How To Pay Down Debt - Find Out About One Of The Best Ways To Pay Off Debt

Serious debt problems are unfortunately on the increase in this time of economic difficulty, leaving many people facing a problem they have never had before. Most of us have thankfully not had to face the problem of a debt crisis in our lives, so the fact that most people are unsure about the best way to get rid of debt is hardly surprising. It is wise to seek advice on how to pay down debt before launching on any course of action, because the best way is not always the most obvious.

Being short of money has a habit of making people want to borrow more money to solve the problem. This would almost certainly be a mistake, as borrowing more money can only add to your overall burden of debt and ensure that you take much longer to become debt free. Another route that people have heard of is bankruptcy, but this would be an extremely serious step with long lasting consequences, so it should not be entered into without very careful thought and an understanding of what is involved.

Go to any independent debt counselling service that has no interest in making money from your plight, and the advice they give you will almost always revolve around negotiating new terms with your creditors. There is no magic way to make debts disappear, but you may be able to come to arrangements with the companies you owe money to about changing the terms of repayment and even wiping out a certain amount of debt.

All the other debt solutions that people will be tripping over themselves to offer you involve taking more money from you. Consolidating your debts in a new loan will cost you more money in interest, and debt management plans, IVAs and bankruptcy all make money for the companies who offer to administer them, because part of what you pay out goes to them.

There is a tried and tested process of negotiation that is well worth attempting before considering any of the costly alternatives. You will of course need some help with the details of the procedure, but this is all freely available online. The process first of all involves communicating with your creditors about your situation and getting them to confirm your outstanding debt. You then put all your debts into a priority order and create a personal financial statement to demonstrate the exact state of your finances. Then begins the process of making offers to creditors, based on what you can show them is both fair and the most you can actually afford.

This is the only way to pay down debt that you can manage for yourself and which does not involve borrowing or spending more money, and therefore making your situation worse. It is the process which is most likely to lead to a situation where you are debt free and can stay that way.

Read a detailed guide on how to negotiate debt.