Properly managing your debt level is one of the keys to financial success. Whether you are a multi-million dollar professional or a blue-collar worker, successful debt management is your path to financial freedom. If you are struggling to maintain or reduce your debt, you can get your monthly debt payments back to a manageable level with these steps. Your credit card issuer may offer a hardship plan that will lower your monthly payments or interest rate for a period of time. If the customer service rep says no, don’t fight or argue; simply ask to speak to a supervisor and make your request again. Be sure to get any agreement in writing, preferably on company letterhead, before making your next payment. If you qualify for the loan, you can use it to pay off your existing debts, then focus on making a single monthly payment on the loan. Debt consolidation loans aren’t the only option for consolidating debt. Consider also a personal loan, home equity loan, or cash-out refinance. Be careful about getting a loan that simply lowers your payments by extending the repayment period. You’ll likely end up paying more interest over time than you would otherwise. Also, think hard about putting your home up for collateral on a loan. If you can’t make your payments, you could lose your house. If you’re considering a personal loan, use this calculator to estimate whether your monthly payments will be lower than what you pay now. You can use a balance transfer calculator to figure out how much you’ll save by transferring your balances. Please keep in mind that employing this strategy typically incurs a transfer fee. If this is the case, the fee may decrease the amount of interest savings that you were anticipating. When you’re choosing a credit counselor, make sure you choose a reputable one (hint: they’re usually nonprofit). Be careful not to confuse them with debt settlement companies that offer to lower your debt, but often make your credit score worse during the negotiating stage. Chapter 7 bankruptcy will allow you to completely wipe out certain debts while Chapter 13 bankruptcy will create a payment plan.
