Paying Off Debt: What Are My Options?

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Having debt issues is something that you share with millions of other people. However, how you deal with your debt issues is something that is uniquely personal. There are a number of different ways you can deal with your debt issues. Let’s take a look at the list of options you might be able to utilize to get yourself out of debt.

Increase Your Income

For some, the answer to paying off debt is to increase their income. Taking on a second job, selling off extra things or even holding an online fundraiser gives them the extra funds they can use to pay off debt. However, for others, trying to increase the amount of money they have on hand is not an option. Whether you have too many current commitments, not enough assets to sell or have no interest in asking others to provide funding to pay off your debts, increasing income is just simply not a viable option.

Debt Renegotiation

Another often used tactic to pay off debt is to work with your creditors to negotiate a better deal. Debt negotiation is often successful and can be used to lower interest rates, forgive past due balances, eliminate fees and even lower the principle amount owed, depending on the type of debt that is owed and the negotiating skills of the debtor. For those who don’t feel confident about their abilities to negotiate a better deal with their creditors, there are professional debt negotiating companies out there that can help. However, you should expect to pay for those services on top of the debt you already owe.

Bankruptcy

For some, repaying debt is simply not an option at all. Medical issues or the loss of a job can prevent someone from having adequate income to repay those debts. For those people, bankruptcy protection can provide relief from their debt obligations, but it comes at a price. A bankruptcy will be on your credit report for at least 10 years and will keep your credit score very low during that time. And rebuilding your credit during that point will be tough, even if you had great credit before the bankruptcy. Lastly, some debts are not dischargeable under bankruptcy laws, so you may still be on the hook for paying certain debts.

consolidation loans

Consolidation loans allow you to get a loan that allows you to pay off all of your other debts and roll them up under one payment. The interest rates are usually lower than credit cards, personal loans or other types of loans and the payment is usually less. This means that paying off your debt becomes much more manageable, your credit score goes up because your debt to income ratio is lower and you don’t have to take a hit on your credit report from a bankruptcy or debt negotiation service.

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