Are you in debt and do not know how to get out of debt? Are you interested in having a strategy to deal with this problem? In this post, we explain how to carry out a strategy, which allows you to review your finances carefully and follow a series of tips that will surely allow you to find a way out of your economic problems.
Debt clearance strategy: Accounts with money saved?
If you are in debt, the first thing you should do is ask yourself: Do you have money saved? Why do you have it saved? It is normal for many people to be afraid to use their savings to pay their debts, but you must be clear that debt consolidation via top debt management companies this is the best you can do, since in this way it will be possible to quickly eliminate the monthly interest rates associated with these debts and you will be able to Save more comfortably later.
So the first recommendation is to pay off your debts with the money you have saved, in this way you can generate more money with which to build debt-free capital.
An example of these is the following: if a couple has a lot of debt, and has been saving money in a fund for the university study of their son, they will be able to have that money immediately, thinking that this money will only be used up 10 or 15 years old.
Surely taking this decision creates a sense of uncertainty, but in the long run, it will be a great choice since you can amortize the debts and be able to get the money in a much shorter period of time.
Debt clearance strategy: Make a list of debts and amortization table
Regardless of whether you have savings or not, you should make a list of your debts, in which you will have to include the name of the financial institution, the total debt, interest rates, pending payments, and term.
By making this list you will be applying a strategy of debt stacking or “stack debts” with which you can improve cash flow, by injecting money into debts with high-interest rates and low payment terms. For example: If your salary is $ 5 million pesos a month and you allocate $ 2 million to the debt and $ 2 million for your personal expenses, you will have $ 1 million pesos free, that when managing strategically you will not have to spend on a vacation or to enter in new debts, but you can use to significantly reduce these debts.
This million pesos will be most convenient if you inject it into the debt that has the lowest term and the highest interest, and thus you will be lowering the higher interest rates and you will feel that “you are coming out of debt”, which will motivate you more to continue on this path.
By applying this advice, you can see that even 9-month debt can be reduced to only 3 months and you will avoid paying interest for 6 months.
Debt clearance strategy: Purchase of portfolio
In case you do not have money saved and do not have surplus capital at the end of the month, you can choose the option to buy a portfolio, which consists of transferring a partial or total balance from one bank to another that offers better rates of interest or a longer term for the cancellation of the debt. This way you can have extra money at the end of the month.
Debt clearance strategy: Refinancing
It is possible that the purchase of the portfolio is not an option that suits you since at the end of the month you may not have the money for the payment of the debt and you will be in default, so what you should do in this case is asking the bank to refinance the debt. In this way, even if the time of the debt increases, the money you will have to pay each month will also decrease.
Debt clearance strategy: Restructuring
If neither the refinancing nor the purchase of the portfolio is the solution, then you should ask the bank for help with a “grace period” in which only the interest is charged, and in this way, you can save money and cancel the quotas in the future. monthly
Debt clearance strategy: Insolvency Law
As a last resort, if you do not have the money to pay off the debt, you have the possibility to cover the insolvency law. Here you must indicate to the bank that you have an equity that covers the debt, as it can be for example a property, a car or a farm. And in this case, the bank takes the property and will deduct it from the money it owes or the surplus will pay you. This alternative at first glance seems like a negative solution, but if you see it differently, you will stop having debts and start saving again a capital that is free of interest.