If you're
like many in the US, then you probably have debt -
possibly even more than you can handle. Many of us have
daily expenses -- such as groceries and gas -- for which
it's all too easy to pay using our credit card. At the end of the month,
however, we conveniently forget to clear
those outstanding balances and quickly begin to stack up
debt again. Despite that we know we shouldn’t accumulate
this debt, we continue to do it anyway. So here's
the test.
Ask yourself what you do when all of your credit
cards are maxed out and you only have enough money to
make the minimum monthly payment? Are you left with
strategic decisions about what how you should prioritize
what little money you have over? For example, do you
find yourself deciding on which bills you should pay
first? Questions like: should I buy groceries and gas,
or use the remainder to pay for the kids’ school
lunches?
If this is
you, then the problem with this approach is that you may
never manage to get out of debt. At this
point we begin to realize we are in a financial crisis
and something drastic must be done to resolve the issue. Do we
file bankruptcy or do we try a debt counseling service?
Another
option you could consider may be to apply for a
debt consolidation
loan. Right now interest rates are remarkably low and there
are many options available for anyone choosing loan debt
consolidation. For example, if you own your home or have an
existing mortgage, you may be able to apply for a second
mortgage.
This will enable you to get a great rate, thus
spreading your debt over a longer period,
whilst lowering your payments and making them more
affordable. Admittedly, no-one likes living pay-check to
pay-check, so unless you
get lucky and win the lottery or come into a large
inheritance, you are left to get out of debt on your own.
However, because there are many others
in the same financial situation, there are multitudes online sites
where you'll find offers of credit counseling, loan debt consolidation, and information on
debt settlement and reduction.
Bankruptcy is less of an alternative than ever before,
especially as the new
bankruptcy laws make it more difficult for just anyone
to file. To qualify, you must be in true financial hardship, and
in most cases, the courts will direct an arrangement be
set up with creditors so
that the debt is reconstructed, but not actually eliminated.
If you
have student loan debt, then you are stuck with it as there is nothing
that can erase such debts. And unfortunately, the only
option here is that you continue to pay
until the debt is cleared. The best advice in this case
is to apply for all the free financial aid you
can get, otherwise whenever these loans are due, you may be
left wishing you hadn’t borrowed
the extra for those expenses that you really could have done
without.
