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Deal with your anxiety/insomnia/depression
If your financial issues cause you anxiety, depression or insomnia, deal with them as quickly as possible so they don't prevent you from getting your finances in order. Check solutions for anxiety, depression, and insomnia.
Make a list of all your debts and their interest rates
Make sure you even know how much you owe, to whom, and what is the interest rate of a certain loan, credit debt or anything else. When you have a clear picture of all your debts, it will be easier for you to decide your next step.
DMP can be a great solution for you if you don't know how to deal with your debt. When you enroll in DMP, you receive free education, repayment plan, budgeting, intermediation between you and your creditors, and many other things. Check if you are eligible for DMP at credit.org.
Assess all your income and expenses. Hopefully, you will have something left after you pay for food, rent, bills, and any other expenses you cannot avoid. Everything that's left should go to debt repayment. When you know how much money you can use every month to repay your debt, you will also know how long will it take you to get rid of it and when can you start repaying your other debts, if you have them. This is good for you to know. And for your creditors as well.
Ask your bank or credit card company to reduce your interest rate
Depending on how long have you been with a certain bank or credit company, and how good of a client you've been, you might be able to lower your interest rate simply by asking your bank or credit card company for a lower interest rate.
There is usually a free phone number you can try or you can go to your bank or credit card company personally. If at first you don't succeed, don't give up. Ask to speak to a manager and explain your situation. Again, if you've been a good client so far, they just might lower your interest rate for a couple of percents.
If tackling your debt all on your own proves too difficult for you, you might want to try talking to a professional. A credit counselor can help you with managing your debt, setting up your budget, and providing you with various options.
To find a respectable counseling agency, go to justice.gov.
Instead of paying your mortgage once a month, you could try paying half of it every two weeks. That way, not only will you save on interests over the time, but you will also be able to net 13 full payments per year instead of 12, which will further save you on interests and decrease the time you need to pay off your mortgage.
Talk to your bank and see if such an arrangement can be done.
Always take care of your credit score. No matter how bad your financial situation is, if possible, try not to do anything that will destroy your credit score. You will need it for managing your debt and for any loans and credits you might take in the future. For maintaining your credit score, check credit score solutions.
Debt settlement is one of the last options for getting rid of your debt as it will seriously damage your credit score. But, sometimes it is the best option for you. Basically, your creditors and you agree that you will pay a certain percentage of your debt and it will count as if you repaid your entire debt.
Before using this option, talk to your credit counselor to see if this is the best option for you.
It's not the most pleasant thing to do, but it certainly beats getting a high-interest loan from a bank or credit card company. Explain your situation to your friends and family and if needed, make an official agreement, with notary public present, so the person who lends you the money knows you are serious about repaying your debt to them. If needed, offer a collateral.
While repaying your debts should be a priority, spare a certain amount (as much as you can) for your emergency fund. You never know when will you need it for medical bills or some other situation that requires lots of money right away. Otherwise, you will further increase your debt.
Chapter 7 is suitable for individual or businesses who have no other way to repay their debts except to liquidate their nonexempt property and proceed earnings to their creditors. Certain requirements have to be met for you to file for chapter 7. For more about chapter 7 and to see if you are eligible for it, visit uscourts.gov
Chapter 13 offers you a repayment plan that usually lasts from 3 to 5 years. It's suitable for individuals or small business owners who have steady incomes and are able to repay at least portion of the debt. For more information, visit uscourts.gov.