Financial Freedom

4 Personal Debt Solutions: Which One Will Suit You?

This post may contain affiliate links and/or it may have been a partnership. Please view our policy page for more details.

The feeling of being in debt is a punishing one. Debt may be somewhat normalized in modern society, but there’s no doubt that living alongside debt can have a serious impact on your mental and emotional health. In fact, as TheSimpleDollar.com points out, the emotional impact of debt can be far more substantial than many of us imagine.

If you are experiencing debt problems, then tackling the main issue and the underlying emotional problems it can cause is imperative. Below is a brief look at the four most common methods you can use to cope with debt, as well as which circumstances each is most suitable for.

4 Personal Debt Solutions: Which One Will Suit You?

Bankruptcy

Works if…

  • You cannot increase your income to help repay debts faster
  • You have higher outgoings than you can pay
  • You cannot move your debt to lower interest rates

If the above applies, then bankruptcy genuinely might be the best route for you; at the very least, it’s worth talking to a financial advisor to discuss the possibility.

Debt Consolidation Loans

Works if…

  • You are 100% sure you will be able to budget effectively for future
  • You intend to close your credit cards so you cannot run balances up again
  • You have a high enough income to pay the loan amount every month

Debt consolidation with the likes of DebtConsolidationLoans.comcan help lower your interest rates and simplify your payment schedule, helping you to get out of debt quicker.

Credit Card Balance Transfers

  • You have lower amounts of debt that are primarily held on credit cards
  • You have a good credit score and can obtain 0% balance transfer deals on a new card
  • You intend to destroy the card you transfer a balance from, so it cannot be used in the future.

If you have the credit score, 0% balance transfer offers are a great way to ensure every penny you pay towards your debt actually reduces the owed amount (rather than being lost on interest).

Friends and Family

Works if…

  • You have friends or family who are able to loan you money
  • You cannot obtain a new balance transfer card or a consolidation loan
  • You do not want to pay high levels of interest

Loans from friends and family can act as a form of debt consolidation and, ideally, you will be charged little or no interest. The only possible complication is you will have to actually ask for such a loan, which some people find so awkward they avoid it at all costs.

Creditor Negotiation

Works if…

  • You have funds available to make repayments but want to pay less interest
  • You are confident enough to talk directly to your creditors and demand better deals
  • You have a record of being a good customer

If you usually make your payments on time, then it’s worth asking your creditors to lower your interest rate, offer you a better deal, or accept smaller payments for a few months so you can get back on track. They might say no, but there’s no harm in asking.

In conclusion

Examine the circumstances above and see which most closely match your own experience. Hopefully, by pursuing the debt management strategy that is most applicable to you, you’ll be able to see light at the end of the debt tunnel.

Leave a Reply

CommentLuv badge

This site uses Akismet to reduce spam. Learn how your comment data is processed.

A healthy lifestyle can benefit a child in many ways. These three key things will help ensure they have a healthy lifestyle. #healthylifestyle #parentingtips #lifestyle
How Can a Healthy Lifestyle Benefit Your Child?

Most parents tend to look for ways in which they can...

We all need to make a difference in our environments. Here are tips on how to be more eco-friendly at work.
How to Be More Eco-Friendly at Work

In a changing world, it’s important for all of us as...

Being a wife to a hard-working man has some challenges of its own. Do you feel this pain points too in your life?
Being A Wife To A Hard Working Man

My husband wakes up at 3:30 AM for work, while our...

Choosing a nursery is one of the biggest decisions you'll make for your kids. Here is some advice on helping you decide the right one. #parentingtips #parenting #parentingadvice
Advice for Parents Choosing a Nursery

When the time comes for you to start choosing a nursery...

By using these budget ideas for lazy people you'll get yourself on track to saving money and even earning more of it. #budgeting #savingmoney #budget #moneymanagement
Budget Ideas for Lazy People

A budget is a necessary evil, even for lazy people. If...

Use these seven tips to help you manage your money during the holidays. Which of these money management tips are you using? #moneymanagement #money #holidaybudget #savemoney #sharinglifesmoments
7 Tips To Help You Manage Your Money During the Holidays

Managing your budget during the holidays can be a challenge. More...

Knowing the principles of personal financial management will help you to have financial freedom faster. These simple tips will help you get started.
The Principles Of Personal Financial Management

Being able to manage one’s finances should be incredibly simple; but...

Student loan debt affects so many people in the US. Here are five tips for clearing student loan debts quickly.
5 Tips For Clearing Student Loan Debts Quickly

So many people leave college with a mountain of debt and...

Here are the key bathroom renovation ideas you'll want to do to increase your home's value. They aren't overly costly either.
8 Bathroom Renovation Ideas that Will Increase Your Home’s Value

If you wish to increase the market value of your home,...

Here is some helpful advice from the experts on how you can start protecting the foundations of your building.
Top Tips for Protecting the Foundations of Your Building

Over time, poor drainage, tree roots, and soil shrinkage can all...

Be sure to explore the various kinds of furniture out there. Here are some features in design a sectional sofa that you might want.
Design Features to Look for in a Sectional Sofa

When buying furniture, it’s always a good idea to know what...

Keep your house comfortable with these climate control tips. Which of these climate control tips are you using?
Stay Comfortable with These Climate Control Tips

When the weather is at its most extreme it can be...

Juggling everything can be a challenge. Read these tips to pull off working at home, parenting, and marriage.
Tips to Pull off Working at Home, Parenting, and Marriage

Working from home can be a liberating experience, especially if you...

Make sure that you check out these business books for entrepreneurs to help you gain the right business mindset and tools for success. #entrepreneurs #mindset #businesssuccess
Top Business Books for Entrepreneurs: Part 2

I’ve got a huge list of business books for entrepreneurs lined...

Transform your life with these top books for entrepreneurs this year. These books will help you have life-changing experiences.
Top Books for Entrepreneurs: Part 1

As an entrepreneur who has been working independently off and on...

Here are some tips on how to make money letting a property. These tips are going to help you make more money.
How to Make Money Letting a Property

Putting your savings into property is a great way to invest....

Enter to win the Christmas Jars amazing family friendly movie in this giveaway. #ChristmasJarsL3 #giveaway
Christmas Jars Movie And Giveaway

There some family-friendly movies that are well worth watching. Zeva and...

Prepare to be moved by another Kendrick Brothers' movie, OVERCOMER this weekend August 23, 2019. Get your movie tickets now! #overcomermovie #Flyby #ad
OVERCOMER Movie Thoughts

I’ve been a fan of the Kendrick Brothers Production movies since...

Get your family ready to watch the UGLYDOLLS family movie this weekend. Learn more about it here!
UGLYDOLLS Family Movie May Change Society

We live in a society where a person’s appearance is one...

DUMBO movie is coming to life. Learn more about this movie and a bit of information about myself here.
DUMBO New Edition Releases Soon

One of my favorite movies growing up was DUMBO. I was...

shares