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Consumer debt has been mounting over the last few decades. Getting a handle on your debt and being able to pay down what you owe can be a hard process. Stripping your budget back, reducing spending, and finding better interest rates can only take you so far. Check out these three last resort options for when everything you have tried to reduce your debt hasn’t panned out.
No Interest Loans
Many so-called solutions can put you into deeper debt than when you first started out. One low-risk way to get on top of your payments is to use money loans with no interest. These loans are made for people wanting to pay down multiple sources of debt. By securing such a loan, you can eliminate multiple sources of debt and roll them into one monthly payment, with no crippling interest to worry about.
Getting a break from interest rates allows you to get a handle on your debt without exorbitant fees piling up. Places that offer these types of loans sometimes also offer free financial counseling to help you create a better plan for staying out of debt.
Payment Plans
One of the first things you should do if you are taking drastic measures to fix your debt is to talk to your creditors. This can be a daunting task, so if you don’t feel up to it, you may wish to have a credit counseling agency be your advocate.
You or your credit counselor can negotiate with your creditors to set up a payment plan that will take the strain off your budget. This kind of plan should allow you to consolidate all of your payments into one. Usually, these payment plans will also reduce your interest rate and protect you from other fees being tacked onto your debt because of repayment issues.
Sell Your Assets
If you need to come up with a large sum of money to put down on your consolidated debt, a good way to manage it is by looking at your collective assets and selling what you can. 401ks and retirement plans can be cashed out early for a nominal fee if the need is urgent. Though please note, this should only be done when you have exhausted all your other last-resort options.
Some viable alternatives include looking into tenable assets, such as your house, car, or other big items, and selling those for cash if you have equity in them. Then, you should consider downsizing your living and driving arrangements. If you have your own business, you may need to look at selling off any assets that aren’t essential to your day-to-day operations. Or, you may consider selling your business altogether.
If you have stocks or other investments, these can also be sold to give you more money towards paying off your current debt. Any property you have can be sold or rented out to generate some passive income while you work on downsizing.
Whichever of these options you choose to go ahead with, it is highly advisable to seek out a credit counselor or debt solutions advisor to help you make a plan and provide strategies to stick to it. Being stuck with payments that are throttling your life isn’t sustainable. Making a concerted effort to pay down your debt before filing for bankruptcy is your best choice.
