Debt elimination takes time and patience; avoid quick-fixes that can scar your credit report.
Some consumers dream about the day when they're no longer saddled with thousands of dollars in debt. The elimination of debt is possible, but takes time, determination and discipline. Learn eliminate debt with tips and advice for reducing debt loads, steering clear of debt elimination scams and learning to live within your means.
Take Stock
The first step toward the elimination of debt is to determine how much is owed. Collect all credit card statements, student loan statements, home mortgage information and other documents related to your debt load, noting all balances and interest rates. This step will help you determine a plan of action, since you'll want to pay down the highest balances first, but can also motivate you to continue paying down debt as you watch balances shrink.
Outside Help
Consumers with large debt loads may want to seek outside help when working on debt elimination. Credit card counseling services can help you formulate repayment plans and negotiate with lenders for reduced payments or interest rates. Because information may appear on credit reports as a negative mark, this debt elimination option should be reserved for emergency situations.
Realism
It's helpful to stay motivated when paying down your debt, while taking a realistic approach to repayment. If you overpay debt obligations without leaving enough funds for typical life expenses like groceries or gas, you'll soon be reaching for the credit card again for a quick fix solution in between paychecks. Understand that it will take time and patience for complete debt elimination and credit score recovery.
Bankruptcy
Don't think of bankruptcy as an easy fix for the elimination of debt. Bankruptcy leaves a dark mark on your credit report for years, making it difficult or impossible to obtain an apartment, car loan, traditional bank account or credit card. Some loans and debts aren't eliminated during bankruptcy agreements; student loans, for example, are typically exclude from bankruptcy negotiations.
Scams
Keep in mind that there are nefarious debt-elimination scams out there, so be cautious when turning to professional assistance when getting rid of debt. Companies advertising that they're approved or certified by the Federal Reserve are offering misleading information; this agency doesn't certify commercial agencies assisting with debt elimination, according to the Board of Governors of the Federal Reserve System.
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