Debt Management is Not As Difficult As You Think (cont.)
Contributed by Andrea P
Debt Management Options
Perhaps the easiest solution to eliminating your debt is simply cutting down on expenses. David Bach, author of "Start Late, Finish Rich" suggests that one method of tackling debt is to eliminate your "latte" factor. Your latte factor refers to the seemingly innocuous expenses which accumulate every day. For example, let's say that you spend an average of $8 every day for lunch at work. If were to bring lunch from home, you would save an average of $160.00 per month, which could be potentially applied towards your credit card payment.
If you are facing more serious debt management issues, there are several alternatives to choose from. The National Foundation for Credit Counseling provides debt management services including the opportunity to speak with a financial services professional. The NFCC also provides a listing of reputable local and national agencies that can assist you in resolving debt management issues.
Other options include consolidating your debt into one lump sum to negotiate lower interest rates, which can also be done with the assistance of organizations like the NFCC. You might also consider taking a loan from your your 401K. However, be advised that if you withdraw a significant amount of money from your 401K plan, you are still required to pay it back. Furthermore, if you leave the company, voluntarily or not, you may have to pay the loan back immediately.
Consider your options carefully and above all, do you best to avoid declaring bankruptcy, as this may negatively affect your credit rating for years.
Although getting out of debt is considerably more difficult than getting into it, you can still take positive steps to resolving your debt management situation.
