Has your debt piled up to an overwhelming amount?
Often people may pile on more debt than they can manage, and it can become challenging for them to repay their creditors. If you are such a person, you may have a few options available to you but, the most seemingly attractive one may be a debt plan or a debt management plan.
However, you would be wrong to think that a debt plan is your best option; in fact, it is one of the worst options you can choose. You can learn more about it by reading our article on the subject, ‘Disadvantages of a Debt Plan.’
What if you could manage your debts yourself?
It may seem unattainable because you may have been unable to do it so far, which is likely why you are here in the first place but, you have to start somewhere. Most importantly, anything that helps avoid a debt plan is worth a shot.
Always remember to consult The Law Offices of John E. Mufson in Delray Beach for the best debt relief in Florida that protects your rights and prevents repossession, foreclosure, or creditor lawsuits.
Let’s help you avoid shady debt plans and other debt consolidation scams.
Tips to Manage Your Debt and Avoid Debt Plans
Here are some handy tips for managing your debt better and avoiding debt plans.
Identify Your Debts
If you want to manage debts successfully, you have to identify and detail them first. The first thing you want to do is create a list of all your debts and note down the details of each one; this can include your student loans, personal loans, credit card debts, etc.
You want to detail a few critical things for each debt to make management more effortless.
- Name and contact of the creditor
- The total amount of money owed
- Interest rate
- The minimum monthly payment for this debt
- Any applicable fees
- Terms of the debt
Doing this for all your debts will give you a complete picture, which will help you manage your debts better.
Strategize Your Debt Management
There are two ways you can go about paying your debts. However, whichever one you choose, you must first make sure that you make the minimum monthly payments on all your debts. Failing to make the monthly payments so will hurt your credit.
Moving forward, the first strategy is to start paying the debt with the highest interest rate. Once that is paid, focus on the second highest one, then the third, and so forth. You may struggle to pay off the first and most considerable debt but, following this strategy will save you money spent on interest in the long run.
The second strategy is to pay off the debt with the lowest balance first. While you may end up paying more in interest rates, the benefit here is that you will feel more motivated as the smaller debts start to disappear. The earlier gratification may be vital in avoiding the temptations of debt plans.
Stick to One Debt at a Time
No matter the strategy, you need to remain focused on clearing one debt at a time.
If you lose focus and start hedging, you will end up losing your strategy and its benefits. Paying off one debt at a time will allow for better progress because you pay off the principal, saving more on interest.
You will have to stop accumulating further debt and reduce your expenses as you go about following the mentioned tips and strategies. While it may seem complicated, you have to realize that opting for a debt plan instead will only worsen your situation and create further problems.
There are always better options, and we highly recommend that you consult the debt relief specialists at The Law Offices of John E. Mufson in Delray Beach, Florida.
If you want to learn more about how to manage your debt, avoiding debt plans, or if you want the best debt relief solutions in Delray Beach, Florida, please visit our website today.