Your Guide To Go Debt Free in 2014

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A person without any debt will live a happy and carefree lifestyle, at least when it comes to his or her finances. While this is a nice dream, it seems unattainable for many individuals. With these seven steps, a person in debt can regain his or her financial footing.

– Bankruptcy: Now, this is an extreme step that one must not take lightly. For starters, a person even considering bankruptcy must have no other viable options. However, if this is the case, bankruptcy will work wonders. A person will have to go to court and fill out the right forms. Usually, a person will hire a qualified lawyer who will do it on behalf of the client. Remember, one mistake can often lead to a serious problem in the court. Depending on the bankruptcy type, a person will see most or all of his or her debts wiped out in the process. Then, an individual will need to remain current on bills; after some time, one will increase their credit score and restore their good name.

List: When a person wants to clear his or her debts, they must make a list. In this, one should include all their credit card, mortgage, car loans and any other debts. When jotting down this information, a consumer will know where to get started and how to approach the issue.

Income: At the same time, one must know their income down to the nearest dollar. When calculating income, one should use their post-tax earnings and any other money they receive. When doing this, one can develop a long-term payoff plan for their debt.

Budget: To pay off old bills, one will need to set a budget. Provided the individual already listed his or her income, it is time to develop a workable budget. Now, within this budget, one should develop a serious payoff plan so they will have no trouble sticking to it in the long run. For this reason, some opt to wait a month or two, so they know how much of their income they realistically spend. With a budget in mind, one can begin paying off debt and regaining their credit score and financial footing.

Call: When calling a bank or lending institution, a client can usually get his or her rates reduced. For example, when calling a credit card company, some consumers have successfully lowered their interest rates from 25 percent down to 10 percent. This offers the customer an easy shot at paying off debt as he or she will not put all their money towards interest fees.

Balance transfer: Credit card companies routinely send balance transfer offers to loyal customers. With this, one can borrow money at a lower rate and pay off other debts. This is a quick way to cut costs and pay off old debts faster. Remember, one must exercise caution and use the balance transfer to pay off debts and not spend more money.

Spend less: When trying to get out of debt, one should cut expense to the bare minimum. When living cheaply, one can shave years off the debt repayment plan.

With these seven tips, a consumer can, with ease, get out of debt and enjoy life again. Remember, one has multiple options that will work for their unique and difficult situation.

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