Can’t Pay Off Your Debts? Here Are Your Options
No matter how bad your debts get whether it’s your business or personal life, there’s always a way out. If you’ve reached a point at which you can no longer continue paying off your debts because they’re too high, why not consider some of these options?
Refinance your debts
There may be a way of refinancing your debts to make them more affordable. This could allow you to lower your interest rates or pay off your debts over a longer period. Consolidation loans are a popular way of paying off multiple debts at once – these loans could come with lower interest rates, whilst making it easier to keep track of your debts by consolidating them into one monthly payment. Having a low credit score can sometimes be a problem when refinancing, so bear this in mind.
Negotiate with your creditors
You may be able to talk with the people you owe money to and negotiate a better repayment plan. This could include paying less interest or paying smaller amounts over a longer period. Most creditors will be sympathetic and will be willing to offer a better deal – many would rather get smaller amounts of money back than none at all. There are also people you can hire to negotiate for you.
File for bankruptcy
If you’ve tried refinancing and negotiating, going bankrupt could be another option. This can allow you to wipe out most or all of your debts, allowing you start fresh. Bankruptcy does have its downsides such as reducing your credit score practically to 500, however, over time you will be able to build this back up (plus the inability to take out extra loans could stop you getting back in the same situation). There are professional services that you can hire to help with bankruptcy filing. Be wary that some debts such as student loans and taxes cannot be eliminated by bankruptcy.
Get help from family and friends
A lot of people get deep into debt because they refuse to ask others for financial help. However, family and friends may be the best option for digging you out of debt – you can then owe money to them and not have to worry about interest rates or high repayments. The biggest problem with asking family and friends to step in is the damage that it can have on personal relationships if you then refuse to pay them back. Only borrow money from people closest to you if you can guarantee that you’ll pay it back.