Debt elimination is a very easy process. All it requires is a proper planning, an organized approach, a good financial plan, and of course discipline & patience. Debt elimination is a debt reduction process that enables a person to get out of debt in a shorter time frame.
Debt elimination is simply the process of reducing total debt liabilities & loan payments to zero, i.e., the full debt elimination process, before the repayment takes place and the debt suffering person is then considered free from debt. Debt elimination can be achieved in various ways like debt consolidation, debt settlement, debt management, debt counseling, etc. The first and foremost thing in debt elimination is to make a plan and get all details regarding debt elimination. The plan should consist of the amount of funds required, the interest rates that have to be paid back, and also the time period until which the entire process will be completed. This time period will determine how much savings one is capable of earning.
Debt reduction services can either be provided by the individual or else it can be provided by a third party organization. The best way to avail debt reduction services is through a debt reduction counseling agency. You can avail these services from a number of companies that operate through a legal set up. In this case, you will have to pay a fee for the debt reduction counseling that is provided to you. But you should always remember to compare the charges of a different company so that you could get hold of the best deal.
Most of the debt relief organizations offer free credit counseling session as part of their elimination program. You can easily find a number of such companies and then choose the one that suits your requirements the best. It is important to note that not every company offers debt elimination programs that are same in nature. There are a number of differences in the programs and the nature of the obligations involved that make each case unique.
The companies that provide debt elimination schemes also vary in terms of the duration of the programs. They also vary in terms of their monthly payments. While some debt management plans charge you once a month and allow you to make your payments in arrears, there are others who require you to make monthly payments until the entire amount is paid off completely. Again, there are a number of other types of debt elimination schemes offered by different companies. The best way to identify a genuine company is to ensure that they offer you a total debt management plan that helps you to eliminate your total debt and a program that allows you to make monthly payments so that you can actually become debt-free.
Debt elimination is not only about eliminating debts. You must also learn to live a life that does not include the specter of being under a load of debts. The first step is to devise a total debt management plan. This involves setting up an emergency fund that will cover all the unexpected expenses that occur during the course of a month. The emergency fund must be maintained well beyond the normal monthly payments due to it. This should also be an adequate amount to pay off all your credit card or store card debts, if there are any.
Once the emergency fund is created, you need to start paying off the debts that come up in the course of the month. A good way to go about this is to follow the snowball method. In the snowball method, you must pay a certain amount of money each month for a period of a month or more until all your debts have been eliminated. Then, you must make a fresh payment for the remainder of the debt and continue making payments until all debts have been completely eliminated. Thus, the method helps in eliminating debts and also maintains a monthly cash flow that ensures that there is not a problem with paying debts.
You may follow the snowball method or the avalanche method when you want to eliminate debts. The only difference between the two is that the snowball follows an intensive process while the avalanche goes much faster. However, both methods require you to invest time and energy so as to fully eliminate your debt problems. Thus, if you want quick results, you can combine the two debt elimination techniques and use the snowball method first before moving on to the avalanche method.