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If you’re getting threatening phone calls from debt collectors or credit card companies, wouldn’t you love to be able to stop them? Wouldn’t it feel great to get rid of that queasy feeling in your stomach when you think about your debts? For that matter, how would it feel if you could open your mail knowing that it won’t contain yet another nasty letter from one of your creditors?
Do you know why you’re struggling with debt?
Have you lost your job or become underemployed so you’ve had to use your credit cards just to get by? Did you have an unexpected emergency and didn’t have enough in savings to pay cash so you had to go into debt? Or maybe you’ve just done a bad job of managing your credit cards. It’s just really important to know why you got in trouble with debt so that once you work your way out, you won’t get back in.
A debt consolidation loan
You could probably get a debt consolidation loan, especially if you own your own home and have equity in it. You will probably have to have lived in that house for at least 10 years to have some equity because for those first years, you’re paying mostly your interest costs and not reducing your balance. If you don’t own your own home or if you have been in it for just a few years, you would have to get an unsecured loan, which could come with a very high interest rate. Plus, it could take you seven or even 10 years to pay it off.
Borrowing from yourself
If you could borrow from yourself, this would be a much better solution than a debt consolidation loan. You might not have to pay any interest at all and even if you did, you would be paying yourself.
The first way to borrow from yourself is by using your retirement account. If you have a 401(k), you should be able to borrow from it and then pay yourself back. As a rule, you should be able to borrow the lesser of $50,000 or one half of your retirement plan’s balance. You will probably have to pay the loan back in five years or less and you will have to pay interest but just think. You’re paying interest to yourself.
A short-term alternative
You could also borrow money from your IRA. However in this case, you must pay the money back within 60 days. If not, it will be treated as a standard distribution and you will have to pay taxes on it. And if you’re less than 59 years old, you will have to pay an additional 10% penalty tax.
Whole life insurance.
If you have a whole life insurance policy, that is one that builds cash value, you should be able to borrow from it. In most cases you can take as much time as you want to pay back the money or not even pay it back at all. Of course, your policy would have to have enough cash value to pay off your debts.
Debt settlement
If you don’t have a 401(k) or enough cash value in your life policy to pay off your debts, you could let us do debt settlement for you. Our debt counselors could negotiate with your lenders to have both your balances and interest rates reduced to save you thousands of dollars. They will create a payment plan that you can afford and that will get you out of debt in 24 to 48 months. However, for us to help you must have at least $7,500 in unsecured debts. If so, call our toll-free number today so that we can explain debt settlement and how it might help you achieve debt relief.
