Debt Free Consolidation can help save you from bankruptcy
Debt free consolidation can be very helpful for those who are unable to meet their monthly debt obligations but whose debts are current and out of control. Debt free consolidation sounds a bit frightening but it is merely a much misunderstood concept for money management and debt relief. The first step to becoming debt free is the most obvious, and yet, all too often overlooked solution Ė cut down on your spending!
Debt free consolidation is a service or program that is available to the consumer who finds themselves at the end of their rope especially when debt exceeds income. Debt free consolidation can affect the ability of the debtor to discharge debts in bankruptcy, so the decision to consolidate must be weighed carefully. Consolidation is the best way to work to a solution that keeps the creditors happy and allows the person struggling with debt to find a way out of the quagmire of debt that can so easily overcome them. Consolidation loans can be availed by securing your property and this is quite popular with lenders and British people particularly and is often used as a first line of attack for debt free consolidation.
Buy only when necessary
Cut down on your spending. Here are some tips:
- First and foremost, do not buy what you can not afford. If you and your spouse can not afford a house at the moment, do not buy it.
- Buy clothing only when it is on sale. My aunty was an extremely wealthy lady, but she would only rarely buy clothes, if absolutely necessary, and NEVER buy material unless it was in a sale!
- If youíre trying to live a debt free lifestyle then donít buy that iPhone. People do manage to live without these sorts of luxuries.
- Bankruptcy can remain on your report for up to 10 years and makes it difficult to get credit, buy a home or even get affordable life and auto insurance. Avoid bankruptcy if you possibly can by cutting down on your buying.
One of the biggest steps in the quest to live debt free is committing to a concept that frightens so many of us and that is the correct way to use credit cards. Credit cards are often the biggest sources of debt. Unsecured loans always carry a greater interest charge than secured loans and hence can cripple you much faster than secured loans; the most common and easily available unsecured loans are credit cards and signature loans.
Are you using your credit cards too much? Clues to look for are:
- Always having to use credit cards when you make a purchase.
- Only being able to make the minimum payment on cards each month.
- Going from using one credit card to using two, three, four, and then five, and never paying off the balances.
- Transferring balances from other credit cards to a new credit card that offers no charges for 6 months etc.
So how do I achieve this Debt Free Consolidation thing then?
Debt free consolidation can be achieved relatively easy, provided you are in full-time employment. Here are some tips that might help:
- Find out what you need to do to repair your credit so you can qualify for loans and credit cards.
- Itemize your highest interest debts (generally credit cards, then car payment, then mortgage, etc. Try to first concentrate on paying off the debt with the highest interest first, then go on to the next debt in the same manner.
- The best way to generate wealth and / or to stay debt free is to live within or below your means.
- Downsize your house as soon as possible if you can.
- A good rule of thumb to become debt free is to pay at least double the minimum payment.
Our desire to become debt free is incredibly powerful, even to the point that we are willing to work constantly and sacrifice all the unnecessary extras of life that most people get to enjoy. The advantage of debt free consolidation is that the interest rate can often be lower than the many interests you were previously paying.
Scott Whiskeye is a retired programmer who has now turned his hand to website design and writing articles. Some of his other current websites include a site on Mortgages and Real Estate, one on all types of insurance, and one on Weight Loss Fast.