Five Emergency Debt Relief Options
If no matter how hard you try to save money and pay off your debt you seem to get deeper and deeper in it, it is time to consider emergency debt relief options.
1. Consider a debt consolidation loan.
A debt consolidation loan brings together all creditor accounts into a single, long-term loan to be paid out over 30 years, so in other words you are taking a loan to pay all of your creditors at once. There are different types of debt consolidation loans (such as fixed loans, adjustable loans or unsecured loans) and it is a good idea to discuss them with your financial advisor or a credit counselor, so they can help you choose the one which will work the best for you.
2. Do a “cash-out” refinancing.
A so-called cash-our refinancing is a loan in which the borrower takes additional cash above the amount of the existing liens. This only works for people with home equity and it allows to refinance your property for greater than the amount you owe, so you can use the extra cash to pay off debt.
3. Refinance your vehicle.
Many people don’t know that you can refinance your car just like you can refinance your home. Go to your local bank and check whether or not you can refinance your car.
4. Try debt counseling.
Many people who are deeply in debt and can’t get out of it by themselves are often resistant to admit that they are in serious trouble and need professional help. It is better to overcome pride and fears and find a counselor before it is too late.
Debt counselors are going to act on your behalf and not only help you set up a plan to pay off your debt, but do things which you probably hate doing, such as negotiating your interest rates with your creditors.
Remember that you have to be extremely careful when looking for professional help. There are many scam artists pretending to be debt counselors. Don’t go for the first thing you find online. Check the BBB, ask for recommendations, read reviews online and use common sense.
5. If nothing else works, file for bankruptcy.
Bankruptcy is not a very good debt relief option, because it will have a dramatic negative impact on your credit score and will make your future life much more complicated. Therefore, it should only be used as your last resort.
If you decide that you do have to file for bankruptcy, remember that it is possible to do it yourself. You can find do-it-yourself kits available at bookstores or libraries and save hundreds or even thousands of dollars on legal fees.