Clear My Debt - How Can I Clear All My Debts?

For the average consumer, it seems as if the rule of thumb that applies is that as long as there are items to buy, someone is willing to lend the money to buy them. This rule particularly applies to credit cards.

When you live in a credit-obsessed world, it seems as if you cannot get by without swiping that thin piece of plastic and acquiring debt in the process. But what if you find that you have acquired more debt than your finances can actually handle? What should be your answer to the question "How do I clear my debt?"

What Options Do I Have to Clear My Debt?

The first thing that you need to do is have an overall look at the status of your finances. Calculate the money that is coming into the household through your average monthly earnings. Deduct from this your regular monthly expenses like your rent or mortgage, car loan payments, utilities and budget for food. Then bring out your credit card statements and check if you have enough funds left to pay off if not the entire amount – the minimum amount that is due.

If you had to do a juggling act figuring out how much minimum amount you can safely pay off or how you can avoid calls from collection agents, you might be dealing with more debt than you can handle. If this is the case, what's the answer to the question of "How do I clear my debt?"

Fortunately, there are viable financial options that you can choose from. Depending on the gravity of your financial situation, you can use debt consolidation or debt management services. In order for you to find answers to the question how to clear my debt, the financial expert will take a look at the overall status of your finances.

Then, they will be the one to conduct negotiations with your creditors so that the interest or the monthly payment for your debts can be reduced. If debt consolidation is the best path to take in your debt management plan, then you will only have one monthly payment to make instead of juggling several monthly payments.

Another good thing about dealing with debt management service providers is that if your financial circumstances change, you can talk with the debt advisor about either lowering or increasing your payments. Naturally, when your payments are lowered, the term by which the loan will be repaid is greatly reduced.

Although there are numerous benefits to debt management as a way to clear your debt, you need to be aware of the downsides, too. One disadvantage is that the lower your monthly payments are, the longer the period it could take for your debts to be fully paid off. You might also have difficulties obtaining further credit, and there is no guarantee that all creditors will agree to negotiate the terms with you.

In general though, the pros far outweigh the cons, so there is absolutely no reason why you should not look into debt management as a way to clear your debt. Always approach a few reputable companies and apply to more than one before making a decision.

By: K D Garrow

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Find out more about the question of ‘how can I clear my debt’ on the author's Debt UK website, which offers free, unbiased advice on issues including how to get debt written off.