Guest Post by Jason Holmes
How did I manage to pay off my debts?
Many of us have faced debt related problems in life and have wanted to come out of the situation desperately. I was in such a situation once and am still paying off my credit card debts. I kept on spending money without realizing the impact that it is going to have on my finances. This led to the piling up of a lot of debt that I had to pay off.
I want to share what I did for paying off my debts, so that you may draw something out of my experiences and put it to use in your life, if you are going through such a situation too.
1. Budget formulation: With the help of counselors from the consumer credit counseling agency, I formulated a budget. This provided me with a clear idea of what my income was and where was I spending it. The budget helped me realize that I was earning enough to live a decent life but it was not enough to indulge in luxuries or to help me in "http://www.debtconsolidationcare.com/"paying off debt that I presently had.
2. Cutting down expenses: I had to adjust my spending habits according to the budget I had made. The majority of my income was spent in purchasing clothes, some that I never even wore. I decided on restricting this urge to buy clothes by not going to fancy malls at all. This helped greatly as I managed to save a lot. I would not see any branded clothes and thus would not crave to buy any. This in turn helped me gradually develop the strength to say no to things that I did not really need.
3. Checked on my credit report: I wanted to improve my credit score that had gone down drastically. So I ordered for my credit reports from all the three major bureaus- Experian, Equifax, TransUnion. After getting my reports and going through them, I realized that one of the
debts that were charged to my account was not mine. I disputed this inaccurate information and it was removed from my credit report.
4. Credit card consolidation: As my financial position permitted me to make at least some payments, so I opted for credit card debt consolidation. The total amount of debt after the disputed amount was removed came up to $78,000. The minimum payments that I was making towards my bill were as follows.
Minimum payment on the first card with debt $12,000, at 5% was $600
Minimum payment on the second card with debt $10,000 at 15% was $1500
Minimum payment on the third card with debt $18,000 at 6% was $1080
Minimum payment on the fourth card with debt $11,000 at 4% was $440
Minimum payment on the fifth card with debt $12,000 at 11% was $1320
Minimum payment on the sixth card with deb15, 000 at 6% was $900
Thus, my total minimum monthly payment came up to $5840. The debt consolidation company got my interests reduced and after the reduction I had to pay $4500 every month to the company. This amount was then distributed among my creditors by the debt consolidation company. The amount included the fees of the debt consolidation company as well. I did not have to bother about paying multiple creditors and also had to pay much lesser than what I was supposed to pay originally. Another benefit that I got was that my late fees were waived off. Harassing calls from creditors also stopped as all calls that they made were diverted to the consolidation company.
I have managed to pay off a major portion of my debt. However it will take some more time to get out of debt completely. I am happy with my progress and as per my debt consolidation company I will be debt free in about a year if I can manage to stick to the program.
Jason Holmes is a regular writer with Debt Consolidation Care and is also a contributory writer with other financial sites. His expertise is woven around various aspects of the debt industry and with his e-books he tries to impart to people the different situations and simple solutions to get out of difficult situations. Some of his works include e-books like 'Credit Score The Quintessential Therapy for a Happy Pocket', Take Creditors and Collection Agencies to Small Claims Court' and, My Story- From Depression To a Smile'.
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