How to Become Debt-Free: Solutions that Really Work

Trying to find the best debt-free solutions might seem difficult at times. However, there are ways that you can get out of debt successfully. Here are a few solutions that you could try that will really work. 

Credit Counseling

One option that you have is to join a credit counseling service. This type of service can help you set up an effective debt management plan. They will request that you fill out some paperwork with information about all of your creditors and the amount of debt that you have. They will then contact all of your creditors for you and negotiate with them on your behalf. Typically, the creditors will lower their interest rates in return for a promise of regular payments. The credit counseling company will then administer this plan for you. They will deduct a certain amount of money from your account each month and then distribute it to your creditors on your behalf. 

When considering this option, make sure that you are working with a legitimate company. There are unscrupulous companies in this industry that will actually make your situation worse. In order to find a legitimate company, check with the Better Business Bureau. You could also find online reviews of several of the different services that are available. You can see what other customers have to say about their service. If any of the companies ask for a fee upfront, you should be skeptical about what they have to offer.

Debt Consolidation Loan

Another option that could help you get out of debt is a debt consolidation loan. This could be done in a number of different ways. For example, you could take out a home equity loan or a life insurance policy loan to consolidate your debts. When you take out the loan, you can use the money from the loan and pay off all of your other accounts. This will eliminate all of your accounts except the new loan. 

Having all of your debt in one place will allow you to focus on it and eliminate it more quickly. You should be able to get a lower interest rate than what you were paying with your other debt accounts. This could potentially lower your monthly payment and help you eliminate the debt faster. More of your payment will be going towards the balance each month. If you get some extra money, you know exactly where to apply it with this method. 

Debt Settlement

Debt settlement is another option that you could potentially use to become debt-free. With debt settlement, you negotiate with a creditor to get them to take less than what you owe on the account. You agree to pay one lump sum, and then they close out the account.

This typically works only if the accounts are delinquent for a certain period of time. Once this happens, the creditors realize that they may not be able to get anything if you file for bankruptcy. Therefore, they are typically willing to take much less than what you owe in order to pay off the debt. 

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