Life can take unexpected turns. One day everything is going great, your job is stable, your family is healthy and all’s right with the world. The next day the script is flipped in an instant. Jobs go away, health problems arise, and family problems emerge. With these tribulations can come debt.

By and large, most people are upstanding. They borrow money; they want to pay it back. But there are times when this simply isn’t possible in the time frame allowed. If you’ve found yourself in this situation, you’ll be glad to know these open secrets behind beating debt.

Minimum Credit Card Payments Are a Trap

If you have several credit cards on which you’re making the creditor’s recommended minimum payment, you’re actually maximizing the amount of profit that lender can make on the loan. A $10,000 credit card debt at 15 percent interest will take 28 years to repay and the credit card company will realize a profit of $12,000. The only time you want to make minimum payments on credit card debt is as part of either a snowball or an avalanche debt elimination plan. Both are highly effective methods of retiring debt that creditors hope you never figure out.

Consolidation Makes Debts Easier to Repay

If you’re sitting on a stack of individual debts that are accruing interest faster than you can repay them, consider a debt consolidation loan. This can combine all of those bills into one—at a lower interest rate and with a lower monthly payment than dealing with each bill individually. You do need to be careful to make sure the math on the loan you get does indeed return savings. You’ll also need a good credit rating to ensure you qualify for a favorable interest rate. But if you shop carefully, you’ll roll all of those bills into one and pay them off much sooner than you would on an individual basis.

Interest Payments and Fees Can be Waived

If your debt situation has become overwhelming, you can work with a credit counselor to enact a debt management plan. This typically entails waiving the interest and fees associated with credit card debt. Card companies agree to this when you’re in trouble because they’d rather at least get their capital investment back than lose the entire thing if you file bankruptcy. This will have a slightly detrimental effect on your credit score, but not as bad as defaulting on the loan altogether.

Debt Really Can Be Settled for Less than the Total Owed

When you run across ads declaring debts can be cleared up for pennies on the dollar you might think to yourself; “Yeah right, and Tinkerbell’s magic fairy dust will keep me eternally young too.” While we can’t speak to the efficacy of Tinkerbell’s magic fairy dust, debt settlement companies really can negotiate discounted settlements with lenders.

Full disclosure; your credit score will take a hit and the IRS considers the forgiven part of a loan taxable income. But if you’re in dire straits, debt settlement (also known as debt relief) is a viable method of avoiding bankruptcy and its cataclysmic effect on your credit rating.

As a cautionary note, the debt settlement industry is a fertile breeding ground for unscrupulous operators. It’s also rife with misinformation like the false rumor that Freedom Debt Relief lies to its customers; despite the company having a long tenure and solid reputation. But with careful due diligence you can find a respectable company with which to work to eliminate your debt.

Life happens, and things don’t always go as planned. These open secrets behind beating debt can be a Godsend when you’re struggling to pay bills. If you ever find yourself face to face with this sort of misfortune, it’s good to know there are things you can do to turn the situation around.

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