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15 DEBT SOLUTIONS WHEN BROKE

By sbanderas | January 8 2019
Categories: Financial Tips

Being in debt is a really bad situation for anyone. The worst case scenario is being in debt but has no money to settle your debts. Being broke in a bad death situation can really be one of the most challenging periods of your life. Is it possible to pay off your debt, especially, when you’re broke?

Hiding is not even an option because the more you hide. The more challenging it will be to solve the problem. For instance, your inability to make even the smallest payments when it comes to your credit card will lead to the accumulation of late fees which will cause the rates on your debts to rise, thereby, negatively affecting your credit score.

The quest to solve a bad debt situation is nerve-racking, and someone who has very little or no money to pay off what is owed will constantly languish in a circle of frustration.

However, it is possible to clear up a bad debt situation even if you have no money and it involves you making some significant sacrifices and taking some important steps. In this article, we will be giving you 15 fantastic ways to settle your debts even if you are broke. Sit back and relax as we take you through the steps –

  1. Draft out a budget

One of the first steps to settling your bad debts is to come up with a budget as this will assist you in reaching more rational decisions regarding your finance and help you to decide the number of resources you are able to commit towards paying off debt solutions budgetyour debt every month.

Trying to use your head as expenses manager will only be a setback. But when you put all the numbers out on a sheet of paper. You will be able to make a better analysis without much reliance on your own head. A budget is one of the best ways for you to analyze and determine the areas where you can make some sacrifices so that you can limit some expenditure in order to get more money to commit towards paying off your debt.

 

  1. Cut down on overspending

There’s a very big difference between actually being broke and being overspent. Most of the time, most persons use the word “broke” as a way of describing the predicament after they have made so many expenses on things that they do not really need or things that have nothing to do with their bills.

If that is your case, then, all hope is not lost because you could make setting changes with regards to your spending habits in order to free up some more money to commit towards paying your debt. If you are in a bad situation and are broke. You must stop watching your condition buy spending on irrelevant things.

 

  1. Draw up a plan

One of the first steps to settling your debt is to draft a plan regardless of what your financial situation is even if it is not possible to begin making payments immediately. In drafting out your plan, 3 things u should list out what is owed, what the balance is, and what the interest rate is.

Then, begin by placing your accounts in order of priority. Placing the ones you wish to pay off first at the top of the list. You can place the debts with high interest rates at the top of the list while the lowest balances come last and vice versa. The idea here is to make the most payment on an account while you make minimum payments on other accounts.

 

  1. Avoid adding to your debt

Make cuts on your credit cards. Desist from making applications for additional loans. So that reduces your tendency to accumulate more debt. As long as additions are made your balances you will continue to remain in debt. The more your debts, the money payments to be made and this stretches your income even more.

For someone who is broke, it can be very difficult to survive without credit cards. However, you need to show discipline and seriousness with regards to paying off debts, and that is the reason that you must find ways to survive on just your income.

 

  1. Cut down on your expenditure

There should be no guesswork here. Take a look at your bank statement and carry out an analysis to determine where you make most of your expenses every month.

Each time you make a purchase, determine if it is something that you really need or if it is an expense that you can cut back on. Keep in mind that there is a reason for this which is to clear up your debts and this is a worthwhile objective. At the moment, some sacrifices will have to be made until you have settled your debts.

 

  1. Grow your income where possible

You must find ways to add to your income as this can help you to achieve two important things. First, your reliance on credit cards in order to survive will stop. You have available income to foot the bills of your needs.

Secondly, there’ll be a little more money for you to commit towards paying off your debt. One way to grow your income each too find a second job, become a freelancer, sell certain items online, monetize your hobby, set up a small business, and more.

 

  1. Request for lower rates

One thing about high-interest rates is that paying off what you owe becomes more difficult due to the fact that a greater proportion of your payments every month are channeled towards charges on interest. If the interest rates are lowered, this will help to lower your monthly interest which will facilitate the rate at which the pay off debts.debt solutions banker

If you have a perfect credit score and a good history that shows that you never miss your payments. This could increase your chances of being given lower interest rates. However, if the issuer refuses to lower the rate, you could consider moving your balance to another lower-interest credit card. Then again, you could benefit from offers such as a zero percent balance transfer.

 

  1. Make timely payments

When you make late payments, your debt payment process becomes slowed down. By the next month, you will have to make double payments in addition to paying a fee for your lateness. Then again, if you make late payments twice in a row, this will result in your paying a penalty rate, and this makes it even more challenging to clear up your debts.

 

  1. Get professional help

You should consider counseling for consumer credit. There are agencies that specialize in credit counseling, and you can solicit their help to help you with an analysis of your finances and help you come up with a budget which will help you to make your monthly payments.

Your credit counselor, in the event that you cannot make your payments. Will take steps to come up with a management plan on your behalf with the creditors. Debt management plans come with advantages such as reduced payments every month to the creditors. What happens here is that every month you make the payments to your counselor. Your counselor, then, takes the payments and forwards it to all the creditors.

 

  1. Reduce your anxiety by being objective

When you try to picture your overall debt situation. You can easily become overwhelmed. However, keep it in mind that tackling everything in an instant will never be possible.

So, place your focus on tackling a debt before moving on to the next one as this will help to facilitate your repayment. Be positive and keep track of your progress. Where you make even little successes. Let them motivate you. Continue going at your debts until you settle everything.

 

  1. Deal with the smaller debts first

Committing your energies towards paying off the debts that come with high interest rates first is probably not the most effective technique for you.

If you can pay off the smaller balances you will have more resources to commit towards paying off the higher debts. Carry out an analysis and outline the debts which you can pay up now and that which you will pay up later. With progress in paying off the smaller balances. Channel more money into paying off other balances.

 

  1. Pay what you can

There is a need for you to top up your payments since the greater part of what you pay every month is dedicated to interest. This will help you to make significant progress and relation to settling the debts that come with high-interest rates.

You could try making minimum payments for other debts while channeling extra money towards paying a debt that comes with high interest. Continue this process until all your debts have been cleared.

 

  1. More cut downs on expenditure

If need be, you should cut down more expenditure where possible as this will help you to save more money. In fact, you should deprive yourself of some luxuries. Here are some things that you can do to cut down on certain expenditures to save more money towards paying off your debts.

Have your cable disconnected and, where possible, eat at home, not at restaurants. Cut down on the cigarette sticks that you smoke and reduce your coffee or soda intake. Make reductions in phone plans.debt solutions cut

If need be, carry your lunch along with you to work. Draw up a shopping list when going to the grocery shop. Take advantage of coupons to buy only the things that you need. Try as much as possible to cut down on unnecessary driving. Sell your SUV and get a cheaper car that consumes little. Compare prices before getting repairs done on your car, etc.

 

  1. Delay your payments if necessary

If you find it quite a big challenge to locate any more areas to squeeze some more money from your budget and find it impossible to make any extra income, then, delaying your payments for some months may be the next option.

However, never stop making the minimum payments with regards to your credit card as this will help to maintain a good credit score and prevent debt growth.

Truly, it will look as though you are wasting valuable money by paying interest, but the truth is that if it is impossible to make payments on your high-interest debts at the moment, then, it simply is. After a couple of months, conduct a fresh analysis of your income and expenditure and see if the situation has improved.

 

  1. Cut down your housing costs

Lowering the cost of your housing is another good way to lower your debt and improve your chances of paying back what you owe. There are valuable tips for you with regards to how you can reduce the costs that accrue from the housing. You can begin by relocating to a house that comes with lower rent.

Also, consider mortgage refinancing to get lower interest rates. There’s nothing wrong with getting a roommate and you should try to do some home repairs by yourself. Take steps to carry out maintenance of your lawn by yourself. The cleaner for your kitchen can be made by you.

Try to cut down on the cost of internet or cable. All premium subscriptions should be canceled. Request for promotional rates or simply cut it off. If you have to see movies on demand or setting TV shows which are of interest to you, you can simply download it from the website of the network.

 

CONCLUSION

No matter how broke you are how bleak your financial situation looks, you need to take conscious steps to ensure that you pay off your debt.

Of course, it can be difficult to maintain your focus when you have little or no money which is why we at Car Title Loans California are here to help anyone going through financial emergencies. We

You will reflect that decision in your practices with regards to how you handle your finances so that you can become debt-free once again.