Become Debt Free

Written by Jill Morrison
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Many people are looking for strategies to aid them in becoming debt free. Debt is a common problem in America and continues to increase each year. Studies have shown that average debt amounts have nearly doubled in the last decade. Debt can be accumulated from sources such as credit cards, loans, medical bills, child care, lawsuits, and collections. Getting out of debt can be a difficult process, but many services are available to provide debt sufferers with options.

Methods for Becoming Debt Free

In order to become debt free, financial situations must be evaluated carefully. For cases of mild debt, better budgeting and spending practices will usually help. Counselors are available to provide information and advice about debt problems and how to solve them. Sometimes, it is a good idea to get an outside opinion on how to handle debt problems. Talking through solutions can also help to relieve the stress that may be associated with bad debt.

For more extreme cases of debt, options such as debt consolidation loans, debt settlements, or bankruptcy may be considered. Debt settlements are usually the best option because they can help to reduce debt totals drastically. When debt totals are reduced, they are then much easier to pay off quickly. Debt settlements are also beneficial because they can help to reduce interest rates, waive charges, and reduce pay-off times by up to 70 percent.

Debt consolidation is similar to debt settlement because it can be used to reduce interest rates and fees while consolidating debts. However, debt consolidation loans do not reduce debt totals like debt settlements. Sometimes, they may even contribute to worse debt problems because of additional charges. Bankruptcy is another option that should only be considered as a last resort. Bankruptcy is dangerous because it can damage credit ratings and prevent people from getting credit for seven years or more.

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