I need help with my debt, what are my options?

Have your debts become too much to handle? Perhaps you’re struggling to make ends meet due to circumstances out of your control, like sudden unemployment, poor health, or a relationship breakdown. Is this your first time with a financial issue and you’re not sure where to turn. Regardless of your current situation, one of the most important things you can do is to act quickly. There is always a solution to every problem and here are a few tips to help you alleviate the stress of debt and put a plan together to become debt free.

Understand where you currently stand
Before you can get out of your financial issues you need to know where you are currently and how you got there. Establish exactly where your money is going. Create a list of your debts, including interest rates, the amount you owe and the amount of your monthly payment. Be sure to add all debts, both secured (like your car, boat, home) and unsecured (like credit cards, store cards & medical).

With all of this information in front of you, try creating a weekly or monthly budget. By creating a budget for yourself or family, you can start to take better control of your finances. A budget should first take into count all your essentials, such as your home, food, transportation and your utility costs and then your debts. After establishing a budget and understanding your debt, consider getting rid of the credit cards so you don’t get tempted to use them again. Instead you should create a savings account and put away as much money as you can and have this work as your emergency fund. By doing this when something does happen, you can use those funds to pay for your needs instead of the credit card.

 
Once that emergency fund is at about half your month’s salary, start paying towards debt.

Consider a Debt Consolidation
For many people a simple budget will not suffice and a different solution is needed. Depending on your unique situation and background, you may qualify for a debt consolidation solution. This is the process of consolidating all of your unsecured debts into one payment which can help make monthly payments easier and affordable. Typical debt consolidations can be made through personal loans or credit card balance transfers. When looking at these as an option, it is very important that you consider the costs you may face, including interest rates, over the limit fees, early termination & late fees.

Is Bankruptcy a Possible Solution?
Bankruptcy should be considered as a last resort but if you have reached the stage where you simply are unable to repay your creditors you should consider bankruptcy. Bankruptcy will allow you to wipe the slate clean and start all over again. Bankruptcy does have many drawbacks and consequences but is rarely as bad as people image. If you are considering bankruptcy you should discuss it thoroughly with an expert such as a bankruptcy trustee or lawyer.