How to get out of debt without filing bankruptcy?

Credit counseling has helped many debtors get out of debt by suggesting debt relief options that can keep you away from bankruptcy. Credit counselors often hear such questions like “how to get out of debt without filing bankruptcy?” There are many ways in which you can avoid bankruptcy. The section below makes you aware of the debt solutions that can keep bankruptcy at bay.

How to get out of debt with debt help programs?

There are debt relief programs that you can opt for. These include debt settlement, debt consolidation, debt management or DMP and credit counseling. These programs are offered by debt help companies. They may or may not charge fees for their services depending on whether they are for-profit or non-profit making firms. Some of these companies offer credit counseling too.

If you enroll for these debt help options, your debt load is reduced to a considerable extent. As a result of negotiation, creditors agree to reduce the interest rate which lowers monthly payments too. In debt settlement, the total debt amount you owe is reduced by as much as 50%.

Debt consolidation loans can help you too

You can also take out a debt consolidation loan of an amount that is equal to the sum of the individual debts taken together. It may be secured or unsecured depending on whether you use collateral.

How to get out of debt on your own?

If you are confident enough to tackle debts on your own, you can take the following measures so that your debts don’t pile up. Given below are few steps you can take to get out of debt on your own –

• Don’t exceed credit limits

If you are using credit cards, make sure you don’t exceed credit limits. And use plastic money less frequently. Using credit cards make you a spendthrift and impulsive. So, if you use cash, you tend to spend less.

• Make more than the minimum payment each month

When you use credit cards, you are required to pay a minimum amount on your credit card bills. If you pay more than the minimum, you will be able to pay off debts much faster.

• Budget your finances

The importance of preparing a budget cannot be undermined. Working out a budget is easy but following it religiously requires a lot of determination. Write down your income and expenses. Assign your money by prioritizing your financial obligations. In this way you will be able to keep out expenses that can be deferred or curtailed.

Whether you are taking out a consolidation loan, enrolling for a debt help program, taking credit counseling sessions or trying to do away with debts on your own, you need to exercise a lot of perseverance so that you can take the debt help process to completion. You need to play an equally important part along with the debt help professionals.