5 smart solutions to your debt problems

There are various debt solutions through which you can free yourself of debt. To achieve freedom from debt you can either do self credit repair, or can get help from credit counseling agencies. You can either try settling your debts, or consolidating your debts, or try to negotiate a repayment plan with your creditors/lenders or collection agencies. However, if you can’t seem to do any of the above you can join a credit counseling agency, who will help you to get out of debt.

Types of debt solutions

• Repayment plan - It is a written agreement between the creditor/lender and the debtor according to which the debtor makes his payments on the account. It is requested by the debtor when he faces difficulty in making his payments.
• Debt management - Debt management is one of the best debt solutions. First of all you should maintain a detailed list of all your credit cards, and loans, and the amounts owed, and a list of your monthly income and expenditure. Try saving more to make more than minimum payments on your accounts. Keep copies of your payments, and never default on your payments.
• Debt settlement - Debt settlement lowers the outstanding debt amount by 40-60%. However, you should remember that debt settlement lowers the credit score, because for settling your debts, you will have to default on your payments.
• Debt consolidation - Debt consolidation is a much better debt solution strategy than debt settlement, because this does not hurt our score. You can consolidate all your debts into one lower interest debt. That is you can transfer balances from high interest credit cards to a low interest one, with 0% interest on balance transfer. Thus in place of many, now you will be making a single monthly payment.
• Credit counseling service - If you can’t seem to manage your debts, you can join a credit counseling agency. They will first prepare a budget for you, to pay off the debts. However, if budgeting does not work out, they will enroll you into debt management program, and will negotiate with your creditors on your behalf.