It can be a nightmare finding ways to get rid of debt. Millions of people have found themselves seriously in debt due to easy access to cheap credit cards and the behavior of getting credit to buy the things they can’t afford to pay in cash. When they can’t keep their debt repayments on track, they are in trouble and a solution is needed to get rid of debt.

Debt will definitely stay without an action to resolve it. Therefore, the option to restore your finance back to a manageable level is to find a way to settle the money owed to creditors. The earlier you face it, the more options you have to get rid of debt. If you ignore it, it goes worse until bankruptcy is the only option left for you to get debt free. Don’t let it happens on you. If you have detected the signs of debt problems, there are at least 3 effective ways to get debt free without bankruptcy:

1. Take out a consolidation loan

One of the best ways to settle serious debt problem that put you at risk of bankruptcy is by settling it through a consolidation loan. There are many consolidation loans available in the market that you can apply to consolidate and pay off the debt. But, if you have damaged your credit rating due to late and default payments, you may not be able to get a good consolidation loan unless you have a home with equity to apply for a secured home equity loan for debt consolidation. Therefore, if you own a home, you stay at the best chance to secure a consolidation loan to get rid of debt. However, if your credit score is not seriously damaged, you may find an easiest consolidation loan, but may not at the best rate. Debt consolidation should be a better solution for debt relief and enables you to avoid bankruptcy.

2. Pay your debt using the snowball method

If you already in debt, the only way to get rid of it is to pay it off. There is a payment strategy called snowball method that will help you pay it off faster. The snowball payment method works in this way: First, you list all balances for credit cards and loans in the descending order from the highest interest rate with the largest amount at the top of the list. Then, you pay the minimum payment for each balance except for the top one. You should dump as much money as you are afforded to the top payment, which has the highest interest rate and the largest balance. Repeat the process until you pay it off. Then, eliminated it from the list. Repeat the same process by paying the most money toward the debt at the top list and eliminates it once it is cleared. This is the most aggressive method to get rid of debt fast. It works by focusing on the debt with highest interest rate and largest amount. The snowball method not only helps you get rid of debt fast, but save the most interest at the end of payment.

3. Sign up a debt management program

Credit counseling service is another good approach to get debt free without bankruptcy. Generally, you will be proposed with a debt management program and your creditors will be notified when you have signed up with the program. Under the debt management program, you will need to pay a monthly payment, including an administration fee to the company and your debt payment will be taken care of. If you follow the payment schedule and complete the program, you will be debt free.

Summary

Bankruptcy may not be the only option to get rid of debt even though you feel it is the only way out for you. The 3 effective ways above are among the options to get debt free without the need to go for bankruptcy filing. You should assess these options before making decision for declaring a bankruptcy.