There is no magic formula when it comes to debt relief. However, there are some strategies that you can use to get your debt paid off and avoid getting into debt again.
1. Debt Settlement
The best way to consolidate your debt is to do a settlement. A lot of lenders will settle for amounts that are less than what you owe. This is especially true if you are going to go through a company that specializes in debt solutions is fort McMurray. They will talk to your lenders where you have unsecured debts. They will then negotiate with those lenders to come up with an amount to settle your debt. The company will then settle your debt for you, and then you will have to pay them a monthly fee depending on the plan that you chose with them. You will have to approve the payment plan, but doing it this way allows you to get rid of all your debt quickly and affordably without having to deal with different lenders.
2. Borrowing Against Your Home
Another viable option to pay down your debt is to borrow against your home. You have three options, you can get a second mortgage, refinance the home, or get an equity line of credit. You would then use this money to pay down your debts. You will then just have one monthly payment that will be less than the payments you are making. You will need to make sure that you have equity in your home. If you have been in your home for less than ten years, you may not be able to do this. Check with your mortgage broker to see if you qualify for home equity at this time.
3. Using Money from Your Retirement Account
If you have a 401(k) plan, you may be able to borrow money from it. Most plans out there will allow you to borrow up to 50% of what you have or $50,000. You will have around five years to pay the money unless you leave the plan, where you will only have 60 days to repay the loan.
4. Use Your Whole Life Insurance Policy
Your whole life insurance will build up cash value over the years. You can borrow this money to pay off your debt. Most policies do not have a time limit for when you have to pay the money back. If you fail to pay some back, this will be subtracted from your death benefit. You will need to speak with your life insurance company to determine how much you can borrow and how you can pay this money back. Once you have the money, use it to pay all your debt down.
5. Come Up with A Financial Budget
Another great way to get out of debt is to sit down and come up with a monthly budget. If you can cut some things out of your budget and apply that money towards your debt, it will help you to get out of debt faster. For example, if you have cable, or you go out to eat a lot, try cutting those out. You should not eat out more than once a month, and if you can cut it out altogether for at least until you get your debt paid down, it will help. Look for cheaper alternatives to cable, like using a streaming service. If you can switch out products that you use for cheaper versions, this will also help.
You will also want to get a list of your bills for each month. Figure out what debts need to be paid off first. If you have extra wiggle room in your budget, consider paying a double payment every couple of months. This will help you to get out of debt faster. Also, you can talk to your lenders yourself and see if there is any way you can get your bill adjusted. For example, if you have medical debt, there may be discounts that you can get to help pay your bill off faster.
Getting out of debt will help you to save money for the future and not have to pay a ton of bills each month. Remember to seek help from a debt consolidation company if you need to and set a monthly budget for your finances. You will be amazed at how quickly you get out of debt.