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Where making a committed decision of paying out your debt is tough, coming up with the required money to pay it off is even tougher. But what if you find out you can get out of debt without really paying it! Technically, this IS possible depending on a number of factors.
How to Escape Student Loan Debt
There are a few different ways of getting rid of student loan debts based on your loan plan, job status, and the school you attended.
Public Service Loan Forgiveness:
This service is open to those who are working in the public sector such as the employees at the state and local levels. This is also available if one works for a non-profit organization. While you are working full time, if you make 120 qualifying payments, the rest of your direct loan can be spared.
Your monthly payment will be modified to 10 to 20 percent of your income for the next 20 or 25 years depending on the plan. After that, the remaining loan will be forgiven.
Closed School discharge
If your school closes while you were studying or just after you withdrew, you can have your federal student loans freed.
Teacher loan Exemption
This service is applicable for those teachers who have worked continuously for five years at a low-income elementary school. You can receive an exemption of up to $17,500 of your Stafford or Direct loans.
Perkins Loan Cancellation or Discharge
Teachers, law enforcement officers, firefighters, and many other officials can receive a cancellation or discharge on their Perkins loan. The cancellation service is available for a term of 5 years, where a discharge can be granted in cases of bankruptcy, disability or death. For most of the cases, timely payments need to be made. Still, not everyone qualifies or receives an exemption.
How to Escape Credit Card Debt?
If you have more credit card debt than you can pay, you can definitely escape it for a while. But before that you must consider the consequences: If you stop paying off your credit card bills, it will start to build up. Considering the popularity of this kind of debt, it becomes even more important to outline proper strategies to pay it back. Stats suggest that the average credit card balance per person in the US was $6,914 in 2019!
There is a limitation up to which you can dodge the payments. Post that, the creditors will file a case against you, which is usually 3 to 10 years in most states.
Skipping the payments is an option, but you may suffer for them later. If a case is filed, then there’s a high probability, you won’t win the case. You have to then consider the option of debt settlement, in which you can settle your outstanding debt with your creditor for a lesser amount than what is due. Though you may not have to pay the entire debt, ultimately, you need to pay off some part of it.
How to Get Rid of Debt Via Bankruptcy?
Bankruptcy is the ultimate and final option and should only be considered when there is no other way out. When you are filed for bankruptcy, you would still have to clear off some of your outstanding debt. This means that you may lose some of your personal property to pay off the debt.
You can get a court-ordered repayment plan and any remaining debt after a certain time might get discharged. Through this means you will have to spend a long time clearing your debts and you will also get a filing on your credit report.
The bankruptcy filing can stay on your credit report for up to 10 years, depending on the type. It will certainly have an adverse effect on your financial health which is why you must weigh your options wisely.
Not Paying Off- Not A Good Idea
Your credit report is crucial for your financial status, and filings or missed payment records can make it difficult for you to take a loan in the future. You can get sued for unpaid bills and in many states, you can also lose your salary if you are neglecting the debts.
Substitutes for Bankruptcy
Considering to pay back your debts is always better than bankruptcy. You can ask for a raise at work or find a higher paying job. Try and see if your creditors can reduce the interest rate and assist you in any other way. You can also apply for a debt consolidation loan in which you can put all your debts in one place and pay less interest all-together. Seek help from a third party debt collector like cedar financial, and ask if they have some alternative ways by which you can get some relaxation over your unpaid debt. Contact Cedar Financial via Facebook, LinkedIn or from any other platform and you will find they are always ready to hear your queries and concerns.
Whatever means you adopt, the bottom line is, you need to pay the debts, sooner or later.
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