4 Ways to get instant debt relief and save money
The pile of debts can destroy the financial peace in your life. Your debt burden can make things impossible for you to go ahead. Thus, you should try to get out of the debt as soon as possible. But, repaying the debt doesn’t mean blowing all the money on the debt payments.
Some debt relief options that can help you to get out of debt fast while saving money.
What are those debt relief options?
How can they help you to get out of debt fast while saving money?
Here you go:
Ways to get debt relief and save money
You can get rid of debt fast through some professional debt relief options like debt consolidation program, debt settlement, debt management, and bankruptcy.
Now, I will discuss how you can get out of debt and save money by considering these debt relief options.
1. Enroll in a debt consolidation program
When you consider the debt consolidation program to repay your debts, you will get some financial privileges like:
- You will get a flexible repayment plan
- It reduces the interest rate
- It allows you to merge all your debts into a single one
- You are required to make one single monthly payment
- It stops collection calls and harassment from the debt collectors’ end.
How a debt consolidation program helps to save money
First of all debt consolidation program simplifies your debt payment process. You just need to make one debt payment per month instead of multiple payments on multiple debts. It saves you money by reducing the interest rate on your debts. Usually, the monthly payment amount is lower than the previous payment. Thus, you can save money.
However, you should practice good financial habits to set aside a certain amount so that you can make the debt payments every month.
2. Settle your debts
You can settle your debts on your own. But the creditors may not agree for settlement. In that case, you can enroll in a settlement program to settle your debts successfully. The debt settlement company will negotiate with your creditors to lower the total outstanding balance. They also guide you to avoid debt collection exploitation.
How debt settlement helps to save money
In a debt settlement program, you need to pay a lower payoff amount. Thus, you can save money on the overall debt amount. It also helps you to avoid losing your valuable assets in bankruptcy. If you get approval for paying the lump sum to settle your debt, then you can save more for that lump sum payment.
However, you have to pay a fee to the settlement company for the service. If you settle your debt on your own, then you can save even more.
3. Enroll in a management plan
If you get a debt management plan from a non-profit credit counseling agency, then it can help you save money and time on paying off your debts. They will guide you to live below your means to save money successfully.
How a debt management plan helps to save money
It reduces the interest rate on your debts. You need to make one monthly payment every month. Like a debt consolidation program, DMP also merges your multiple debts into one monthly payment.
However, if you miss one monthly payment, then the plan will end. However, if you miss one monthly payment, then the plan will end. In a debt consolidation process, you won’t get any personal finance or budgeting assistance. But, once you enroll in a debt management plan, the debt counselor will guide you to learn important financial lessons so that you can avoid the further financial mess.
4. File bankruptcy
If your debt burden is huge and you are unable to repay your debt with the help of your income, then bankruptcy can legally dismiss your debts.
Usually, debtors consider chapter 7 or chapter 13 to get rid of debt fast.
How bankruptcy helps to save money
Once you file bankruptcy, the trustee will negotiate with the creditors to shrink the debt.
You will get relief from all the irritating collection calls. You can avoid losing money on foreclosure.
However, chapter 7 is a liquidation process, so your debts will be paid off by selling your assets including property, funds, checking account, or savings account. Thus, you may not be able to save much. But the good thing is you can start a new financial journey after paying back all your debts. All the newly earned money will remain yours. But you have to incorporate good financial habits in your life to avoid further debts.
In chapter 13 bankruptcy, saving money can be more complicated. It takes 3-5 years to get rid of your debts. Whereas, you can get rid of your debt with a few months through chapter 7 bankruptcy.
In chapter 13, you will be given a repayment plan by the court. You have to repay your debt within the time.
However, there are some other ways to save money in bankruptcy. So, consult a good attorney.
Lastly, you should understand that considering professional debt relief options can help you to get rid of debt fast. But getting out of the debt is not an easy task. It could take a few years depending on the debt amount you have. Also, the professional debt relief options are not free. So, you should try to avoid further debts as much as possible.
The best way to avoid future debt is living within your means. Don’t waste money on unnecessary things that you don’t need. Also, use your credit cards responsibly to avoid high-interest rate credit card debt. If you can’t afford the credit card bill, then don’t use the credit card. And, if you purchase things using your cards, then pay the bills in full and within time.
You will also get many budgeting and money managing tips from the debt relief company you will enroll with. So, follow their tips to live a debt-free life.