According to the data provided by Automated Access to Court Electronic Records, a bankruptcy data management company in Oklahoma City, 8,113 businesses filed for bankruptcy protection in January, 2010. This is a 57% increase from last year's statistics recorded in the same month. Individuals filing for debt relief have also increased since the last year. Although the debt is a global problem, reports show that an average household in the US is burdened with a minimum $ 20,000 debt, apart from the mortgage payments. Avoiding a similar fate is essential for one's peace of mind and reputation.
Debt Relief Techniques
The following are some ways in which individuals and business homes can attain debt relief without having to file for bankruptcy:
Cut unnecessary costs : Identify and categorize the parts of the household or business which lead to debt situation and create a new budget accordingly. Expenses are high and they will increase each year. Therefore, consider concentrates efforts on reducing office space and investments in costly phone systems on the business front. Avoiding excess electricity usage, maintaining not more than two vehicles can help in the home front.
Pay more than minimum monthly payments : This is important to attain fast debt relief. Paying the bare minimum amount is not enough. Only by paying over and above the least amount, will one ensure one's ways out of the trap.
Consolidate loans : Some are in the habit of taking larger loans to clear off the smaller debts so that one is left with one large debt amount. Debt consolidation is ideal for business houses. It reduces monthly payments since it merges small-term loans to one long-term loan. For a householder, consolidation may or may not prove useful since it amounts to almost the same thing. The consolidation option must be taken when there are too many loans to be taken care of. A householder must also keep emergency situations in mind and create an emergency savings account. Avoiding the use of credit cards will also help.
Businesses must prioritize on personal debt payments : Tackling the highest interest rate first is crucial. However, if there are chances of creditors coming after one's personal assets, that particular debt must be settled on a priority basis.
Seek counsel : Negotiating with the creditors can prove to be quite a harrowing experience. Instead take the aid of a reputed credit counseling organization.