Cobalt Advisors and Credit 9 have joined Saxton Associates and Hornet Partners in flooding the market with debt consolidation and personal loan offers in the mail. The problem is that the terms and conditions are at the very least confusing, and possibly even suspect. The interest rates are so low that you would have to have near-perfect credit to be approved for one of their offers. Best 2019 Reviews, the personal finance review site, has been following Carina Advisors (also known as Corey Advisors, Pennon Partners, Jayhawk Advisors, Clay Advisors, Colony Associates, and Pine Advisors, etc.).
Debt can follow you for most of your life if you’re not careful. Therefore, it’s in your best interest to pay off all of your debts as soon as you can. However, if you’re unable to do that, there are some ways that you can get of debt without paying. Here’s how you can do that.
What Are Some of the Ways to Get Out of Debt Without Paying?
There are different ways to get out of debt without paying, and these depend on the type of debt you have. These debts include credit card debt and student loan debt. Here’s one way you can get rid of credit card debt without paying the full debt amount.
Consider Debt Settlement for Credit Card Debt
Settling your debt is a negotiation strategy that’s used to satisfy your credit account. This is possible by paying a fraction of the outstanding debt of your account to your current lender. You will still have to pay some money, but you may not have to pay all of your outstanding credit card debt. Also, you should only consider debt settlement if your accounts are in collections or are charged off. In addition to that, you must have cash on-hand to be able to settle your credit card debt. Therefore, this strategy is one of the best ways to consolidate debt.
Options to Get Out of Debt Without Paying Student Loans
You have a number of different options for getting rid of student loan debt. However, these options will depend on where you work. Here are some ways to get rid of student loan debt.
Public Service Loan Forgiveness
This method is available to people who are employees at the local, state, and federal levels. This is also applicable to people who work at nonprofit organizations. You must make a total of 120 qualifying payments while you work full time in the public sector. After that, you may qualify to have your Direct Loans forgiven.
Income-Driven Repayment Plans
Another way to get out of debt without paying is to use an income-driven repayment plan. This plan revises your monthly payment in which you must pay only 10% to 20% of your monthly income for the following 20 to 25 years. The exact repayment percentage and term will depend on your income, location, job. Once you’ve paid the monthly amounts for the agreed-upon term, the rest of your student loan debt will be forgiven.
Perkins Loan Discharge
You can qualify for the Perkins Loan discharge or cancellation if you’re employed as a teacher, law enforcement officer, or a firefighter. There are also some other people who can be eligible for this loan discharge. Loan discharge is the process in which the outstanding balance of your debt is forgiven.
Teacher Loan Forgiveness
This method to get out of debt without paying is restricted to teachers who work at a low-income school for 5 years straight. In addition to that, employees of an educational service agency can also qualify for this loan forgiveness method. In this case, you may qualify for a reduction of around $17,500 on your Stafford Loans or Direct Loans.
Consider Filing for Bankruptcy
Filing for bankruptcy is one way to get out of debt without paying, but it will have longstanding effects on your financial health. Therefore, you should only consider this option if you have no alternatives.
According to a Chapter 7 bankruptcy filing, most of your debts will be discharged after a few months. However, you will have to sell off some of your existing assets to pay off those loans. This can include your house/apartment and other personal property, such as cars. What’s more, student loans and child support won’t be discharged through this process.
If you file for bankruptcy according to Chapter 13, you’ll have to follow a repayment plan that’s ordered by the court. This plan may discharge your remaining debts after roughly 5 years or more. With that said, you’ll end up paying off debt for an even longer period of time than before.
While this process is a possible way to get out of debt without paying, you’ll still lose some of your assets, and you’ll hurt your credit score. Bankruptcy can be present on your credit report for 10 years. This means that you won’t be able to qualify for better deals when applying for loans, and you may also find it difficult to find good homes on rent.
Why Is It a Bad Idea to Avoid Paying Off Debt?
You should never consider defaulting in your debt payments. This is because your lender can sue you for your unpaid bills. And you’re most likely to lose that case as well. In addition to that, each missed payment will adversely affect your credit score. This will make it difficult to secure loans and additional credit accounts. What’s more, if you do qualify for a loan, you’ll have to pay much higher interest rates than you would with a good credit score.
What Can You Do as an Alternative to Bankruptcy?
Instead of filing for bankruptcy to get out of debt without paying, you can consider negotiating with your lenders and creditors to reduce your monthly payment or interest rate. This may come in the form of temporary relief through deferment.
In addition to that, you can consider supplementing your income. You can consider looking for a secondary job or sell off some valuable items you don’t need. It’s best to pay off your debts while you still can.
Last Words on How to Get Out of Debt Without Paying
While there are still ways to discharge your loans, they still involve paying some amount. So, it’s best to be smart when picking loans and pay them off as soon as possible. This way, you won’t have to worry about how you can get out of debt without paying, and your financial health will be a lot better as well.