There are many of us who are going through debt problems. The debt issues come into our lives once we are out of college. The student loans, the credit card debts, etc. stare blankly at us. I too had to go through this phase in my life. When I was facing the debt problems, I would often think that there is no light at the end of this tunnel. At midnight, I would get up sweating and suffocating badly due to the debt nightmare!
How did I get into the debt mess?
I faced the debt problems mainly because of the following factors:
1) Using credit cards to eat out at costly restaurants.
2) I already had 2 credit cards and couldn’t handle the debt. I foolishly took out a third card to consolidate my balances. But it only took a part of my balance and I ended up with one more card.
3) I took out a car loan and unwisely put the down payment of my new car on a credit card. This resulted in six years of monthly payments.
4) I left my salaried job within few years and opted for temporary jobs.
How did I sort out my debt problems?
One day, with just $600 in my pocket, I sat down to take a look at my life to know what went wrong. During that time, my creditors had already slapped me with 27% APR and was unable to make minimum payments even! I was desperate to sort out everything. So, I took up two jobs with 70-80 hours a week to try and pay off the debts. Yes, that was challenging!
I was tired of creditors. So, I decided to research ways to get out of debt. During this time, one of my friends referred me to a non-profit credit counseling service. They helped me to get my credit card debts under control. Due to them, the creditors lowered my APR rates and I got a 4 year plan to pay off the debts. Since then, I religiously made payments and at the end of 4 years got out of the debt. Now I don’t owe any credit card debt and pay off my bills on time.
As far as I my car loan was concerned, it was a secured debt. After a lot of research, I got in touch with my car lender and pleaded my case. I was surprised and thankful that they understood my case and I somehow managed to get a better payment plan. By this year end, I will be able to pay off my car!
What debt advice can I offer you?
Debt can be scary and terrifying. So, you should always consider these few things:
- Pay all your bills on time to avoid debt. As the saying goes – prevention is better than cure!
- Credit cards can be messy. So use them with care. Do not overuse them so that you incur debts which can’t pay off.
- Carry cash rather than credit cards. This will help you spend less.
- If you’re going through a financial crisis, don’t be afraid to communicate with your creditors.
- Research and educate yourself about how you can handle debt problems.
- Negotiate with your creditors so that they understand your problem and offer you some help.
So, don’t ignore your debts! Take the required steps and get rid of it.