Debt free life and how to manage it

Someone has said it right that debts are toxic. They should be eliminated from our lives. Leading a debt free life seems to be a far cry these days and there are very few American households living without debts. The aftermath of sub prime mortgage crisis is not new to us and we are still waiting for the stock markets to turn around. There has been a change in investor sentiment; the credit card issuers have changed their payment policies and the lenders have also taken a different stand as far as lending is concerned. Credit crunch has made lending more stringent. Lenders are being very selective in accepting loan requests.

If you are in a debt trap and wondering how to become debt free, there are a number of debt relief options that should lessen your debt burden. Debt consolidation is an option that majority of the debt help firms offer. If you are hiring the services of a debt consolidation agency, they do all the talking with your creditors. The debt consolidation agency requests creditors to lower your interest rate. And if your interest rate is lowered, your monthly payments get lowered too. You are also able to make payments as per a new repayment schedule. It enables you to manage your debts more effectively and consequently your finances.

You can also take a debt consolidation loan but it is better not to do so. The main reason is it only adds to your existing debts. It is better to reorganize your current debts and manage them instead. While choosing a debt consolidation agency, make sure that the firm is accredited by BBB or Better Business Bureau. Reports (as of March 27, 2009) suggest that the BBB is receiving more complaints related to 3 party debt counselors. So, before you hire services of a debt consolidation or debt help company, don’t forget to do your bit of homework.