Start Now (II of III)
This is the second in a three part series on how to get a handle
on your debt.
Call your car loan company and tell them the same thing. See
what they can do to reduce your payments or put them on the back
end of the loan. That is an option for your mortgage as well –
you can put the payments on the end, or get a lesser interest
rate – see what they say.
You can do a refinance of your mortgage sometimes for a lesser
interest rate and get cash out – so you can pay off the car loan
or some of your other debts. This is one way of fixing the
monthly amount that is going out – but it is really only making
your mortgage bigger, so you should try not to do that.
Now look at the amount of unsecured debt that you have. This
debt is free in the sense that if you don’t pay it they can’t
come take something from you. They will call you and harass you
– but they can’t actually do anything to you. They don’t’ have
debtor’s prison anymore and the worst thing that can happen is
that they get a judgment against you which simply says that you
owe money and when you have it you have to pay the loan back.
With this type of debt quite often they want you to look toward
a debt consolidation. With a debt consolidation you take all of
your miscellaneous credit card, medical, etc. debt and put it
into one lump loan. The interest rate is usually lower than what
you have been paying and because of that – and the fact that you
have longer to pay it off – you end up with a lower monthly
payment than you had before.
Next time we are going to discuss debt consolidation versus
bankruptcy and how settlement factors into the equation.
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