Would you like to get out of debt for good? Do you even realize that it is possible to? Do you have any idea how to do it? Well, the first thing that you need to avoid are credit cards. I’m not necessarily talking about major credit cards like Visa, Mastercard, AMX, Discover, etc. I’m talking about credit that you’d get at a department store, gas cards and things of that nature. I’m not saying that having ONE major credit card in case of an emergency is a bad thing, but don’t use it for anything other than that.
#2 If you have a small amount of debt yet you cannot abide to the monthly payment required, apply for a time extension. Be committed to paying all your debts in the time frame given to you.
If you have a sizable savings account, use that to help pay down your debt. It makes absolutely no sense to earn upwards of 3% on your savings account when you are paying anywhere from 15 – 20% interest (or more) on your credit card. Savings should be a priority only after you are completely rid of eliminate credit problems.
You cannot spend what you do not see. If your company offers it, have them deduct money from your check and put it into savings. If they offer a 401K program, take full advantage of their matching contribution.
I solved the problem easily by going to my credit union and opening a second checking account. This account has a debit card with a credit card logo on it. It can be used as a debit card or as a credit card. I simply make the payments to that account that I was making to a credit card company. And who gets the interest on the account? ME. I manage the account, track the purchases, everything.
Unsecured debt should never be paid off through a debt consolidation loan. With a loan, you have just moved the debt from one place to another and now it is secured with your home. In your current situation, if you don’t pay your unsecured debt about the worst thing that can happen is you could be sued by your lenders and they can put negative entries on your credit report, but you will still have your home.
There are many options available when buying a home. If making the purchase through a family member is the choice, take the time to make sure everything is done correctly. It could save you a lot of problems in the long run. You would not take out a loan or buy a car with out doing your home work so do not buy a house (even from family) without research.