Share this Twitter Myspace Digg Del.icio.us Yahoo Technorati Googlize this Blinklist Facebook Wikio Hear this text Print E-mail RSS

Debt is a major headache--there are no ifs, ands, or buts about it. The problem is, unlike headaches, debt doesn't miraculously disappear after getting some rest or taking some medicine. To get rid of debt, it will either take a large amount of money or a good debt management plan. Because large sums of money don't just fall out of the sky, for most of us, debt management is the best way to go. If you are suffering from piling debt and you are unsure what to do, then you may want to consider one of the following debt management solutions:

 

Fixed rate repayment plan

One way to manage your debt is to get a fixed rate repayment plan, which will require you to make fixed monthly payments over your payment period. In most cases, these standard, fixed-payment plans have short repayment periods, equating to lower cumulative interest costs.

Extended payment plans

Another debt management option is to draw out your payment period over an extended timeline. This will likely result in a higher cumulative interest expense over the long run, but you get the benefit of having very low monthly payment fees. This is the best option for those who don't have enough income to make big payments on a monthly basis.

Graduated payment plans

If you want a balance between extended payment plans and standard payment plans then a graduated payment plan may be best for you. This type of plan starts out with low monthly payments that increase gradually throughout the duration of your payment timeline.

Income contingent repayment plans

For those who have a stable income, an income contingent repayment plan is probably the best and most personal type of debt management there is. With this plan, you work together with your lender to negotiate a payment plan based on your monthly income. That way, you can ensure that you have enough income to pay off your debt and you will have left over money to spend on other expenses or for saving.

The importance of counselling

Getting debt management counselling is a crucial step to successfully dealing with your debt. Speak with a financial adviser or a qualified debt counsellor to get advice on which type of debt management plan would be best for you. Your counsellor may even suggest that you get a debt consolidation plan, a debt settlement, or you may be advised to file for bankruptcy. Make sure that you also put your own thought and consideration into choosing the right debt management plan, because you will be the one who has to go through with it, not your counselor.