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Take These 7 Steps to Get Out of Debt

 May 4, 2021

By  BC Editorial Team

If you are looking for a legal debt solution, there is some good news for you – there are multiple ways to get out of debt! Here are the 7 most effective methods offered by debt relief experts from Debtstoppers. At least one of them will help you for sure.

1. Try to Lower Your Interest Rates

You are allowed to contact your creditors and negotiate your interest rate down. Creditors are not likely to refuse until your payment history is positive. In most cases, you will be surprised by the size of the reduction. It’s a great way to save some money on interest payments during the year.

2. Apply Tax Refund Checks

If your tax refund check looks like an opportunity to buy a new laptop or go on vacation, you should really consider it as an opportunity to pay down a part of your debt or even to close it once and for all. The relief you get by making “lump-sum” payoffs is worth a skipped vacation.

3. Utilize a Statute of Limitations Law

If you have a very old credit card debt, you should check whether you are still obliged to pay it off. All the states have their own laws for outstanding debts, and some of them prohibit debt collectors from requesting particular types of debt payments after a set period of time. In some cases, creditors are prohibited from suing you for not paying old debts. Contact your state Attorney General for details to know if the law works for you.

4. Opt for Credit Card Balance Transfer

This operation can help you transfer a high-rate deal to a 0% deal, which means total elimination of credit card interest. Make sure the available transfers really offer low rates and use your opportunity.

5. Cash in Life Insurance

If the debt is too overwhelming and you don’t have insurance policy beneficiaries, you have full rights to pay your debt off with your life insurance funds. This trick works only with those whole-life policies that already have cash value. Make sure to leave a certain amount on balance to cover the needs of your beneficiaries.

6. Reduce Repayment Percentage

A good step towards debt reduction is to spend around 15% of your salary, Social Security income, pension, or any other income to bump up your credit card or loan debt repayment percentage. Making a one-time large payoff, you can cut off the interest percentage for quite a long time and save up a significant amount of money on further repayments.

7. File for Bankruptcy

Filing Chapter 7 or Chapter 14 for bankruptcy, you can achieve the right to discharge a part or the entire amount of debt. However, this measure works only in those extreme cases when you lose your job, divorce, or get a severe injury.

Time to Focus

Repaying debts can be a nerve-taking deal, but you should take a deep breath and concentrate on the opportunities. In most cases, debt foreclosure is much more real than your nervous system makes you think!

BC Editorial Team


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