Debt Consolidation And A Four-step Plan To Get Out Of Debt

According to statistics, today the average American faces a higher debt load than ever before. As debt loads continue to spiral, people will find it more and more difficult to get themselves out of debt — an important goal for anyone who wants to retire safely, to make a major purchase of a house or car, or be financially secure. Following are some simple tips that can help you live the debt-free lifestyle you have always dreamed of.

First, make sure the cards are destroyed. Although this looks like an overly simplistic suggestion, for those who face enormous debt loads, an essential step towards debt recovery is the prevention of any new debts to occur. Therefore, making sure you are not tempted to use your credit card is important. Alternatively, you might ask a close friend or relative to guard one of your cards for emergencies, getting rid of all your other credit cards.

2. Meet with a financial counselor, someone who is specially trained for helping people that are having problems with debt as you are. These professionals will help you form a plan that you can follow, step-by-step, to come out from under your burden of debt, and may even be able to give you some emotional support in the process. Many times these services are free through a non-profit organization or a government agency.

3. Choose debts to pay off wisely: this is a step often ignored by debtors, who are all too eager to rid themselves quickly of debt. They become ambitious, and pay off their first few debts haphazardly. Later, they often lose steam and stop paying off debts, leaving themselves in the same situation in which they began. Instead, with the help of your financial counselor, pick the right debts to pay off first. Select debts that are affordable to pay off, which are accruing at a high rate, and/or which are affecting your credit most severely.

4. The fourth and most important step is debt consolidation — the process of lumping together smaller debts into a single, larger debt. To most people with debt problems, paying off the total debt may seem an insurmountable task. Through the process of debt consolidation, a manageable monthly payment can be obtained. Your financial counselor can assist you in finding an agency from which to take out a debt consolidation loan. The smaller debts are repaid with the consolidation loan, leaving you a single, smaller monthly payment instead of a large number of more expensive payments.

Whether you owe a little or a lot, whether you are in your twenties or almost to retirement, and whether you are just making it or making six figures, debt reduction and debt consolidation will benefit you tremendously. Imagine how freeing it will feel to purchase that house or car, to be able to retire well, or to send your daughter or son off to college, without the fear of chronically increasing debt problems.

Statistics show that the average American today is under a much greater burden of debt than ever before. Here is a summary of tips to leading the debt-free life you’ve dreamed of: 1. First, keep temptation at bay by destroying your credit cards. 2. Second, see a financial counselor. 3. Third, with the help of a financial counselor, carefully select which debts to pay off first. 4. The fourth step is debt consolidation using a consolidation debt loan, leaving you a single, smaller monthly payment instead of a large number of more expensive payments. Reducing your debt will give you a feeling of freedom from an otherwise oppressive debt burden.

- Bruno Auger

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