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Debt can be a serious spiral, and once it begins it often difficult to put a full stop to that spiral, however there are some strategies a consumer can follow to alleviate the stresses of debt.
- A debt settlement program can help lower payments. By contacting a qualified debt counselor, a consumer can have them negotiate with creditors on their behalf to provide some relief. This will involve applying for debt review and agreeing on a suitable monthly repayment plan.
- Often times temporary debt relief can be achieved by selling off unnecessary assets. Although it may feel like treading backwards, in the long run it can prevent serious indebtedness and bankruptcy.
- Pay close attention to mortgage payments, restructure them in order to pay off interest and chip away at the capital. A home mortgage may also be used to secure a home equity loan, to settle smaller debts. This is a prime example of debt consolidation, the process whereby all debts are consolidated into one account.
- Secure a loan using a car or similar assets as security, and use the consolidation loan to pay off other debts.
- Lastly an unsecured loan is an alternative to settle debts. The repayment is generally shorter, although the payments may be higher due to the lack of collateral.
The best strategy for debt relief is to prevent debt, however getting out of debt is entirely possible. Always consult a trained professional such a debt counselor for help relieving debt.
Article written by: Andrea van Tonder 02-2013