Being in debt is an incredibly distressing thing to go through which can make life incredibly difficult and place you under huge emotional strain. Of course it's not ideal for your finances either and you're likely to find that once you're in debt you tend to spiral further and further into financial difficulty as things like late payment fees, interest and other problems all increase the amount you end up paying.
As such it is highly important that you reduce your debt as much as possible as quickly as possible, but how do you do this when you don't have the money to just pay it off? Well fortunately there are other things you can do to manage the debt that won't cost you anything and that can help you to at least start getting back into the green. Here we will look at what some of those things are.
Debt restructuring basically means that you are going to take your debt and change the way that you have to pay it back and the amount. You do this by calling the lenders and basically informing them that you can't keep up with the payments and asking them to freeze the interest, give you a bit longer, or otherwise help you out. It might sound too good to be true, but actually this will often work and the simple reason for this is that they want you to be able to pay it back and they don't want you to end up bankrupt. As such they may just prove to be more helpful and accommodating than you would perhaps expect.
Debt consolidation basically means taking one big loan out and then using this money in order to pay off your other loans. There are several benefits to this – as it can make your debt easier to manage and ensure there's only one payment you need to keep track of, and as in some cases it will reduce the total amount of interest you are paying. Be very careful about this though, as in some cases you will find that you end up paying more and getting yourself into more trouble. Seek advice from an expert if you are unsure.
If your debt is on a credit card, then you will often find that you are able to simply 'move' that debt to another card. This way the new credit card company will pay off your debt for you, but you will then owe them that money instead. Why is this useful? Well because in some cases the interest on that new card will be lower meaning you're paying less back in total – everyone wins. At the same time if you take out a new credit card it will sometimes have an offer on it meaning you have no interest for the first six months or even the first year. There's nothing to prevent you moving your debt from card to card this way to void ever paying any interest on what you owe.
Declaring bankruptcy is not the terrible thing it has been made out to be, and if you are sensible you can use this as a way to cancel and restructure much of your debt, and can then repair your credit rating following this.