Debt free programs are everywhere and all of them are meant to help people get out of debt. The only thing to do is to pick the right one. How does one do that? There's a lot of studying to do, I know. But it is better to do it the correct way. There is a lot of calculation to do.
What are these debt free programs? Yes, I will list them down here. But first, let me tell you that all these need a fixed monthly payment of sort. As soon as I get some time, I will put up a review for each one so that you will get the necessary help in the choice that fits you the best. Here they are:
debt management plans
credit counseling
debt consolidation
debt settlement
debt acceleration plan
equity loans
Having a list like the above is easier said than done. So how do go about getting through this list of debt free programs? Well, let's take it slowly, shall we? First, let's figure out how we can do this. What steps are we going to take in order to apply to those solutions and get out of debt?
1. First, write down all what you owe. Gather up all the statements. List them down from the greatest to the lowest amount and their corresponding interest rate. Include the monthly amount you pay for each one. As soon as you have them all in a list, things seem easy enough to see how you can apply this to the different debt free plans.
2. Now, decide how to make payments. There are two ways to handle this. One way is to pay the smallest amount first but make the payment larger while paying the minimum due on the others. Or pay off the one with the highest interest first.
3. Then once the credit cards are paid off, eliminate them but don't close the account as this may lower your FICO Score. Just keep it out of the wallet so you will not be tempted to use it. Rolling the credit card balance from one card to another is not a good idea either.
4. Get your credit score which if it is good will help in negotiating the terms of the agreement among the different debt free programs. We are allowed to get a free credit score once a year. If you find something there that may not be right, find out from the merchant why and get it corrected, if possible.
5. The fifth step is to check out your budgeting plan. Keep a record of the money coming in and the money going out. I keep a spreadsheet to keep our family's budget. This way I know exactly how much money we have left for discretionary spending. Most of all, cut down on the wild spending ways.
6. Now check the equity in your home as an equity loan has lower interest and the interest may be tax deductible. But there is a downside to this. Why? Because some people use the equity loan to pay off the credit cards and then use the cards again bringing up the debt once more. So be careful with this.
7. Now after you've done all of these and you feel you need some assistance, go and get help by all means. You can go through the different debt free programs and see which one will work the best for you. You have all the information you need now to make the right decision.
Now that you have all the steps and all the information you need, proceed with negotiating the terms of payment with any of the programs. Get estimates from each one if you can after getting all the facts. Then if you need an adviser to help you make a decision, go and get one.
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