fbpx

What are my debt options?

Share on facebook
Share on twitter
Share on linkedin

Americans are more in debt than ever before. In the first quarter of 2021, household debt increased by $85 billion, according to the Quarterly Report on Household Debt and Credit. The most significant contributing factors to the increase of the average household debt were:

  • Mortgage balances
  • Auto loans
  • Student loan debt

Surprisingly, while still high, credit card balances saw one of the most significant quarterly declines since 1999.

Debt is affecting millions of Americans every year. According to Debt.org:

  • There were more than 500,000 bankruptcy filings in 2020
  • 1.8 million homes went into foreclosure between 2016 and 2020
  • And 1 in 824 homes was foreclosed on in the first half of 2020

As many people continue to recover from the economic uncertainty of 2020, many homeowners are faced with the daunting task of managing their crippling debt. If you’re looking for ways to handle your debt and relieve a little stress, here are a few things you can consider:

Debt counseling

If you have a lot of debt, you should consider working with a debt counselor. A debt counselor will review your debts and budget. Some will offer to help you settle your debts with the creditors. Keep in mind that your credit score could be affected if you choose to do this if you settle for less than what you owe. You should also do your research before choosing someone to work with. Aim to work with non-profit credit counselors.

Refinancing loans

If you’re struggling to make monthly payments, refinancing your loans can help you save money. If you qualify for lower rates, your lender could help you lower your monthly payment. As an example, a 5-year, $15,000 loan with a 12% interest rate would have a payment of $333.67. If you refinanced your loan to a 10-year loan with an 8% interest rate, your payment would drop to $181.99.

Debt consolidation

Juggling multiple debt payments can make it tough to budget every month. It can also be expensive. Consolidating your debt could help you streamline your budget and lower your monthly payment. Debt consolidation can be a good idea if you have multiple high-interest credit cards. Once you consolidate your debt payments, you’ll make one fixed payment each month.

Debt snowball

If you’re ready to tackle your debt and are looking for an easy-to-follow system, the debt snowball or debt avalanche is a good choice. Essentially, you’ll continue making all your minimum payments on one debt, except one. Take any extra money you have and pay it towards one debt. This could be the debt with the lowest balance or the highest interest rate. Once you’ve paid that debt off, use the money you were paying towards that debt and add it to the next one on your list. Continue doing this until all your debt is paid off.

Earn extra income

While this is often easier said than done, increasing your income can help you pay off your debt faster. Many people have turned to working freelance, taking a delivery route, working a second job, or selling items to get extra cash. You can use the extra money to begin tackling your debt. Use any earned money to apply towards snowballing.

Some ideas for extra income include:

  • Driving for Uber, Lyft, or Door dash
  • Delivering Pizzas
  • Finding quick jobs on Task Rabbit
  • Selling items on eBay or Craigslist
  • Start freelancing (data entry, writing, website design, etc.)
  • Start a dog-walking business
  • Mow lawns
  • Teach a skill (tutor, teach music lessons, teach art classes)
  • Deliver groceries
  • Babysit
  • Pet sit
  • Housesit
  • Rent out an extra room in your home
  • Rent out space in your garage
  • Rent out your parking space
  • Rent out equipment (like music equipment, lawn tools, etc.)

Sell your home

If your debt feels insurmountable, you could sell your home. Selling your home could allow you to use the earnings to pay off debt. You can also save money by finding more affordable housing. If you need to sell your home quickly, selling your house for cash could be a good option. Brick purchases homes from buyers with no inspection required. We purchase homes in any condition. If you need funds quickly to pay off debt and start new, we can help. Call us today to learn more about how we help our sellers have the best experience possible.

Share on facebook
Share on twitter
Share on linkedin

Recent Articles

Get an offer on your home.

Address

When life closes a door, and you need to sell.

We buy homes at the speed of life. Request your offer today and lets build a solution that works for you.

Address

Further Reading

How to Sell Your House Fast

Sometimes you just don’t have time to put your home on the MLS, wait for interested buyers, and then hope the potential buyer doesn’t back out or lose their financing.

Do you need to downsize quickly?

Simplifying the downsizing process is key to successfully transitioning to a less cluttered lifestyle quickly and as painlessly as possible.

Content on this site is not intended to create, and does not constitute, an attorney-client relationship between the user or any other person. The information provided should not be used as a substitute for competent legal advice from a lawyer whom user has retained. No content provided any User is intended to provide, and in no event shall it be treated as providing, legal advice.