Have you racked up too much debt? Unfortunately, many people have. While the media likes to portray those in debt as people who spent carelessly and foolishly, that isn’t always the case. Job loss, education, and medical bills can also land people deeply in debt.
If you have more debt than you can comfortably handle, at this point it really doesn’t matter how you got the debt. What matters is, how can you get out of debt?
If you are like many, you have probably spent nights at your computer with your spreadsheets and online debt calculator trying to determine how to get out of the mess you are in. How much do you have to pay per month? How long will paying off the debt take you?
Worst case, and most likely, scenario, you find that you don’t have enough money to make the payments every month. In that case, you have a few options:
1. Call your creditors to negotiate your rates and payments. This can be difficult to do if you don’t like confrontation, but your creditors would prefer some payment rather than no payment. Taking this step can save you on both interest and perhaps the amount you ultimately owe. Your credit rating will take a hit, but it will rebound in a few years.
2. Work with a debt relief provider. A debt relief provider such as http://debt.ca/ can set you up on a debt repayment plan and negotiate with your creditors on your behalf. This is a great way to go if you are uncomfortable talking to your creditors directly.
3. File bankruptcy. For most people, this should be a last resort. Keep in mind that student loans are not dischargeable in bankruptcy. Also, your credit rating will be affected for 7 years. You may find everyday situations such as renting an apartment or buying a car difficult at best. While bankruptcy should be your last resort, for some, it is an option they must take.
While you can’t imagine being out of debt when you are deeply mired in it, that day can come. The key is to pick the course of action that is best for you and your financial situation.