Do you have more debt than you'd like? You're not alone. In fact, according to a recent report, the average American debt among consumers sits at just under $100,000.
Owing money can be overwhelming, especially if you feel like you will never be able to pay it all off. The good news is that there are plenty of avenues of support out there that can help you settle your debt once and for all. If you're looking for some extra help to pay off your debts, you've come to the right place. Read on for our top tips.
Understand your debtsBefore looking for support, it’s important to fully understand exactly what you owe. Make a list of all of your debts, including the creditor, the interest rate, and the minimum monthly payment. This will help you see the full picture of your debt so that you can make a plan to pay it off.
Once you know what you're up against, it's time to make a budget. Begin by calculating your monthly income and expenses. Then, see where you can cut back on your spending so that you can put more money towards paying off your debts. Make sure to leave some wiggle room in your budget for incidentals.
After doing this, you may realize that you need some additional support. If this is the case, there are lots of different places where you can get help, and it can be reassuring to know that you have options in terms of where to go.
Debt management plans The first option to explore is making a debt management plan, which is a financial agreement between a debtor and a creditor that the debtor will pay back the money owed over time. The plan is typically set up by a third party, such as a credit counseling agency, and is managed by the agency on behalf of the debtor. Creditors may agree to lower interest rates, waive late fees, or extend the terms of the debt in order to make the payments more affordable.
In exchange, the debtor agrees to make regular payments to the agency, which then disburses funds to creditors according to the terms of the plan. Debt management plans can help reduce monthly payments, reduce interest charges, and get creditors off your back – but they can also have a negative impact on your credit score. If you're considering a debt management plan, it's important to weigh all your options and understand the potential risks before making any decisions.
Government supportThere are multiple government agencies and programs that offer assistance with debt repayment, too.