It’s not a secret that debt can leave you feeling trapped. When you owe money, it may seem like there’s simply no option but to pay every penny and every charge and drop of interest that’s been laid out by your agreement with your creditor. While you can never quite get away from mismanaged credit too easily, there are ways to negotiate your existing debt to make it all the easier to handle. Which options are available to you depend on your circumstances, so let’s take a look at three of the most effective and popular.
Let your creditors know ASAP
Most creditors do not want to have to rely on collections agencies to come after you and, if that happens, it’s a last resort and means that your opportunity to negotiate may be beyond you. You can afford yourself more wiggle room in many cases if you are able to reach out to your creditors earlier.
It’s not impossible to negotiate with creditors to earn yourself a more lenient repayment plan and, in some cases, you may as lucky as to freeze your interest rate. This still has to be complemented with a structured method of raising the cash to become debt-free, of course.
Pay it all and pay less
Just as many creditors are willing to give you more time to pay what you need to, some are just as open to letting you pay off less if you’re able to pay it all at once without making them have to wait for it. This is known as a settlement.
Debt settlement lawyers can be highly effective partners in this situation, negotiating the specifics of payment with your creditors. This option is best for those who may not have the long-term ability to pay off a debt entirely, but do have a significant pool of cash they can use to pay now, as it is a short-term method that often involves paying the agreed amount, lower than the total debt, within a month or sometimes less.
Arrange a new deal
If you’re in a situation where you have growing debt from multiple creditors, then the rate at which the size of that debt can grow out of control can be very surprising. Dealing with rising interest rates and fees from several sources can quickly lead to stress.
In order to stop those rising costs and make it all much more convenient to deal with, debt consolidation may be a solution worth considering. This involves using a creditor who is willing to take on the debt from others and can help you manage the interest rate level and reduce the complications of paying it off. However, debt consolidation should be avoided in cases where you have a fixed, competitive interest rate, such as what is available from many credit cards.
The best approach to handle debt is to take it head-on. Look at how much you owe, how feasibly you can pay it off, and whether options like renegotiating the payment plan or a settlement are available. The longer you ignore or avoid dealing with it, the harder debt can be to get out of.