Do you feel overwhelmed by the amount of debt looming over your head? Do you struggle to make ends meet? Are your debt payments sucking your bank account dry, leaving you in a vicious cycle of living paycheck to paycheck?
If so, you’re not alone. The average American is more than $90,000 in debt. Just as significantly, 54% of Americans live paycheck to paycheck.
Yet, there is a bright light at the end of the tunnel. There are countless debt payment strategies, and one of them will surely work for you.
We want to teach you a little more on the topic. Keep reading for three of the most effective debt payment plans.
- Implement a Self-Governed Debt Repayment Plan
One of the best ways to get out of debt is by following a debt payment plan on your own. This allows you to control every facet of your finances without owing anyone else money. However, self-governed debt repayment strategies require a lot of control and discipline.
Start by examining your monthly expenses to root out unnecessary costs. These typically include:
- Excessive grocery bills
- Dining out
- Buying commercial coffee
- Multiple TV and movie streaming apps
- Online shopping
- Unnecessary subscriptions and memberships
- Etc.
Eliminate these things from your life and use the money you have left over at the end of each month to pay off your smallest debt. Once that debt is paid off, attack the next smallest debt.
As each debt is paid off, your debt payment “snowball” grows larger. Each month, you can put more and more money into your debt payment plan.
- Work With a Debt Settlement Company
If you feel like you can’t tackle your debt on your own, you can work with a debt settlement company. They will work with you and your creditors to set up an individual voluntary arrangement (IVA).
In essence, you will come to terms with a lower settlement amount. The debt settlement company will be the go-between for you and your creditors. Then, you will come up with a reasonable payment plan that you can afford.
If you’re interested in this option, check out https://www.ivaadviceonline.com/.
- File Bankruptcy
Lastly, if you can’t pay off debts without taking drastic measures, you can choose to file bankruptcy. There are two types of bankruptcy you can file to get out of debt.
Chapter 7 Bankruptcy can help you pay off some or all of your unsecured debt. If you pass the means test showing that you don’t make enough money to handle your debt on your own, a certain amount of debt will be eliminated. However, you may have to forfeit valuable assets, like your home or car.
You can file Chapter 13 Bankruptcy if you make too much money to qualify for Chapter 7 Bankruptcy. In this debt payment plan, you don’t have to give up any assets. You create a three to a five-year payment plan and any debt left at the end of this term is eliminated.
Looking for a Debt Payment Plan That Will Work for You?
As you can see, there are multiple ways to pay off your debt. Some are more practical while others require drastic steps. Which debt payment plan seems most appropriate for your situation?
For more financial advice or lifestyle guidance, take a look through the rest of our blog. Our website is full of articles designed to answer your questions and provide solutions to your problems.
