Don't be afraid to use a portion of your savings to pay down high-interest rate debts. Using cash reserves for debt repayment is a smart decision because you will stop accruing interest on those large balances. Although it may feel comforting to have some extra cash sitting in your bank account, the truth is that those funds aren't really working for you — not with today's record low interest rates. Don't deplete your savings entirely. If you're sitting on a pile of cash, do use some of those funds to eliminate your bills.
In the United States, the government offers specialized plans that are geared specifically for the repayment of federal student loans. Depending on the individual borrower, there are repayment plans that are income-based, plans that extend the term of the loan, or plans specifically for parents or graduate students. Repayment of most federal student loans can be postponed to some point in the future. Federal extended repayment plans can be stretched up to 25 years, but keep in mind that this will result in more interest paid out overall. For more information, use the Student Loan Calculator.

Debt got you down? You’re not alone. Consumer debt is at an all-time high. Whether your debt dilemma is the result of an illness, unemployment, or simply overspending, it can seem overwhelming. In your effort to get solvent, be on the alert for advertisements that offer seemingly quick fixes. While the ads pitch the promise of debt relief, they rarely say relief may be spelled b-a-n-k-r-u-p-t-c-y. And although bankruptcy is one option to deal with financial problems, it’s generally considered the option of last resort. The reason: its long-term negative impact on your creditworthiness. Bankruptcy information (both the date of your filing and the later date of discharge) stays on your credit report for 10 years, and can hinder your ability to get credit, a job, insurance, or even a place to live.


Credit.org is a non-profit credit and debt counseling service with a 45-year plus history of excellence and integrity. Best of all, their financial coaching is available at absolutely no charge. It is important to understand how credit.org is different than other companies in the debt services space. Credit.org provides an entirely free personal financial review along with an action plan that empowers you to make smarter decisions about your options to become debt free. Additionally, they can help you reduce your debt through debt management plans (where they may have the ability to reduce the interest rates you pay).

You close all credit card accounts and make one monthly payment to the agency, which pays the creditors. But you still receive all billing statements from your creditors, so it’s easy to track how fast your debt is being paid off. With a debt management plan, you’ll get some of the best debt consolidation loan rates (but not lower balances) and an end to over-limit and late fees if you pay as agreed.
Keep in mind, too, that contrary to popular belief, closing credit accounts won't immediately impact the length of your credit history and the mix of account types in your credit history. Closed accounts can stay on your credit reports for up to 10 years, and they can continue to impact your credit history's length and credit mix during this time. As a result, closing accounts as part of a DMP (or for any other reason), won't have an impact on these scoring factors for a long time.
I have three credit cards totally about $6K in debt. I also have much more in student loans but all cards have a higher interest rate. Do you recommend transferring these balances? I found another card that offers 0%APR for 21 months on balance transfers. Meanwhile I can pay this debt off over that time interest-free. Is there a drawback to doing this besides having another card open?
Debt resolution, also known as “debt settlement” and “debt negotiation,” can reduce your overall debt. A debt resolution company contacts your creditors and negotiates a level where you can pay off a percentage of your overall debt. However, the payment goes to a debt resolution company rather than to the creditors, meaning your credit score may sustain hits.
If your expensive habit is smoking or drinking, that’s an easy one — quit. Alcohol and tobacco do nothing for you except stand between you and your long-term goals. If your expensive habit is slightly less incendiary – like a daily latte, restaurant lunches during work hours, or fast food — the best plan of attack is usually cutting way down with the goal of eliminating these behaviors or replacing them with something less expensive.
Results with creditor negotiation can vary. Your success depends on a few factors. If you’ve been a longtime loyal customer who always pays your bills on time, negotiation is more effective. You may also have success if your credit score has improved since you opened the account. If you’ve already missed payments, habitually pay late or you reached your credit limit, negotiation is often tougher.
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If you don’t already have a budget, you need to make one. This can be one of the hardest things to do on this list because there’s one really big problem with most budgets: they’re aspirational. Instead of budgeting for how they actually spend, most people budget for what they want to spend. What does this mean? Say someone budgets $20 for coffee in a given month, but buys a $4 latte from Starbucks every morning on the way to work. That person is setting themselves up for failure!
For example, if you don't think you'll qualify for a balance transfer credit card because of your credit score, you may still be able to take out a personal loan. If you can move half your credit card debt to a personal loan, you'll lower your credit utilization rate – the percentage of your credit limit you're using – which could quickly increase your credit score. This could, in turn, help you qualify for a better offer on a balance transfer card.

The content on this page provides general consumer information. It is not legal advice or regulatory guidance. The CFPB updates this information periodically. This information may include links or references to third-party resources or content. We do not endorse the third-party or guarantee the accuracy of this third-party information. There may be other resources that also serve your needs.


The professionals at National Debt Relief are experts at debt settlement and debt negotiation. They have many debt settlement letters proving how they’ve saved their customers thousands of dollars. Of course, the amount of savings can vary from customer to customer based on a variety of factors. Once you create your custom debt relief plan with them, they'll be able to tell you how much you can expect to save in your situation.
hi. if they are over 7 yrs old dont worry about them. in addition, some companies will sell the debt to 3rd party collectors to try to collect even will attempt to threaten or scare you to pay. let it go. if it is student loans etc, pay those with a consolidation contract (not loan) with the federal student loan org……Fedloan.org. they will work with you.
I am a disabled veteran that had to medically retire in 2012 after 28 years of service. I am in debt for $76500 and some high interest that I am paying. I have no mortgage note, own my home paid cash for it and paying one of my bills $935 a month which I owe 2 more years on it. My house got damaged in the storm 2 weeks ago and I have no insurance. I have not been late on any payments which I pay about $3175 in bills every month and it leaves me with $186 to last until next payment. I can’t get a consolidation loan because my debt to ratio is too high. Because my house is under renovation no one will give me an equity or loan against my house until the damages are fixed and I can move into it.
Know that with any type of debt consolidation loan, you're not getting rid of your debt. Instead, you're simply shuffling it around so that it becomes easier to pay. You'll feel like you have less debt and may be tempted to borrow more. Practice discipline and avoid borrowing until after your debt consolidation loan has been completely repaid. Even then, it's important that use good judgment in taking on additional debt.
The sad fact is that usually only the wealthiest kids are taught good financial practices and habits, so they have advantages throughout their entire working lives. Those of us less fortunate have to figure out (too late – if ever) that creating/establishing multiple streams of income is one of the most certain methods to ensure a better life. Sure, many people think opening a business will make them plenty of money, but the reality is more like plenty of headaches before plenty of money. Many people start a family early in life, and this also can be an obstacle to financial success.

If you are struggling to make your monthly credit card payment, or can’t catch up with your past-due payments, we may have solutions for you. The sooner you contact us, the sooner we can determine what help may be available. We will review the nature of your hardship and your financial information to determine what payment solutions you may qualify for.
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