There Are 5 Ways You Can Become Debt Free

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It can be a long, hard struggle to get out of debt, no matter how much you owe or how much you earn. No matter what your financial circumstances, there may be a way out of debt that you haven’t considered. You don’t have to stay stuck struggling to keep up with interest charges.

There are 5 main paths you can take to get out of debt, even when your situation looks impossible.

#1 Bankruptcy

Bankruptcy is often the first option people think of when they’re overwhelmed by debt. It’s not the only one available, but in some cases, it may make sense. Bankruptcy provides debt relief while you sell some of your assets to repay a portion of your debt to creditors.

You can only file for bankruptcy through a bankruptcy trustee, now known as a Licensed Insolvency Trustee. However, there’s more to debt relief than bankruptcy; learn about available debt solutions with a bankruptcy trustee.

#2 Consumer Proposals

One of those solutions is a consumer proposal, an alternative to bankruptcy that provides debt relief without touching your assets. Consumer proposals are an offer to your unsecured creditors to pay a fixed monthly amount for up to five years. Consumer proposals can include significant debt relief where your creditors will forgive debt. They’re also another way to give yourself more time to repay debt without interest accumulating. A consumer proposal will also stop collection calls and legal actions taken against you by your creditors.

#3 Credit Counselling

As part of the insolvency process, bankruptcy trustees like David Sklar & Associates also offer credit counselling. Credit counselling can show you the way to rebuild your credit rating and get back on the path to financial success.

#4 Debt Management Plans

A debt management plan may be right for you if owe less than $5,000, your credit rating is poor, and you can afford to pay your debts but need more time to do so. Debt management plans are provided by credit counseling agencies that are not-for-profit. They simplify payment plans and offer relief from interest, giving you breathing room to pay back debts without being overwhelmed.

Usually a DMP does not include debt relief in the form of forgiven debts, and you have to pay your entire debt. The advantage of a DMP is getting breathing room to pay smaller amounts of unsecured debt.

#5 Debt Consolidation Loans

Another option may be a debt consolidation loan, though it pays to be careful. Unless you have a good credit score, you may not be able to qualify for an interest rate that makes a difference. Odds are that if you need a debt consolidation loan, your credit score has already taken a hit. Do the math and find out what kind of interest rate makes sense in your circumstances. It may make more sense to talk to a bankruptcy trustee like David Sklar & Associates about a consumer proposal or other alternatives.

There are many options out of debt. Find the one that makes the most sense for you.

Just A Guy Thing is a men's lifestyle magazine focused primarily at guys wanting to better themselves.

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