When it comes to choosing New Year’s resolutions, millions of Americans will resolve to get out of debt in 2020, and for good reason. In 2019, Americans under the age of 35 were carrying an average of over $67,000 of personal debt. Dealing with that kind of debt, much of it in the form of high-interest credit cards, can be daunting. However, if you resolve to make 2020 the year you pay off all your outstanding debts, you can do it! Here are five ways to get rid of your debt next year.
1. Get a Side Hustle
One way to get rid of your debt in the upcoming year is to earn more money to pay down debt faster. If you have the time available, consider getting a side hustle or a part-time job, and devote the additional funds you earn to debt repayment. Thanks to technology, it’s easier than ever to find a side hustle to fit your busy schedule. Many people opt to work part time for driving services such as Uber or Lyft. People with writing, editing, graphic design, or other skills can often find billable work using online freelancing services such as Upwork. Many more people forego the high-tech scene and simply get another part-time job, or put in more hours at their primary place of work. How ever you do it, earning more money will help you accelerate your debt repayment next year.
2. Consolidate Your Debts
Another option to consider for getting rid of your debt next year is to consolidate it all. A debt consolidation loan will enable you to bundle all your outstanding debts into a new loan. Consolidating your debts into a single loan will make it easier to manage debt repayment, and you’ll likely enjoy a lower interest rate than you’re currently paying on your credit cards and other debts. Additionally, if you use your home to secure the debt consolidation loan, the interest you pay on the loan may be deductible on your federal income taxes. However, you’ll need to have the means to repay the loan and a good enough credit rating to pursue this debt repayment option.
3. Get Help
When it comes to paying off high levels of personal debt, you should never go it alone. Instead, seek out the support of trusted financial professionals to guide you through the process. For example, certified credit counselors can analyze your current situation, assess your debt, and help you determine the best strategy to repay it. In many cases, nonprofit organizations provide credit counseling services free or for very low fees, so seek one out nearby as soon as you can. They will often work closely with you to develop your debt repayment plan and can help you develop good habits to avoid high levels of debt in the future.
4. Use Debt Settlement
If you need professional assistance dealing with high levels of debt, consider hiring a debt settlement company. Debt settlement services, such as those provided by the team at National Debt Relief, are a great option for people who feel they’ll never be able to repay their creditors due to the high balances and interest rates on their outstanding debts. Debt settlement companies will contact credit card companies and lenders on your behalf and negotiate terms for repaying your outstanding debts. In many cases, debt settlement companies can convince creditors to waive late payment and other penalties and reduce the total amount of debt you have to repay. If you’d like to learn more about this highly effective option for addressing personal debt, contact National Debt Relief as soon as you have the opportunity.
5. Consider Bankruptcy
If you’ve analyzed your financial situation, and you believe that none of the methods suggested here will help get rid of your debt, then you can consider bankruptcy. Bankruptcy should be considered a last resort for dealing with debt. However, if your monthly debt payments leave you struggling to pay other bills, or you’re suffering from long-term unemployment and cannot pay any of your bills, it may be wise to consider bankruptcy as an option. Several different types of bankruptcy apply to individuals; some relieve you of all debt entirely, while others restructure your debt to make repayment more manageable. All forms of bankruptcy will have an impact on your credit rating, so make sure you talk to a bankruptcy professional to consider your options.
You can make 2020 the year you pay off all your debts and start on the road to financial security. Once you assess your personal financial situation, you’ll be able to consider which of the options discussed here might be the best fit for you. So, if you plan to get rid of your debt this new year, get started on the road to being debt free as soon as you can!