Are you in over your head and have you been wondering what is the quickest way to get out of debt?
Let’s assume for starters that you are not thinking of dropping everything and taking on a new identity. Let’s say that you would like to keep your life and everything else that comes with it, you are just looking to get rid of debt as quickly as possible.
So we have eliminated leaving a pile of clothes on a beach somewhere, or clandestine one-way submarine trips to an undisclosed location in South America. Though I am sure we have all played with such fantasies at times.
You did say the quickest right? Well in some respects that is also likely to be the most painful or at least the most demanding.
Let’s say you have already followed the advice explained in this article on recommended debt relief programs.
If you have a debt relief program that has accepted to work with you. They will likely present you with options involving consolidating your debt into a single loan that the debt relief provider will then manage.
When you negotiate with your debt relief provider, you can opt for a plan that resolves your debt on the fastest practical track. With a debt relief provider that would normally be a minimum of 2 years.
How tough you want to make it on yourself will to some extent be up to you, within reason. A debt relief provider will likely prevent you from imposing measures of economy on yourself that they consider too harsh. You might think you can eat nothing but peanut butter sandwiches for a year but in reality, a debt relief provider is unlikely to let you try.
An expenditure plan is always going to be a necessary component of getting rid of your debt. Plan your expenditures. Make sure you have enough to cover the essential bills like rent, electricity, gas, insurance, and food.
If you are really serious about doing this quickly could you do without your phone, unless you need it for work? Then what about getting rid of your cable TV service? If you are able to get rid of both of those that could be a few hundred dollars a month saved.
If you are working with a debt relief provider and they have consolidated your debts into a single loan the chances are that giving up your credit cards will be part of the package. So you probably want to get used to that idea right away.
But if you can’t get or don’t want a debt relief program?
But let’s also imagine that you don’t qualify for assistance with any of these programs or you want to try and go it alone and save on the fees.
You will still have to go through many of the steps explained in the article on recommended debt relief programs.
You should start by contacting your creditors and explain you are putting a plan in place to pay off your debts. Many of the same debt relief providers that want to manage your debt for you, and charge you in the process are also in the market to provide you with a consolidation loan that you manage yourself.
Free for state residents
You will also find online debt relief advisory programs advertising no-cost counseling services for residents of specific US states. These will often provide very valuable information but in reality, they will be referring you to one or more of the major US loan consolidation services.
There is nothing necessarily not on the level with these services. Federal laws passed in 2010 make it illegal to charge you fees for debt consolidation services until after they have arranged a consolidation loan.
The only exception is an attorney’s legal fees if you are involved in any legal proceedings regarding fixing your debt situation.
So in effect, all the debt counseling you may get before you commit to a specific plan has to be provided free of up-front charges.
If any debt relief provider does try to charge you up-front don’t do it. Find another provider.
Each person’s situation is unique
Each person’s financial situation really is unique so there is no one-size-fits-all with getting out of debt.
If you are willing to do the work and you have the necessary discipline and self-control, there is no reason why you can’t fix your own raging credit card debt by imposing draconian measures on yourself and your expenditures.
If the debts really are out of hand but you still want to manage the situation yourself then many debt relief providers will get you a consolidation loan and you can negotiate with your creditors easier terms.
You can also opt for a more full-service style package where the debt relief provider does the negotiations with your creditors, arranges the consolidation loan, and manages it for you. If you go that route they will be taking their pound of flesh from your payments to them.
If there is a conclusion …
It’s going to be that if you want the quickest way out of debt, then chances are you are going to have to negotiate directly with your creditors, arrange a consolidation loan if you need one and if you are eligible with a provider and manage the whole process yourself.
This way you will save on at least some of the debt relief provider’s fees and all other things being equal, this will mean you pay off your debt faster.
Questions and answers
Q. How quickly can you get out of debt?
A. If you are doing it yourself, it is as fast as you can, that could be months or years depending on how much debt you have and how much you earn. It is simple math. There is no magic. If you take out a consolidation loan and work with a debt relief provider then it will usually take between two and four years to get out of debt after you have set up the loan.
Q. How do I get out of debt quickly for no money?
A. To get out of debt quickly for no money you should plan your expenditures and track every cent you spend, shred your credit cards, cut out anything that is not necessary but maybe keep one low-cost luxury that you absolutely love, increase your earnings if you are paid overtime volunteer for more overtime, take on extra part-time work, negotiate the best terms you can directly with your creditors, pay off your highest interest debts first, make extra payments over and above what is planned whenever you can. If you don’t take out a consolidation loan or any other service then you will avoid paying extra fees.
Q. How much debt is too much?
A. In today’s market mortgage lenders will consider giving you a mortgage if your total debt repayments to earnings ratio will be 36% or less including mortgage repayments. What that means in regular money terms is if for every $1,000 you earn you should be able to get a mortgage as long as your total debt repayments are $360 a month or less. As an example, if your total household income is $4,000 a month and you already have $200 a month in car loan payments and no other debt, then you would qualify for a mortgage that would require monthly repayments of $1,240.
That is the level that mortgage lenders would typically be comfortable with. Technically you could get a mortgage loan if your debt repayment to earnings ratio is 43%.
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Disclaimer: I am not a financial professional. All the information on this website and in this article is for information purposes only and should not be taken as investment advice, good or bad.
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