In 2019, consumer debt in the U.S. was around $14 trillion. Since the beginning of 2020, in addition to trying to eliminate any exposure to COVID-19, consumers are also dealing with debt that is growing and increasing incrementally daily. There are various reasons people are acquiring more debt in day-to-day living.
The reasons for the increase in consumer debt ranges from having to use their credit cards more to having to obtain short-term and long-term loans to help pay their weekly and monthly bills. When you deal with debt on an ongoing basis you find out just how fast it can become an almost unmanageable amount. There are some positive ways forward, including debt solutions you may have never imagined you would need.
Read on and learn more in the informational guide below about some of the best ways to deal with debt during COVID-19. You no longer have to experience debt you accrue today that has no debt resolution or answers. When you deal with debt, there are some viable and relevant financial solutions waiting for you to discover.
Deal With Debt
When you are seeking effective and efficient methods for dealing with debt, it’s important to remember that debt consolidation is a financial option that most people know is there, but many are unaware of how beneficial it can be. There are four debt consolidation options that are used the most.
They include, but aren’t limited to:
- Refinancing your home or personal property, mortgage or personal property
- Obtaining a new line of credit
- Debt resolution including an extension of credit
- You can take out a personal loan
Debt consolidation can usually be found through financial companies dedicated to helping you reorganize your finances. They also help you find a way to handle your personal finance needs through debt consolidation methods.
First Step of Paying Off Debt During The Pandemic
To find your way through the financial maze that opens up some of the debt options listed above, there is a best way forward process. The process begins when you realize you don’t have enough savings or money to pay your bills. That’s when you need to determine which ones are most important and those which are usually your secured debts.
Any secured debt you have is backed by collateral. That means if you can’t pay those bills, the creditor has the option to come in and take the asset you used to secure the funding. Most of the time secured debt collateral ranges from your automobile to your home.
A satisfactory debt consolidation process will begin by dealing with your secured debt because no matter what asset you used for the collateral you need it to continue to work, live, or have any sense of financial health. That’s almost impossible to do if a creditor comes in and takes the car you need to work or the home you need to live.
Loans During COVID-19
It may be comforting for you to know or alarm you to find out that the average American is on average $38,000 in personal debt. When that person decides they want help in slashing their debt, they often reach out to a debt solution company that will find the consolidation method that fits their needs best. The debt resolution company will determine what your monthly debt and payments are as well as ascertain what are your assets and income on a monthly basis.
If the debt analysis determines your debt is larger than your salary income and assets, then you need a positive way forward in slashing your debt. The debt ratio rule of thumb is you should never exceed more than 20-35% of your income on debt after taxes. There is such a thing as asset building debt.
This is the type of debt you need to keep if possible as it helps you gain positive traction in your debt results. They are also debts that aren’t labeled as consumer debt.
Debt Resolutions During The COVID-19 Pandemic
That leaves some viable and relevant debt resolutions that you can apply during the COVID-19 pandemic. You can definitely consider obtaining a loan that helps you consolidate your debt. When you consolidate your debt, you’re giving yourself just one consumer debt payment each month to pay.
That one payment is applied across the board to every consumer debt you previously had by putting it all under one umbrella. You can also consider transferring your debt to a credit card that has zero interest. The zero interest may only be for a certain length of time but it’s usually enough to give you a head start in decreasing your debt amount to a more manageable level.
You can offer your consumer creditors a debt solution. The debt resolution process results in lowering the credit amount you owe. You are no longer dealing with the credit collection companies as the debt arrangement company is paying the debt amount agreed upon.
All you have to do is write a check to the debt solution company monthly. The last debt solution is to file for bankruptcy. This is not a popular option but there are times it is the best financial decision you can make.
Debt Solutions For You
Almost everyone thinks they’ll never need debt solutions for their consumer credit debt. That’s why sometimes consumers are surprised when they determine their debt is out of control, and they have to find a debt option tailored to their needs. Almost every debt solution offers you a new way forward to restore your debt to the level where you want it to be while increasing your financial security.
Reach out to Debthunch when you’re ready to take your first step on a path that allows you to deal with debt in a positive manner. Debthunch has the expertise, the debt solutions, and the knowledge you need and want for your debt issues. Debthunch can target what specific options may work for you the best.
Financial freedom is one step or one click away. When you’re ready to find the debt consolidation solution that works best for you. You know you’re facing bills you cannot pay off due to the impact COVID-19 had on your life. Debthunch will help find a way for you to find financial security once again.