Being in debt can be overwhelming at times and even scary; being in debt through being laid off or fired from your job can be downright terrifying. With the high unemployment rate, are you safe in your position? Perhaps you have been recently let go from your job, your pay checks have stopped coming in but your debts will still become due at various times through the month. Rest assured, being in debt while going through the process of unemployment doesn’t have to equal bankruptcy, use these tips to maintain your debt repayments even through times of being unemployed.

Take Advantage of Debt Payment Reprieves

In most cases, if you are facing financial trouble and contact the creditor there are often options to halt payments temporarily until the consumer is able to get back on their feet. This means that the consumer can pay lower monthly payments that have little or no interest or even take the time to repay other debts and use what little money is coming into the household to cover the expenses that seem to accumulate – despite the gaps in the income.

Take advantage of payment protection Insurance

If you have signed up for payment protection insurance in the past, now is the time that you may become eligible to use it. In the case of a job loss or illness, the consumer can often have the minimum payments covered by paying a monthly premium. Simply contact the credit card company to see how you can begin to have your minimum payments covered.

Use Savings to Maintain Minimum Payments

When you use the savings account to maintain the minimum monthly payments that are due through the time that the consumer is unemployed, it can help to ensure that your credit rating is preserved. If you have not started an emergency fund or savings account in the past – than this may be the time to start one and realize the importance of the financial measure.

Take Advantage of Debt Consolidation Loans

There are two main benefits to debt consolidation loans. Debt consolidation loans allow the consumer to have a lower monthly payment and they come with a lower interest rate. These two aspects are combined with the fact that the debt consolidation loan is stretched out over a longer period of time to reduce the minimum monthly payments. Taking advantage of these types of loans can make debt repayment affordable – despite the temporary reduction in income.

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When trying to get out of debt, it may seem as if there is no light at the end of the tunnel. It seems that bills come in accompanied by final notice warnings and many seem as if they are overdue. Once you have entered the cycle of debt, it is important to remember that there is debt relief that can come from careful planning that is made once you have made the decision to get out of debt, for good!

Here are five techniques that can help in getting out of debt:

Assess Your Spending and Live Within Your Means

Assessing the spending can determine if you are living within your means. Living outside of your means often requires the use of credit, which can accumulate every single month. If you are spending more than you are making it is time to take careful consideration of your spending habits and determine where you can begin saving money to apply to the debt.

Apply for a Debt Consolidation Loan

A debt consolidation loan can take multiple monthly payments to various creditors and transition this payment into one that is often lower in the amount and interest that is being paid towards the debt. This payment terms is extended over a longer period of time to enable lower monthly payments and can preserve the credit rating by repaying the debt that has been accumulated.

Stop Using Credit

If credit use is the problem that you are facing high amounts of debt, it is important to stop the credit card use! Even if it means putting the cards on ice or placing the credit cards within a safety deposit box to ensure that they are not used on a regular basis – it is important to stop using credit in order to get out of the cycle of debt.

Bring Home More Money

If you bring more money into the household, than the fifteen percent of the budget that is allocated towards debt repayment can be increased. Consider asking for extra hours or a raise at work or even taking on a second job to expedite the debt repayment process. All of the money from the extra job can be allocated towards debt repayment, in another option to repay debt. Remember, the quicker that the debt is repaid, the less money that is spent on interest payments that are accumulated.

Seek Help from Experts

Credit counseling or debt management companies provide assistance with creating an effective repayment plan and may even negotiate with creditors and allocate payments for a small monthly fee. These experts are often able to cut the costs of the debt, cut the interest rate and negotiate settlements. Be sure that all minimum monthly payment requirements are being met in the process to preserve the credit rating.

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