Debt relief – is it really achievable?

Debt relief

For people carrying a number of debts, debt relief is always something they look forward to. Getting to a point of a full debt relief is, of course, very hard and not that many people with debt can say that this is a goal they have reached. Debt relief is a hard goal to reach for a number of reasons. In order to get yourself into debt, you already need to have problems with managing your finances. Then, with having a debt to repay, things do not get any easier, it is exactly the opposite. If you had a hard time managing your finances while you were debt free, you will find it to be even harder to manage to pay your regular bills while you also need to repay your debt. That is why, a debt relief is something that even though most people in debt want, not all of them are able to reach. Of course, as with most things in life, the more information you have about a certain subject, the better your chances are of finding a way to make things work. And so, before we dive in any deeper, let’s first explain what debt relief is.

Explanation of debt relief

Explanation of debt relief
Explanation of debt relief

Debt relief is the reorganization of your debts in any form or shape so that you can be provided with a certain level of relief, partially or full, from the burden of carrying debt. Debt relief has many forms, including: a debt relief can be the reduction of your overall debt amount; a decrease in the interest rates on your loans; it can also be an extension of your loan term; the list goes on. While debt relief can be considered by creditors only in specific circumstances, that does not mean that a person cannot pursue this goal on his own. So in the article below, we are going to discuss the action that you can take to give yourself debt relief, regain your financial control and to finally be able to live a life of financial freedom.

Steps to take towards debt relief

 

  • Set a goal

 

Set a goal
Set a goal

You cannot reach a goal in life without setting it first. You need to know what you want. You need to have a clear vision of what you wish to achieve in order to be able to turn that vision into reality. Same is with debt relief. If you want to get rid of all your debts, want to have a normal life, without having to worry about loan payments at the end of each month, you need to make that wish a goal. If you know what your end goal is, all that is left to do is to find a way to reach it. Imagine reaching a goal without even knowing what it is. Sounds a bit like asking a blind man for directions. Be honest with yourself, know your limitations, set a goal that is within your capabilities.

 

  • Make a true commitment to your cause

 

Make a true commitment
Make a true commitment

Once you have set up your goal and have a clear vision of what it is that you want to achieve, the next step is to fully commit to reaching that goal. You need to understand that reaching a state of debt freedom is going to a hard and most likely a very long process. In order for it all to work out, you would need to stay strong and fully committed from the beginning of this debt relief journey to its very end. Keep in mind that if debt relief was something easy that you could reach in a matter of days or weeks, every person with debt would be debt-free in no time. Understanding the difficulty of the process will allow you to have a more realistic point of view and will keep you strong throughout your battle with debt.

 

  • Understand your mistakes and change your ways

 

Understand your mistakes and change your ways
Understand your mistakes and change your ways

If you are carrying a single debt or a number of debts, there are most likely very good reasons for that. Realize your mistakes and acknowledge what got you here in the first place. People do not go into debt because it is fun. They do it because they normally do not have any other choice. To be in a situation where getting a loan is your only option for dealing with your bills, you must be doing something wrong. Ask yourself the following questions:

 

  • Are you constantly buying stuff that you do not actually need?

 

  • Do you have a habit of eating out at restaurants instead of cooking at home?

 

  • Are you comparing yourself to people who have better income, trying to be like them, and therefore getting things that you cannot really afford?

 

  • Do you plan your budget ahead of time and calculate your future income and expenses?

You see, even though we live in a very unstable economic environment, in most cases there are things that you can do to prevent that from happening. If you do not start to manage your finances in a better way, nobody is going to do that for you. Stop wasting money on things you do not need. Stop going out to fancy restaurants and start eating at home. Stop comparing yourself to people with salaries that are way above yours. Start planning your budget. By eliminating all unnecessary expenses and calculating your budget, you will be able not only to better manage your debt repayments, but also prevent going into debt again. After all, that is the whole point of debt relief – to never go into debt again.

 

  • Organize your debts

 

Organize your debts
Organize your debts

Once you have completed the previous steps, it is time to focus on your debts. There are certain ways that debt repayment can be structured. In case you are dealing with multiple debts, repaying them in a chaotic way will not get you the best of results. It is better to make a decision on a debt repayment method and stick to it. There are two main ways for organizing debt repayment:

  • You can start repaying your debts by starting with the debt with the smallest amount. By focusing on your smallest debt amount, you will be able to quickly repay that debt and that way, you will have one less debt bill to think about. After you have fully repaid your smallest debt, do the same thing over and over again until there are no more debts left. This method can really give you confidence along the way, as you will be seeing actual results. You will be seeing the number of your debts getting smaller and smaller.
  • Or you can start repaying your debts from the debt with the highest interest rate. While repaying that debt will be hard, it is going to make the repayment of each debt that follows a bit easier. By repaying your highest interest rate debt first, you would also be able to save money on interest in the long run.

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