At some point in your life, you will have to deal with debt. It is a part of growing up and becoming financially and independently stable. Still, that doesn’t mean that the debt will just disappear after a while. Sometimes, the debt can spiral out of control and stay with you for a long time. From your point of view, that isn’t a good thing because it affects your finances. For example, lots of debt will affect your credit score, and that will prevent you from securing a loan.

    Everyone who has debt wants to pay it off as quickly as possible. But, that isn’t an option for most people because the debt is too large. If this is your scenario, you will be thinking about your options. How do you deal with your debt? The answer is simple: you follow the relief tips below.

    Pay Off The Urgent Debts First

    If you aren’t dead broke, you will have some money to pay off your debts. You just won’t have enough money to pay off all of your debts. That is okay because it is a start. Your first step should be to pay off the ones that are the most urgent. They are the ones that send letters to your residence informing you of your late payment. They might also tell you that the bailiffs are on the way to raid your home. Get in touch with them and pay them as soon as possible. The last thing you want is a bailiff raiding your property as they will take anything they touch.  

    And The Biggest Debts

    One tip that you read all of the time is to pay off the smallest debts first. That way, you can get them out of the way and concentrate on the bigger ones. Plus, it gets you into the right mindset to tackle all of your debts. Although it sounds logical, it is illogical. When you leave the bigger debts, you accrue more interest. Large loans have the largest interest rates, also called APR in money industry. As a result, the longer you leave them, the more money they cost you in the future. Focus all of your attention on the big debts first and work your way down.

    Set Everything Else To The Minimum Payment

    Although you need to focus on your main debt, you can’t leave the others unattended. They still need some of your time and attention as you can’t sweep them under the carpet. Thankfully, you don’t need to do much to keep them at arm’s length. The trick is to set all of your remaining debts to the minimum payment level for the month. ‘Minimum payment’ means the least amount of money you are obliged to pay each month. At the least, you lower your debts even if it only is piece by piece. By the time you come to pay them off, they will be easier to manage than before.

    Get A Family Loan

    As the name suggests, this is a loan from a family member or a friend. In fact, you can get one from any source as long as they don’t charge you interest. That is the key because it is the interest that kills most lenders. The amount they borrow is fine, yet the total amount is hard work as the interest rates add to the debt. With an interest-free loan, you don’t have to worry about paying back any interest. You can use the loan to pay off your debts and get out of trouble with the banks. Then, you only owe money to your friend or family member. It is much easier owing a loved one than it is a bank as long as you follow a few simple rules

    Debt Consolidation

    Debt consolidation is a useful tactic because it merges all of your debts into one big debt. It might not sound like a good idea, but it makes it much more manageable. And, it also makes it cheaper as you pay less interest because you have fewer loans. But, it does come at a cost. Because you aren’t financially stable, the lender won’t greet you with open arms. Instead, they will look to secure their position. In layman’s terms, they will ask to secure the loan against your home or another valuable asset. If you don’t pay on time, you could lose everything. Always weigh up the pros and cons of this method before you make your final decision. In fact, talk with a financial advisor and get their opinion on the matter.

    Payback Scheme

    A payback scheme is for someone that is in over their head. They usually don’t have the cash to make the repayments, so they need some relief. This relief comes in the form of an agreement between you and your creditors. They agree for you to pay back the money in small increments instead of the normal monthly structure. You might only have to pay back $10 a week, which is $40 a month. A payment scheme makes it easier to control your debts, although it is a long process.

    File For Bankruptcy

    All of the above are good if you have money, but what if you are broke? What if you have nothing left? In that case, you need to talk to a bankruptcy lawyer about filing for bankruptcy. They will walk you through the process to account for all of your debts. By the time the motion goes through, the slate will be clean, and you will be debt-free. Of course, there are implications for your financial future. But, it is better than the alternative. 

    Ask Creditors To Write Them Off

    This is the last, desperate attempt to relieve your debts. Creditors do have the ability to write off your debts, but it rarely happens. Indeed, they wouldn’t make money if they did it on a regular basis. Still, there is no harm in trying because they can only say no.

    If they do, you are no better or worse off than before.

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