How to get out of debt when you are broke ?

Yes, you can take care of those big debt figures, even if you are not having the means to address those amounts.

That’s what we are talking out here at this time. Join in. This conversation has all it takes to make you debt free, faster than you can imagine.

With the right initiatives and the right moves, you can pretty much deal with those debts, even if your money funding is not satisfactory.

Let’s clear out the whole possibility of clearing your debts, even when you are broke, in short, crisp, and meaningful paragraphs!

Try to consolidate your debts:

This is the finest method to eradicate your unsecured debt amounts. And, this is also your only way out, if you want to maintain a decent credit score, even while easing out your debt pay off structure.

Debt consolidation is bringing all your debts to one account, and then paying off only this account at an average interest rate, with considerably lowered monthly payments.

But, you can only consolidate debts that are falling under the category of unsecured debts, or consumer debts, that have no collateral or asset attached.
Hence, those payday loans, credit cards, and personal loans can be easily taken care of using debt consolidation.

Just an example to help you make use of debt consolidation.
If you have single to multiple high interest credit card debt, then you can take out a personal loan at a much lower interest rate, of an amount equal to your total credit card debt.
With this amount, that you took out on loan, you can pay off all the existing credit card balances. Then you can easily start to make monthly installments solely for the personal loan.

Another good example of credit card consolidation, is credit card balance transfer. Here, instead of taking out a personal loan, you use another new credit card to shift all your credit card debt into it, and thereby freeing your previous credit cards.

If you can keep going consistently with the monthly payments, after you do consolidation, you can very well expect to see a big rise in your credit score. That’s because, with consolidation you are paying off your debts outright!

Try to settle your debts:

Next debt pay off option, when you are broke, is to settle your debt.

You can’t make full payments, so you negotiate for your debts, with the creditors and lenders.

You can do the negotiation on your own, or approach a debt settlement company, and let debt experts handle the case.

You can even consult lawyers while doing debt settlement, as there will be quite a few legal proceedings involved. It is always advised that you work with professionals for debt settlement, otherwise the results might not be quite positive and fruitful, as banks are really smart people!

Get help from friends and family members:

This is a good resort to pay off debts, as you can avail a low interest or no cost EMI, from someone, who is friend or family.

If a person, you know, is willing to pay for your debts, and is okay with the fact of you paying back the amount with easy monthly installments, at a nil to low interest rate, then it is the best unofficial option you have for debt riddance.

But, that doesn’t mean you should pressurize someone in your family, or peer group. Take a note of that.

You may liquidate your Equity:

Be careful if you aim to compromise your equity for paying off debts.

Once you eradicate debts with equity, you are unknowingly transferring the whole debt into a secured debt status.

And mostly, by equity we mean home equity.

So, work out everything, starting from the rates of a HELOC (Home Equity Line Of Credit), or a Home Equity Loan, compare your profit margin, in terms of interest rates, and then make the decision.

You definitely don’t want to end up sacrificing your own house, just for the sake of some consumer debts.

Your home is your biggest asset! Take all steps, concerning liquidation of equity, with proper planning.

Switch to another source of income:

Living broke forever, can never be your lifetime goal.

You should be continuously searching for multiple sources of income, that fit well in your daily routine, simultaneously.

Plus, if you fall under the senior citizen section, and don’t have enough retirement savings to sustain a happy life, or pay off your debts, then finding a supplemental income takes up a significant portion of the financial considerations to make as you age!

Don’t incur more debt, for good:

Now, all these hard works, will get flushed down the drain, if you don’t stop picking up more new debts.

Shut down those credit cards, and don’t fall for other loan instruments, until and unless you plan to consolidate.

It might be a bit tough at the start, but stop any kind of splurging, and focus on building your savings, along with the debt clearance.

If you are focused completely, then following any one of the above listed methods, should help you to pay off debts, in no time.

Cheers!

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