Are you searching for realistic, workable ways to get rid of most or all of your debt? Many consumers wonder the same thing and look for strategies that have the potential to banishing debt, like credit card balances and other forms of indebtedness within one or more years. For some, the concept includes paying their home off as well. However, it doesn’t always make sense to add the house payment to the list of things you want to eliminate. That’s because paying down a mortgage over time and on time is one of the most effective ways to build up your credit rating.
Even if you plan to never borrow again, it’s essential to maintain a solid rating in case circumstances change. What are the commonsense steps for saying goodbye to all your non-mortgage indebtedness? The following suggestions work for most people. However, if you are in dire financial straits, consider speaking with a professional credit counselor to avoid having to file bankruptcy.
Make a Payment Plan
Look at your monthly budget and eliminate any unnecessary items. Consider joining a shopping club to save on groceries. Reduce what you spend on fast food and convenience items. Finally, based on current income, increase payments on cards and other outstanding balances by as much as you realistically can.
Avoid paying minimums on credit cards and try to pay off the smallest balances first for a healthy dose of psychological power. Make a detailed payment plan for each card and account on which you owe. Then, follow the guidelines until everything is paid off. Don’t be discouraged if the whole process takes between two and four years. Keep in mind that it takes a while to get out from under a significant financial burden.
Use Untapped Assets for Banishing Debt
If you own a life insurance policy, it’s important to know that you can sell it for cash and use the proceeds to pay down car loans, plastic, personal notes, and more. When you sell a policy via a process called a life settlement, the entire transaction takes just a day or two and often brings in a significant amount of capital. First, review all the relevant facts about life settlements in an online guide that explains every step, in detail. Then, transform you unwanted policy into ready cash for paying off what you owe on cards and loans. The bonus is that you will no longer have to pay premiums on the policy, which gives a boost to the monthly budget.
Consult a Professional Debt Counselor
If you hit a snag along the way or simply feel that you can’t finish the plan for one reason or another, like a layoff or job loss, visit a licensed consumer credit counselor and find out how to decide with creditors to either settle for a lower amount or take longer to repay.
Do Monthly Monitoring Sessions
It’s essential to do regular monitoring to lower monthly expenses before they carry over and assess your ability to succeed at banishing debt. Avoid planning sessions for the beginning or end of the month. Instead, choose the 15th or a date near to it. Consider using one of the many debt tracking apps to measure how well you’re staying on course.