This guest post is brought to you by Stephanie Stover on behalf of the Credit Counselling Society of British Columbia (CCSBC), a non-profit debt solution service. You can find more information about Credit Counselling at http://www.nomoredebts.org.
People who may have been victimized by high interest rates, actually have many debt solutions available. Since there are various solutions to choose from many times the chosen solution will depend on the severity of the debt. Two very popular solutions are converting assets into cash and debt consolidation.
Converting assets into cash is a fairly common practice for those with major debt. In an effort to avoid collection distress or bankruptcy, property can be sold, extra cars, trucks or vehicles, snowmobiles, boats, trailers, or even household items can be turned into cash to help pay off the debt. These types of items can be sold and the money may be used to pay off the high interest debts. Unfortunately, this may seem like one of the more drastic debt solutions, however selling valuable assets or items may be the best way to keep one from claiming bankruptcy in the future.
Debt consolidation is another popular solution for those who have accrued debt. Debt consolidation is the process of combining two or more loans into one, with one lower and more stable interest rate. While consolidating ones debt may not actually lower the debt, it will help to pay off the debt faster and will offer a better interest rate on the debt.
Once the debt is under control, it is important to create a realistic monthly budget that allows one to live within ones means. Include a savings component for seasonal expenses and emergencies. Put credit cards away and use cash or a bank card to manage expenses and bills.
Whichever debt solution method is chosen, it will help stabilize ones finances and will prevent one from having to choose a more drastic solution such as bankruptcy. Although there are various debt solutions available to help those who have accrued a large amount of debt, the best solution is to be pro-active, and learn how to avoid getting into debt in the first place.
Saving for more expensive items such as home appliances, vehicles, and recreational equipment will allow one to pay cash for such items and not obtain debt. Limiting debt and paying off debt monthly may help keep one away from annoying debt collectors, and although there are many debt solutions available, not acquiring debt in the first place is the first step in managing money wisely.