Financial Help for Debt

Cut up your credit cards to avoid going deeper into debt.

Debt can cause a lot of problems in your life, including lower credit scores and stress over being broke because all your money goes to paying off debt. People sometimes get into debt due to irresponsible spending or because of an emergency, such as a medical issue. There are a number of options for people in debt to get help and get out of debt as quickly as possible.

Debt Consolidation

Many companies exist to help you consolidate your debt. Debt consolidation is advantageous because it merges all your applicable debt into one consistent payment each month rather than many different payments. Debt consolidation companies also can help reduce interest rates and eliminate some late or missed payment fees, saving you more money. You can consolidate your debt through a company, a second mortgage or by using a credit card with a high limit and low interest rate.

Loans

Loans are another way to get financial help with debt. A home equity loan allows you to borrow against the money you have paid toward your home mortgage and use the money to pay off debt. Also, you can apply for a personal loan from a bank or lender, or ask a friend or family member to borrow the money to help you get out of debt. However, loans are really just a way of transferring the debt; you still need to repay the loan, so you are not totally out of debt. But a loan likely has a better interest rate and payment plan, which saves you money and eases stress.

Call the Companies

Another way to help with getting out of debt is to call the companies to whom you owe money. Many companies are willing to work with you to set up a payment plan that works for you. They might lower your interest rates or even waive some of the debt amount. They also can set up a regular payment schedule so your payment is always the same each month to better help you budget your money while paying off your debt.

Government Help

You also might qualify for government assistance to help you pay off your debt. A number of mortgage modification options are available to reduce monthly mortgage payments and help people behind on their house payments. Also, the federal government has grants in place to help people pay off credit card and other debt; visit the Catalog of Federal Domestic Assistance and Grants websites to apply. A number of local charities and organizations may be able to help, as well; check with your local United Way or Salvation Army offices for options available to you.

References

• Mortgage Loan: Four Advantages of Debt Consolidation; Greg Mischio
• Money & Minds: Government Grants to Pay Off Your Credit Card Debt -- Blessings in Disguise
• Help Paying Utilities: Charities and Other Groups can Provide You Help With Bills
• The Motely Fool: 9 Ways to Pay Off Debt
• Neighborhood Legal Services: Deferred Payment Agreements

Resources

• Catalog of Federal Domestic Assistance: Home Page
• U.S. Department of Health and Human Services: Grants.gov