As the new loan is repayable over a long period of
time (often 25 - 35 years) the monthly repayments
are significantly lower than with short term debt
and should be far more manageable
3. refinance your
debts using a debt
consolidation loan
Debt consolidation is where you take a new
unsecured loan and use the funds to pay off your
outstanding debts. Debt consolidation loans
are repayable over a longer term at a relatively
low interest rate and as a result the monthly
repayments are lower. If the loan is secured
on your property then the interest rate and
payments may be even lower.
4. downsize
One of the easiest ways to get out of debt is to
sell your house or apartment and downsize or
move into rented accommodation. The surplus
cash can then be used to pay your debts and you
can continue with your life without the pressure.
Selling up and moving home is, however, a
difficult and often painful option. If you do sell
however. you can determine the price and remain
in control. If the house falls into bankruptcy,
you lose control and the house may be sold
by your mortgagor at auction for a price often
considerably less than the price you can obtain
in a normal sale.
5. a formal arrangement
with your creditors
A formal arrangement with your creditors
can often be negotiated by specialist debt
management companies and is filed with the
courts. These arrangements are for 5 years.
You pay an agreed amount each week or month
to the debt management company and it is
then divided between your creditors. While
you continue to pay they are prevented from
approaching you.
After the 5-year period is over any balance
still owing is wiped out and you are free to
live your life free of debt. If however you
break the arrangement the normal result
is bankruptcy.
As you can see, there are several sound
bankruptcy alternatives for you to choose from.
Everybody is under financial pressure from time
to time, however you should not compound your
problems by declaring bankruptcy too soon.
Instead, choose the bankruptcy alternative that
sounds the best for your particular situation and
start working to repair your credit now.
Using a bankruptcy alternative means that in a
few years you will have rebuilt your credit and
will be back on track, whereas with bankruptcy
it could be ten years before you can get back to
normal.
Article by John Edmond
WomanToWomanMagazine.com 45
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