There are ways in which a debtor can legally eliminate his debts but each method has its own pros and cons. Most of the Americans live paycheck by paycheck hence do not have much in the form of savings. Credit card debts can go out of hand easily and a debtor finds it difficult to maintain his monthly payments. Here we will try to discuss a few methods by which one can legally reduce his debts.
A person fighting his debts needs save as much as possible and put in all efforts to generate more income. Taking each step one at a time, let’s start with the savings. You can cut out on anything that is outside your essential requirements. Like you can start taking your lunch from home and save the money you would otherwise be paying in the cafeteria. Similarly you can cancel your subscription to the gym you never go to. Other areas where you can cut down your expense are transportation and entertainment.
Now we can start looking at areas where you can generate extra income. You can take up a part time job. Another way of raising money is by selling stuff that you no longer use on the internet. Exploit your talent like painting or sculpture and get some money for it. Put all your income towards paying off your debts.
Contact your creditors and try to negotiate a payment plan with them. If you can convince them of your problem your monthly payments can come down by as much as 20% of the amount that you were paying earlier.
If you have been a good customer you can try to get a reduction in the interest rates. This will again help you cut down your balance. Creditors usually agree to 2 % reduction in interest rates.
Debt settlement is a legitimate alternative to filing bankruptcy. If consumers are experiencing a financial hardship and have at least $10k in unsecured debt then debt settlement can be a legitimate way to eliminate up to 70% of that balance.
Check out the following link to get a free consultation from a debt relief specialist in your area: