Five Effective Debt Plans to Handle Your Pending Debt Payments
It’s easy to pretend everything is fine but it’s crucial to accept the situation or else, you’ll remain stuck in this vicious cycle. No matter how much you pretend that everything is okay, your debt is going to catch up with you one day.
Thus, it’s time you stop burying your head in the sand and start working to improve your financial situation. It is only possible after you get done with your debt. Now the question is, how to get rid of debt? How to pay off all your pending debt payments?
Well, there are many effective debt plans that can help you out. Have a look:
Let’s talk about credit card debt first as it’s the most difficult one to handle. Credit cards come with a high-interest rate; therefore, credit card debt or loans are the most difficult to pay off.
Not to mention, in case you’re unable to make your monthly debt payments, your creditor will come and eat you. Balance transfer can help you in this situation. In this method, you pay your credit card debt using another card by transferring the balance.
Individual Voluntary Arrangement (IVA)
One of the primary concerns for most people is aggressive debt collections. Many people are unable to make debt payments at the start of every month. In such a desperate situation, an individual voluntary arrangement (IVA) can help.
It’s a binding, legal agreement between you and your creditor that not only buys you time but also puts a full stop to aggressive debt collections. With an IVA, your creditor cannot force you to do anything prior to the debt repayment date due to the legal parameters, so you’ll be at peace.
The Debt Snowball
For those who have multiple debts hanging on their heads, it would be great to adopt the debt snowball method. It’s a simple process that will organize your debt repayments and keep you motivated along the way.
In this method, you start with repaying the smallest debt first. Once you get done with it, you jump to the second smallest. This way, it keeps providing you with instant gratification, so you remain motivated.
The Debt Avalanche
Another effective debt plan is the debt avalanche method. It works well for people who have debts with high-interest rates. As you know, the interest fee highly complicates the matter, making things worse for you.
The debt avalanche method can speed up the process of paying off your debt along with the interest fee. How? You may minimum debt payments on all your debts and the amount you’re left with goes to the debt with the highest interest rate.
If you wish to take on a legal way to get rid of your debt, you should try debt settlement. It’s a legal arrangement with your creditor where you settle the debt according to the amount you can pay and the rest is waived.
This method usually involves 10-50% of debt relief. It mostly works best for debts with high-interest rates. For this, you can hire an attorney or a financial consultant to negotiate with your creditor on your behalf.
Lastly, please remember to research thoroughly before choosing a debt plan. Rest assured, all these methods are effective. Best of luck!