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2 Smart Credit Solutions: Debt Settlement and Budgeting

When you are struggling to pay back your debts but are unable to do so, then you should take some steps right away. You can take the help of various types of credit solutions that are available in the market. These credit solutions help you in reducing your debt load. In this article we shall discuss 2 types of credit solutions – debt settlement and budgeting that can help you to solve your credit problems.

Budgeting
When you are suffering from credit problems, the first thing that you should do is to make a budget. You need to make a strict budget so as to know how much you spend per month. If you see that you are spending more than what you earn, then you have to change your spending habits. Cut down on your luxury expenses and start increasing your cash flow. The more money you earn, the better. You can use this extra money towards paying your debts.

If you feel that you are unable to make a budget, then you can take the help of credit counselors who can help you in making a budget.

Debt Settlement
This program helps you in lowering your total payoff amount. Usually, this program can reduce the total debt amount by 40% to 60%. You can take the help of a debt settlement company in order to settle your debts. There are several debt settlement companies in the market. These companies/ firms do charge a fee for their services. This means that you have to arrange some cash for paying their fees.

After, you have enrolled into a debt settlement company; the staff / professionals of the company will open a trust account for you. You will be advised by the settlement company to stop making any kind of payments to the creditors. You are required to deposit your hard earned money in that account until you have saved 50% of the outstanding credit balance. When you have done so, the professionals of the firm will negotiate a lump-sum with your creditors. If you are content with the agreed amount, then you are required to sign a contract where you pledge to pay the agreed sum.  

You can take the help of these 2 credit solutions to solve your credit problems. However, you should not also forget that no credit solutions can wipe out your debts overnight. You do need to have patience and determination.