Ways to Get Out of Debt

Debt is a result of spending more than what can be afforded. Many people get into debts due to a careless spending habit and unplanned use of money. A life without debt is stress-less and once you are into it, hell breaks loose. There is no easy way to get out of debt without paying back the money. Read on to know more about ways to get out of debts.

A life filled with debt is a life filled with stress and this sign of danger has a serious toll on the health. Debt is the means of using purchasing power before earning the payment. This is about spending the future earning today and paying them in the future. While spending the money, most people don t e!en think of the ways to get out of debt. The Cycle of Debt The word debt originates from the old "rench word #dette #and $atin #debere# which means to owe, from #de habere# meaning to ha!e, re-ntroduced in the %&th century. A debt is granted with an e'pected repayment plus interest with or without security. A debt cycle begins when a creditor agrees to lend a sum to a debtor, in return of an interest on the debt. The cycle of bank debt begins with an agreement between the debtor and the creditor (bank or indi!idual creditor), regarding the standard of the debt repayment. The payment is designated as the total sum of money that includes the principal with the agreed interest, either in cash or goods. The repayment is made in installments, with the increments included, o!er a period of time. *t can also be paid in lump-sum amount. +redit card companies and debt corporations ha!e successfully used debt as a lending power for their business. 10 Ways to Get Out of Debt These are some of the ways to get out of debt by using and planning the finances carefully. There is no direct way of getting out of debts without paying or bankruptcy filing. %. Use the assets to clear the debts, *f the assets owned has significant e-uity, then they can be used to clear a part or whole of the bad debts. The debt can be controlled by using a part of the asset to clear a part of the debt and bringing it to a manageable le!el. +onsiderable amount of money can be sa!ed if the high interest credit card debt is con!erted to a lower cost one.

.. Second job, The money from a second /ob can be used to clear some of the business
debt. A list of the debt with the interest rate can be made and those with higher rates can

be paid off first. 0. Zero credit cards, The best way to cut debt is to immediately destroy all the cards and retain one card for emergency use. 1. Repay ent plan, The e'penses should be cut and the sa!ed money must be used to pay those debts with high interest first. 2. Credit consolidation loan, A credit consolidation loan can be used to pay off all the debts and ha!e a new smaller loan with a lower interest. 3. Debt counselor, A debt counselor can assist in the control of the spiraling debt. The counselor can impro!e the credit rating as credit bureaus will be aware of a credit plan at work. The payments will be organi4ed and the lower payment le!el will be decreased to default in payment. +ounselors can also help in formulating a plan which will ensure that the credit will be cleared within a stipulated period. &. Credit card debt consolidation, A consolidated payment plan can be set up with the creditors to enable a good credit rating. *t is similar to a credit consolidation loan e'cept money is not borrowed to pay off the creditors. 5. !u p su pay ent to the creditors, *f a relati!e or someone is ready to help in clearing the debt, the creditor can be approached to pay off a percentage of the loan and the remainder written off. 6ome creditors will be willing to accept this offer rather than ha!e a bankruptcy. 7. "an#ruptcy under chapter 1$, *f the credit accumulated comes under the pro!isions in chapter %0 bankruptcy, then the pro!ision can get a relief from a part of the credit. 10. "an#ruptcy under chapter %, The time for a new start has come as there is no option other than a full bankruptcy. The ways to get out of debts are ne!er easy but the !olume can be reduced or lighten with a little planning. 6till, fight on and hope to get a good credit standing and start a new line of credit. All the best8