Get debt free - 7 Simple Steps towards a tension free life
- Lower your monthly payments
- Reduce interest rates
- Waive late fees
- Eliminate collection calls
- Avoid bankruptcy
- Have only one monthly payment
- Become debt free
Living a debt free life is not impossible. But it requires determination, time, patience and discipline. Given below is a list of 7 steps on how to lead a debt free life.
Step 1 - Admit that you are in debt problems
The first step towards a debt free life is to admit that you are in debt. Leaving bills unpaid and avoiding creditor calls isn't the solution to your debt problems. In fact it makes the situation worse. However, the fact that you're reading this article implies you have already accepted that you are in debt and you're ready to take the next step.
Step 2 - Seek professional help
Take professional help from a debt consolidation or settlement company. If you'd like to obtain lower rates and consolidate your bills into a single monthly payment, then debt consolidation program is the right option for you. But if you wish to reduce your debt amount, then you should go for debt settlement.
Step 3 - Free debt counseling
The consolidation/settlement company will offer a no-obligation free debt counseling session. In this session, a consultant will analyze your financial situation and suggest the right debt solution for you. To make his task easier, you can prepare a list of your debts/bills. Next to each of your dues, put down the name of the creditor, the total amount you owe, the rate of interest and monthly payment. This will give the consultant a better picture of your financial standing.
Step 4 - The consultant prepares a monthly budget for you
Based on the total amount you owe and your monthly income, the consultant will help prepare a monthly budget for your expenses. This is to find out how much you are left with after paying your utility bills and other expenses. The amount left over will be used to pay off your dues.
Step 5 - The consultant negotiates with your creditors
In a consolidation program, the consultant negotiates with the creditors/collection agency in order to lower your rates and monthly payments. However, if you'd like to settle debts, the consultant won't negotiate for lower rates. Rather, he'll talk to your creditors about reducing your outstanding balance.
Step 6 - Start making payments
You need to make a single monthly payment to the consolidation company which distributes the amount amongst your creditors. This goes on for 2-6 years till you're out of debt.
In case you choose settlement, you'll have to stop payments to your creditors and make monthly payment to the settlement company. The payments accumulate into lump sum cash after months. The lump sum amount is then paid off to the creditors/collection agency.
Step 7 - Say a big No to any new debt
When you consolidate or settle debts, make sure you don't add on more debt. Otherwise, it will be difficult for you to get debt free. So, just say "No" to any new debt when you're in a consolidation or settlement program.
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