How do I get out of Debt?

If you are struggling with debt, you'll probably be wondering where you should start. A budget can be the first step in helping you get out of debt, as you'll be aware of the basics of your own personal finance, such as your income and outgoings.

This will then put you in a position to either manage your budget better or, if necessary, to find help from experienced counsellors.

Debt Settlement & Credit Repair

In many cities and towns, you will find voluntary agencies who are experienced in the management of finance and can help you to find a solution to your personal debt problems.

If you're anxious and are wondering if you may even have to file for bankruptcy, the staff from these voluntary bodies can often help in the negotiation regarding your credit card debt.

In particular, they'll help you to know which bills you must try and keep paying and which ones can wait.  This can be particularly helpful when you're getting phone calls from numerous agencies chasing their money.

Re-Financing - Debt Consolidation

If you are a homeowner, you may wish to consider re-financing to consolidate your existing debts.

The advantage of this is that you can consolidate higher interest debts, such as your credit cards, under a lower interest loan.

What is Debt Consolidation?

When a homeowner re-finances his home for the purpose of debt consolidation, he is not actually consolidating the debt in the true sense of the word. The existing debts are actually repaid by the debt consolidation loan. Although the total amount of debt remains constant the individual debts are repaid by the new loan.

Prior to the debt consolidation the homeowner may have been repaying a monthly debt to one or more credit card companies, car payments,  student loans or any number of other lenders but now the homeowner is repaying one debt to the mortgage lender who provided the debt consolidation loan.

The new loan will be subject to the applicable loan terms including interest rates and repayment period. Any terms associated with the individual loans are no longer valid as each of these loans has been repaid in full.

How Much Do You Pay ?

Most people consider debt consolidation in order to reduce their monthly payments.

However, you need to consider that you may end up paying more in the long term, but that it may certainly help you to manage your finances in the short term.

Will Re-Financing Improve Your Financial Situation?

If you are considering re-financing for the purpose of debt consolidation should carefully consider whether or not their financial situation will be improved by re-financing. This is important because some homeowners may opt to re-finance because it increases their monthly cash flow even if it does not result in an overall cost savings.

You can find plenty of  mortgage calculators available on the internet to help you estimate your monthly repayments. 

Resources

Christian Debt Counselling - advice ...

Living within your means - offers the opportunity to develop a workable plan together with the tools you need to carry it out. home budgeting forms

Family budget worksheets - discover where your money is going. Figure out where you spending your hard earned income and determine how to reduce your household expenses. Having the tools to help you get started is important, can help you analyze your monthly budget, reduce debt and start investing. 

Debt Free - creating a plan to being debt free and staying financially sound is achievable.  It's not about debt settlement and credit repair or credit card and debt settlement - or even eating macaroni for three years.

Credit Repair -

• Budget Living
• Debt Settlement and Credit Repair