A Brief Guide to Restructure Debt

Hundreds of thousands of people are affected from debt problems in the United States of America. When debts seem to be much higher than what you can afford to pay on a monthly basis, you may like to avail services from debt consolidation companies who will restructure debt for you in a way that will make the repayment affordable and easy for you. Debt restructuring programs will enhance your knowledge about money management and help you manage your finances while reducing the monthly load of debts. They will provide you an opportunity to get your finances back on track and start a smooth financial life again.

Your Current Financial Situation
Before you start developing your strategies to restructure debt, it is very important for you to get a true picture of your current financial situation. Write down all your outstanding debts on a paper, including the rate of interest on each debt, monthly repayments, and the total amount you owe. Now, make a list of your income and expenses to find out how much monthly payment you can afford to make against each debts – based on the priority of debts.

Renegotiate
Now, the first option for you is to contact your lenders and try renegotiating the terms and conditions. Here, it is important for you to understand that when you restructure debt, you don’t reduce your debts – you simply restructure it so that you could make the payments easily. So, renegotiation is very much likely to offer you a lower monthly payment at probably a lower rate of interest but for a much longer period of time.

Try Obtaining A Credit Union Loan
If renegotiating the debts still doesn’t solve the problem, you may consider obtaining a credit union loan. Credit unions always charge much lower interest rates than other commercial lenders. You can use the borrowed money to make debt payments on renegotiated terms.

Use Your Insurance Policy
If you have a life insurance policy, you can borrow loan against the same. So, if even credit union loan does not prove to be sufficient enough to restructure debt, you may consider borrowing against your insurance policy. It is safe because even if you don’t repay this loan, the only consequence is that your beneficiaries will be getting much smaller payout at the maturity of the policy.

Credit Card Balance Transfer
If credit card debts make a large portion of your overall debts, you may also consider transferring the balance to a low rate credit card. You can use the balance 債務舒緩計劃 transfer deals offered by various credit card companies to consolidate and restructure debt. However, this idea is going to work only if you are determined to make as high a payment every month as you can – don’t just make the minimum due.

Home Equity Loan
What is more, if you are fortunate enough to own a home, you can also borrow against its equity. You can then use the money thus received to make the monthly payments.

Remember, a longer repayment period may sound to be an attractive option to restructure debt, but it will also charge a much higher amount of interest. So, make your decisions wisely.

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