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Many people are in debt today due to lost jobs, high unemployment rates, or medical bills. If you’re struggling to pay your debts, there are a few things you can do to get rid of debt and keep collection agencies at bay.
One of the best ways to make money quickly is to have a garage sale. Sell off any items that you no longer use or need. You can also consider selling high-ticket items such as that 60-inch plasma television set you own. Jewelry, designer clothes, antique furniture, and other items of value are also good items to sell to raise money, and can be easily sold on eBay. If you have old or unwanted phones, tablets or other electronics, uSell is a great place to sell them, as they make it easier to ship the electronics back and forth.
The best way to reduce debt is to not take on any more. You can do this by making a budget that details every monthly bill or expense and every monthly source of income. Having a clearer and organized view of your income and expenses will help you to mange your money better and pay off your debts. Sites like Manilla can help you organize your finances for free, which is a good place to start.
People in debt should pay off the smaller debts first, if possible. This immediately reduces the number of companies you owe money to while at the same helping you to feel you are making progress in getting your finances in order. You can also use a credit card with a 0% intro APR to pay off your debt, so you can make sure you are paying off the principal balance without getting hit with interest.
If it’s getting harder to make monthly mortgage or car payments, then you can refinance these loans. Contact the bank that holds your loan and request refinancing. This process requires completing a lot of forms, but if approved, you can often get a lower interest rate. The lower rate reduces your monthly payments. If you current bank is not willing to refinance, there are numerous other banks and mortgage companies willing to refinance loans.
Your credit score is the #1 factor in determining your interest rate, so if your credit score is struggling, taking the steps to improve it can help in negotiating a lower interest rate. Here are some things that affect your credit score that you can do to improve it:
If you have debts with companies such as the cable company or a department store, try to make payment arrangements. Ask your creditor (the company you owe money to) when your debt will be sent to a collection agency. Some businesses give you one month to pay, while others give you three months. Offer to make small monthly payments to eliminate the debt. By making it clear that you intend to pay your debt, the creditor is less likely to send your account to a debt collector. If the creditors won’t budge, you can also contact a debt consolidation service to help lower the payments on your debt.
Debt collectors are in the habit of sending out many demand letters and making almost daily phone calls to intimidate you into paying your debts. Fortunately, you can avoid the harassment and stress of dealing with a collection agency and take control of your situation by following a few tips to improve your finances.