5 Tips to Help You Find Relief For Your Piling Debt

If you are saddled with debt that is overwhelming your finances, you may feel helpless, with no way out. This can affect your life in many ways, including your psychological well-being, along with your physical health as stress wears down your body. However, you should understand that there are solutions to your situation. The following are five possibilities.

You Can Sell Off Personal Assets

Things you may not think you can do without, especially recreational items, are usually candidates to be sold. Things such as off-road vehicles, a motorcycle, a boat, or anything of that nature. They may relieve some of the stress you are under, but the stress that is relieved by reducing your debt will be felt more strongly. 

Some items are more of a luxury than a necessity. For example, if you have two cars in your household with two drivers, you can sell one and take public transportation. Don’t think of this as being permanent, but only temporarily until you can get out of debt. Any asset that you can sell can be used to reduce your debt.

You Can Lower Your Personal Expenses

There may be things that you don’t need or things that you are spending too much money on. You can cut back or eliminate optional expenses, such as eating out, or premium television and streaming services. Think of any service that you’re paying for that you can do yourself, such as landscaping, pool cleaning, or having your car washed. 

If you are renting, you should consider a cheaper place to live. Any expense that you can reduce or eliminate is money that can be used to reduce your debt. You should write down all of your monthly expenses, and make sure to include everything, then begin to examine where you can save money. Not only will this help you get out of debt, but the entire process can be therapeutic.

You Can Pay Off Debt Using the Snowball Technique

List all of your debts on a piece of paper. Then arrange these debts from lowest to highest. You begin by focusing on the lowest debt you owe, and paying it off while paying the minimum amount due on the other debts. 

When this first debt is paid off, you then take the monthly payment from that debt and add it to the monthly payment for the next debt on the list. All the monthly payments from the first debt that has been paid off, will be used to pay down the principal on the second debt. 

As each debt is paid off, there is an increasingly larger amount applied to the principle of the next debt. This creates a similar effect as a snowball rolling down a hill. The snowball method becomes even more powerful when it is used with selling off unneeded assets and reducing your monthly expenses.

You Can Pay Off Debt with a Consolidated Loan

This is a personal loan where you borrow enough money to pay off your outstanding debt. This type of borrowing is sometimes called loans for bad credit because your credit report is not as important as a steady source of income. There are a couple of advantages to debt consolidation loans. 

The first is that all of your debt will be paid off, and you will have a single payment to make each month. But because there’s only one lender, your monthly payment will be less than all the monthly payments for your current debts combined. This will free up some money each month and relieve financial stress in your life. 

The second advantage is that they are close-ended loans. There is a specific number of payments you make each month, then the loan is paid off. With a credit card, the majority of your monthly payment goes towards interest, not the principal, so you make little progress paying off your debt.

You Can Consider a Personal Bankruptcy

This should be your last option for debt relief. There are many negative ramifications to bankruptcy, so you need to understand what you are getting yourself into, and not just the debts you will no longer be responsible for. If you can use one of the other techniques above to get out of debt, you’re going to be in a strong, financial position after you become debt free. 

However, this may be your only choice. You should know that it’s difficult to qualify for bankruptcy. Basically, you need to be insolvent. This means you cannot meet your monthly expenses and your debt payments.

Bottom Line

If your debt is piling up, and you feel stressed, there are several ways that you can begin to get out of debt. You can sell personal assets, your expenses can be reduced, or you can use the snowball technique. You may also want to consider a personal loan to consolidate your debt. These are your best options.