Many people are struggling with debt, and in many of those cases, it is not because they managed their money badly. This can be the result of a medical emergency, a job loss or a divorce, adding up pretty quickly. Even when people have an emergency fund, it can quickly be wiped out in some of these situations. However, it is also possible to claw your way back out of debt with the tips below.

Know Your Rights

Falling into this trap can feel overwhelming, especially if you are behind on payments and dealing with calls and letters from creditors. However, it is important to know your rights. You may want to do research or even have a consultation with an attorney to make sure you understand these rights. For example, there are restrictions on when and how creditors can contact you. You can also request documentation from creditors to show that you actually owe them the money they say you do.

Talk to Your Creditors

Depending on who your creditors are and how much you owe, you might be able to work out a payment plan by talking to your creditors. For example, sometimes hospitals will reduce payments for people who do not have health insurance and are struggling to pay their bills. Talking to your creditors doesn’t always work, but it is usually worth a try.

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Refinance Your Student Loans

Student loans are a major source of debt for many people, and in some cases, the interest rates are particularly crippling. Refinancing a student loan with a lower interest rate can cut your monthly payments and free up money to either pay toward the original student loan debt or toward other debts. Be sure to look around for the best offer among lenders. While you can generally get better offers the better your credit rating is, you might also be able to get a good rate with a cosigner.

Be Wary of Offers

One reason you need to do your research is that you should be careful about some of the offers you may get. For example, in some cases, there may be tax implications for some types of forgiveness. Some creditors may suggest you cash in your retirement account to pay off a debt. This is an option, but before you take it, you should be aware that if you declared bankruptcy, your retirement savings would probably be protected.

Choose Your Method

If you have reviewed your budget and found places where you can tighten your belt to start paying off your debt, the next step is to make a plan. Experts generally suggest choosing one of two approaches. The financially logical one is to choose the balance with the highest interest rate and focus on paying that off first and just making minimum payments on your other debts. However, this is not necessarily psychologically satisfying. Some people may have more success by tackling the smallest debt first because it gives them a sense of accomplishment when it is paid off quickly.