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Eliminating debt is a step-by-step process
July 1, 2005 07:26 PM EST | Debt Consolidation | Email to Friend
Americans everywhere are swimming in a sea of debt. Do you have a home mortgage, a car loan, credit cards, and even store shopping cards? If so, then most likely you are struggling each and every month just to make the minimum payments on your credit and store cards. And forget about putting any aside for savings. Even though your home loan and car loan are positive steps since you are building equity in these assets, it is credit cards and store cards that will get you, and keep you, in financial trouble.
Millions of people around the globe are saddled with too much credit card debt, causing a financial epidemic. If you have too much credit card debt, then you are spending all of your income paying off expenses that happened in the past, instead of planning and saving for your future. What you need to do is address your credit card problem head-on and start working towards a debt-free lifestyle.
I know you may be skeptical about living debt-free. It seems like such a pipe dream. And even though it is well within the reach of each and every one of us, it is not an easy task, especially if you are thousands of dollars in debt to the credit card companies. And even though there is no quick fix to your credit card debt problem, there are ways to eliminate your debt and live debt-free.
The hardest part about eliminating credit obligations is getting rid of the cards. This is especially true for people who are more or less dependent on them. Let me assure you, however, that you are never going to get rid of your debt if you continue to spend. So pick one (and only one) credit card to reserve for emergencies only, get out the scissors, and chop the others to pieces.
And what if you are already in trouble? What can you do to reduce and even eliminate your credit card debt? There are two keys options to doing this. The first is taking out a debt consolidation loan. This is where you take the balances of your outstanding cards and smaller finance loans and roll them into one loan or card. This minimizes your monthly repayments but also minimizes the amount of interest that you are incurring each month because you are incurring interest only on one outstanding balance rather than many.
But, if you don't qualify for a loan, you may need to talk to your creditors and work out a Debt Agreement. A Debt Agreement is a binding contract between you and your creditors that sets forth a reduced or simplified payment plan to pay back your debt. This type of agreement helps those struggling to make minimum payments, and and usually a last resort before filing for personal bankruptcy. You should only consider this type of arrangement under the most extreme circumstances, and your credit card company is under no obligation to accept the agreement.
Some examples of the kinds of arrangements that are put in place are:- Payment of less than the full amount of all or any of the debtor's debts,- A moratorium on payment of debts for a period of time to give the debtor time to gather funds,- A transfer of property from the debtor to the creditor as full or part payment, and- Periodic payments of amounts out of the debtor's income to creditors either collectively or individually.
Hopefully, you will not need to go to these extremes as you take back your financial future. So make the decision to get out of debt today!
Petra Shulde is the owner and operator of fixndebt.com, a leading Internet portal for debt information. For more debt information and resources, be sure to visit:http://www.fixndebt.com
Article Source: http://www.valuablecontent.com
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