Debt relief are what we call solutions to get out of debt, the most common being credit card debts. Most of these solutions will help us out in the long run but there are pointers that we need to take note of in order to make sure that we don’t land ourselves on hot soup in our bid to actually save ourselves from financial difficulties.
1. Pay just the minimum credit card payments to get out of debt
You think that at least you’re doing something, right? You’re paying that minimum figure, someday your cards will be paid off.. True, but when is that ‘someday’ that you can get out of debt? The interest rate imposed isn’t exactly low and by paying just the minimum amount, your debts are stretched for a long time and goodness knows how much interest you have paid by the end.
2. Ask mum, dad, brother, uncle and friends for debt relief
In other words, never ask friends and family for debt relief. Although you don’t have to pay interests and no one bugs you for repayment, this will only lead to strained relationships. For all you know, they are actually in need of your repayment but can’t bring themselves to ask for it from you, while you happily go on delaying payment as well.
3. Applying for a debt consolidation loan to get out of debt
Yes, it does seems like an ideal solution to merge all your debt accounts into one and let just one company take care of it all, possibly at an even lower interest rate than what you need to pay to those various companies. This could actually be a good solution, only if you read the fine print. Else, you are stuck with a potentially pocket-emptying consolidation loan.
4. Engage a credit counsellor with a high fee to get out of debt
Yes, credit counsellor can actually help you with debt management by providing consumer credit counselling. But beware of those who ask you to pay upfront or those who charge ridiculous fees. Ask around and compare before deciding on a credit counsellor who is sure to be able to advise you on your financial situation.
5. Bankruptcy
This might sound like an easy way out but financial advisors do not usually suggest this as a debt relief. While being a bankrupt can erase some of your debts, you cannot be sure however that you can still keep your property in the process. Besides, your credit record is also tarnished.
Prevention is always better than cure. Avoid getting into debt but if you somehow can’t, then educate yourself and find the best way of debt relief and get out of debt.
Your suggestion?