This sudden pandemic has put many Americans in financial hardship and money problems. You may have found yourself drowning in debt with your medical bills, student loan debt, mortgage, credit card debt, and car loan debt. 

Dealing with debt takes proper budgeting, discipline, time, and the right know-how. In this article, we’ll discuss some easy tips you can follow to give yourself financial freedom from all types of debt. For more debt help, consult a Phoenix bankruptcy lawyer to discuss your options in getting out of debt. 

8 Ways to Ease your Debt Problems

1. Increase Your Income

This is the most obvious way to pay off debt. The more you pay towards your debt, the faster you can pay it off. In our increasingly digitized world, there are plenty of ways for you to earn income on the side to dedicate to your debt. Become an influencer, sell your preloved clothes online, earn income from playing games. 

2. Debt Snowball Method

High-interest rates can make it hard to pay off your debt. If your monthly payment is too small, the interest can increase the time you are in debt. 

The debt snowball method is one way to make your debt more manageable. Through this strategy, you pay as much as you can towards the smallest debt owed while you make only the minimum monthly payments towards the others. Once you’ve paid off the smallest balance, move on to the next. Over time, you’ll notice the progress you’re making, and eventually, you’ll be free of your debt. 

3. Debt Avalanche Method

Debt Relief and Financial SecurityIf you’re having trouble with debt repayment, look into debt avalanche as an alternative debt solution. With this method, you make the most payments towards the debt with the highest interest rate. After this has been paid off, move on to the next until you’re finally rid of all your debt.

4. Look into Credit Counseling

Credit counseling agencies can guide you on navigating your way to financial freedom. Credit counselors can negotiate with your creditors for you and get you an inexpensive debt management plan. You’ll be sending lump sum payments monthly to the credit counseling agency, which then gives it out to your creditors.

There are many ways to find a credit counselor. You can look through the Financial Counseling Association of America or the National Foundation for Credit Counseling. Both deliver credit counseling services through local member agencies.

5. Debt Settlement

Settlement may be a debt solution if you owe a lot more than you can repay in a few years or if you have past due accounts. Debt settlement means you ask your creditors if you can pay a lump-sum payment to satisfy your debts. This sum is usually lower than your full balance. 

Take note that this settlement will pull down your credit score. Before going to a debt settlement company, talk to our reputable Phoenix bankruptcy attorneys to find debt solutions with you.

6. Debt Consolidation

Debt consolidation is another way to pay back your debtors and become debt-free. Consolidating your debt means you combine multiple debts into one larger debt. You can look into debt consolidation companies that offer more favorable terms for you, such as a lower monthly payment or lower interest rates. 

7. Emergency Fund

It may seem counterintuitive to put money somewhere when you need to get out of debt. What these savings do is give you some protection for emergencies. Instead of resorting to your credit cards, you have a pool of money you can use for unexpected expenses. 

Ideally, your emergency fund has enough money for 6-12 months of expenses. However, any savings is better than having none at all. Put in any amount of money you can. 

8. File for Bankruptcy

Bankruptcy protection is one of the surest ways to gain debt forgiveness. Many try to avoid bankruptcy because of the negative stigma surrounding one. But bankruptcy provides both short-term relief and long-term debt-free life. Upon filing, the court orders an automatic stay. This means that no debt collector, collection agency, or lawyer can sue you for your debt or make any other collective effort. After bankruptcy, you can discharge your debt, making it so you don’t have to pay them off anymore!

The Bottom Line

Everyone’s situation is different. All these solutions – debt consolidation loan, debt management plans, debt negotiation, and settlement – can help, but it must be so confusing deciding which option is best for you! If you’re overwhelmed and struggling with debt, get in touch with Phoenix Fresh Start Bankruptcy attorneys! We are a debt relief agency helping people get out of debt, including, where appropriate, filing petitions for relief in Arizona bankruptcy courts.

Call our office today to get in touch with a skilled Phoenix bankruptcy attorney and discuss the best option for you!