the home every month and you need to know how much money goes out every month.
Once you have a handle on those two figures -- income and outflow -- you can start to create a realistic budget.
Chances are, since you are in debt, that you have been spending more than you make.
This is common and nothing to be ashamed about.
That said, this behavior stops today.
Starting today, you spend less than you make each month.
Starting today, you pay cash for everything that you can.
Starting today, you bring your lunch to work instead of eating out.
Now that you are living below your means, you can take the extra money and create a debt snowball.
To do this, take all of your credit card bills and rank them from lowest balance to highest.
Start with the smallest debt and pay whatever you can above the minimum payment.
If by ratcheting down your lifestyle, you save a hundred dollars a month, that's what you send as extra to the lowest balance credit card.
Do it until it is paid off and then take the hundred dollars plus the original minimum payment and send that to the next credit card balance.
Pay it off and keep going.
•Bankruptcy It is a hard place to find yourself, but sometimes the only way to clear your debt is through the courts.
Bankruptcy is the only way to legally eliminate credit card debt.
It is not a decision to make lightly.
It takes months and months to go through the process.
As it is happening, your world will seem to shrink and all you can think about is the next document to get notarized and the next hearing or the next call from your lawyer.
People sometimes have the mistaken idea that it is a simple one-two-three process and it is simply not that.
Not that at all.
If you are drowning in debt, however, if you have more debt than you could pay off in a lifetime of labor, then bankruptcy is your answer.
It happens to lots of people.
Lots of good people find that they have to declare bankruptcy.
If it is the right choice for you, it will be the smartest choice you ever made.
If all other avenues are exhausted, it is the one solution left.
The most important lesson of bankruptcy is to reorder your priorities afterward so that you never find yourself in debt again.
The statistics of people who declare bankruptcy more than once are staggering.
Don't be that statistic.
If you are looking for clear debt solutions, these are the best ones to consider.
The first two are preferable, obviously, but it is nice to know that if you are in that hard place, at rock bottom, you can get the help you need through the court system.
With the economic slump that seems to go on and on without any sign of true recovery, being debt free or at least having your debt under control is smart money management.
There are three sure-fire ways to clear debt.
This article will examine all three in detail so that you can make the right choice for your situation.
The first is debt consolidation.
Second is credit card debt elimination and the third is bankruptcy.
• Debt Consolidation When most people think about debt consolidation, they have a skewed idea of what it actually does.
When you go to a consolidation company, whether one of the new Christian debt consolidators, or a traditional company, you are buying their expertise and their contacts within the industry.
They are not actually reducing your debt.
They provide debt help.
What they are doing for you is creating a manageable monthly payment.
Truly clearing the debt will take longer, on average a consolidated debt takes three years longer to pay off that if you paid the debts off individually.
If you have an income problem, however, this is the best way to go.
What do I mean by that? Too often people find that their debt far outstrips their ability to pay it back in a reasonable amount of time.
If you are in a low paying job and there is little chance that you could increase your income by 30% percent or more, you should consider a consolidation because you will slip further behind in your payments as you try to meet even the minimum payments on the debt.
Consolidating the debt is a good step to avoid finding yourself in bankruptcy court.
• Credit Card Debt Elimination This is a dream for many Americans.
They would love to wake up one day and have zero balances on all of their credit cards.
You can do it.
You can clear debt from your life.
It will not happen overnight but that does not mean that you shouldn't take that journey and reach the clear debt goal.
There are several components to debt elimination.
First, get on a written budget.
You can do this yourself; you do not need a financial planner or a consolidation company for this.
There are free budget templates online.
Download one and start filling it in.
You need to find out how much money you bring into the home every month and you need to know how much money goes out every month.
Once you have a handle on those two figures -- income and outflow -- you can start to create a realistic budget.
Chances are, since you are in debt, that you have been spending more than you make.
This is common and nothing to be ashamed about.
That said, this behavior stops today.
Starting today, you spend less than you make each month.
Starting today, you pay cash for everything that you can.
Starting today, you bring your lunch to work instead of eating out.
Now that you are living below your means, you can take the extra money and create a debt snowball.
To do this, take all of your credit card bills and rank them from lowest balance to highest.
Start with the smallest debt and pay whatever you can above the minimum payment.
If by ratcheting down your lifestyle, you save a hundred dollars a month, that's what you send as extra to the lowest balance credit card.
Do it until it is paid off and then take the hundred dollars plus the original minimum payment and send that to the next credit card balance.
Pay it off and keep going.
•Bankruptcy It is a hard place to find yourself, but sometimes the only way to clear your debt is through the courts.
Bankruptcy is the only way to legally eliminate credit card debt.
It is not a decision to make lightly.
It takes months and months to go through the process.
As it is happening, your world will seem to shrink and all you can think about is the next document to get notarized and the next hearing or the next call from your lawyer.
People sometimes have the mistaken idea that it is a simple one-two-three process and it is simply not that.
Not that at all.
If you are drowning in debt, however, if you have more debt than you could pay off in a lifetime of labor, then bankruptcy is your answer.
It happens to lots of people.
Lots of good people find that they have to declare bankruptcy.
If it is the right choice for you, it will be the smartest choice you ever made.
If all other avenues are exhausted, it is the one solution left.
The most important lesson of bankruptcy is to reorder your priorities afterward so that you never find yourself in debt again.
The statistics of people who declare bankruptcy more than once are staggering.
Don't be that statistic.
If you are looking for clear debt solutions, these are the best ones to consider.
The first two are preferable, obviously, but it is nice to know that if you are in that hard place, at rock bottom, you can get the help you need through the court system.